Investors cling to past performance because it offers hope


And what’s life without hope?

But unless the future is exactly the same as the past, it’s surely false hope.

Even more so when the current environment is the complete opposite of the past.

Like now!

For the March quarter, Netflix’s revenue growth accelerated from the prior 2 quarters to 24%

EPS was the highest in history and they generated free cash flow.

But the stock is down 8%.

Pinterest reported revenue growth of 78% last night.

A few cents of EPS & some cash flow.

But the stock is down 10%.

Even the mighty & much loved Microsoft (without a single Sell recommendation) grew revenue 19% (16% in constant currency) & EPS 39%.

But on 36 times earnings and a $2trillion market cap, the growth junkies needed more, and the stock is down after hours.

What’s the problem?

Well remember the favourite phrase of tech last year, “the pandemic has pulled forward our growth…”

Well now that growth is in base.

From which further growth is harder.

At a time when everyone owns growth.

Meanwhile, Deutsche Bank, with 1 Buy & 13 Sells, just raised their outlook after the best quarter in 7 years and the stock is up 7%.

So don’t dwell on the past, just think about your exposure to Active Value now.