'Dash for Trash' Fuels Big Bounce for Money-Losing Growth Stocks
Comment of the Day

March 18 2022

Commentary by Eoin Treacy

'Dash for Trash' Fuels Big Bounce for Money-Losing Growth Stocks

This article from Bloomberg may be of interest to subscribers. Here is a section:

No earnings? No problem.

That was the message from investors this week who stormed back into the shares of faster-growing companies with little in the way of profits after months of chasing value stocks. While major benchmarks rallied, a Goldman Sachs index of unprofitable tech companies was up 18% over the five sessions. That compares with a gain of 6.2% for the S&P 500 and 8.4% for the Nasdaq 100.

“A straightforward dash for trash” is how Bespoke Investment Group described it when explaining why smaller companies with the lowest return on assets and no dividends were among this week’s biggest gainers.

Eoin Treacy's view

The Ark Innovation ETF bounced this week in an emphatic manner from the region of the of the pre pandemic peak. In doing so it fully unwound the big bull market and the upside weekly key reversal suggests investors are willing to bargain hunt.

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