The old adage is the bull climbs the stairs and the bear jumps out the window. Certain sectors of the market can slowly rise for years and investors grow numb to the fact their price to earnings ratios have moved into the stratosphere. This happened with social media stocks, the new high flying technology darlings. After a very rough week of earnings releases it appears investors came to their sense very quickly and painfully.
Can these stocks collect themselves and move further upward into even more absurd valuations? Of course, I do not doubt anything in the current mania. Eventually all assets come back to reality, and the further they move up into la la land, the bigger the plunge will be back to earth.
h/t Adam Taggart