PROMOTION Market madness Be selective, advises Paul Gavaghan of Raymond James The problem is, even ifidentifying overvalued stocks or markets, it does /hilst there are still pockets them. Another example- Nikola, a company with no revenues or real assets aspiring to make electric vehicles, saw its vablue reach $30bn VV across the globe, the of great opportunity not mean that the bubble cannot past few weeks have also seen crazy price rises of some stocks as investors have rushed to join the herds buying certain technology stocks indiscriminately. Given the backdrop of a Western World with low interest rates and a pandemie that is highly disrupting many sectors, the relatively less affected technology sector is an attractive place to park money. It seems many investors taken this view but have forgotten the importance of valuations. The herd buying has pushed prices upwhich then reaffirms investors reasoning so they buy more again and so on which spirals share prices upwards. There have been some carry on growing as was the case for tech stocks in 1998-1999. Valuations (more than Ford) when it had listed for just $300mn in March largely because of it also taking its name go out of the window until the bubble bursts or deflates but quickly become relevant at that point as investors from inventor Nikola Tesla like its older rival. look at intrinsie value rather than buying at any cost. It is not until then will the euphoric investors start to consider if the negative cashflow business models of the likes of Tesla Let's look at Tesla further. Undeniably a very innovative company but quite clearly its outlook now is not as rosy as the start of the year. Its expensive products will suffer demand as a result of the global downturn, lockdown has caused production and supply problems, governments will have less available cash to and Netflix are sustainable. There are large areas of global markets though that are offering very good value including some technology stocks. We are finding great opportunities, most notably in Asia and Australasia. More than ever we believe it is immensely important to be highly selective with stock picking and make sure subsidise electric vehicles and the price of oll has decreased signifikantly, making electric vehicles relatively not as attractive. particularly striking examples of craziness. Chinese property company 'Fangdd Network went up over 12x ina day before crashing back down, purely because said that the share price is too high, investors so desperate to buy tech stocks mistook it for the acronym Despite all these headwinds, ast write, the stock is up 130% just this year. Even Elon Musk himself has that everything within portfolos offers good long term value and resilence. yet it has carried on increasing even since then. Risk Warning: With investing your capital is at risk. Opinions constitute our judgement as of this date and are subject to change without warning. + FAANG which stands for Facebook, There is a lot of evidence to Amazon, Apple, Netflix, Google and thought it was a vehicle to invest in suggest that certain areas of the market are in bubble territory. 8 Berry Lane, Longridge, Preston, Lancs, PR3 3JA 01772 780300 www.ribblevalley.raymondjames.uk.com RAYMOND JAMES Ribble Valley PROMOTION Market madness Be selective, advises Paul Gavaghan of Raymond James The problem is, even ifidentifying overvalued stocks or markets, it does /hilst there are still pockets them. Another example- Nikola, a company with no revenues or real assets aspiring to make electric vehicles, saw its vablue reach $30bn VV across the globe, the of great opportunity not mean that the bubble cannot past few weeks have also seen crazy price rises of some stocks as investors have rushed to join the herds buying certain technology stocks indiscriminately. Given the backdrop of a Western World with low interest rates and a pandemie that is highly disrupting many sectors, the relatively less affected technology sector is an attractive place to park money. It seems many investors taken this view but have forgotten the importance of valuations. The herd buying has pushed prices upwhich then reaffirms investors reasoning so they buy more again and so on which spirals share prices upwards. There have been some carry on growing as was the case for tech stocks in 1998-1999. Valuations (more than Ford) when it had listed for just $300mn in March largely because of it also taking its name go out of the window until the bubble bursts or deflates but quickly become relevant at that point as investors from inventor Nikola Tesla like its older rival. look at intrinsie value rather than buying at any cost. It is not until then will the euphoric investors start to consider if the negative cashflow business models of the likes of Tesla Let's look at Tesla further. Undeniably a very innovative company but quite clearly its outlook now is not as rosy as the start of the year. Its expensive products will suffer demand as a result of the global downturn, lockdown has caused production and supply problems, governments will have less available cash to and Netflix are sustainable. There are large areas of global markets though that are offering very good value including some technology stocks. We are finding great opportunities, most notably in Asia and Australasia. More than ever we believe it is immensely important to be highly selective with stock picking and make sure subsidise electric vehicles and the price of oll has decreased signifikantly, making electric vehicles relatively not as attractive. particularly striking examples of craziness. Chinese property company 'Fangdd Network went up over 12x ina day before crashing back down, purely because said that the share price is too high, investors so desperate to buy tech stocks mistook it for the acronym Despite all these headwinds, ast write, the stock is up 130% just this year. Even Elon Musk himself has that everything within portfolos offers good long term value and resilence. yet it has carried on increasing even since then. Risk Warning: With investing your capital is at risk. Opinions constitute our judgement as of this date and are subject to change without warning. + FAANG which stands for Facebook, There is a lot of evidence to Amazon, Apple, Netflix, Google and thought it was a vehicle to invest in suggest that certain areas of the market are in bubble territory. 8 Berry Lane, Longridge, Preston, Lancs, PR3 3JA 01772 780300 www.ribblevalley.raymondjames.uk.com RAYMOND JAMES Ribble Valley