Not for the first time in my career, the past few weeks have reinforced the wise old owl Warren Buffett’s advice that the time to be buying is when others are panicking.
The tech-heavy BizNews portfolios, focused as they are on shares in exponentially growing businesses, rebounded powerfully in the past four trading sessions. But for those who replicated our model portfolios, it’s too early to celebrate. There’s sure to be more deep breaths required before the extreme turbulence is over.
Last night SA time, shares in new age company PayPal plunged by a quarter – a $50bn valuation wipeout – after its CFO told analysts the company was adopting “a more cautious outlook” with revenue projected to grow by 15% to 17% in the year ahead – rather than the 18% projected a few months ago.
Those couple of percentage points was all it took to get Mr Market into a deep depression. Imagine what would have happened had the CFO suggested profits (or worse, revenues) would actually fall?
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