Tech Stocks Won’t Bounce Back Quickly This Time
Investors weren’t just being skittish. They were reacting to the new reality.
Like so many things, the past month’s calamity in tech stocks may be best understood in terms of Caddyshack. In a scene midway through the movie, the country club pool fills up with people splashing around and having a great time. That is, until a girl tosses a Baby Ruth candy bar into the water and panic erupts. The stampeding crowd mistakes the chocolate treat for, well, something else.
For years, investors have been crowding into the tech pool, steadily raising the water levels at Facebook, Apple, Amazon.com, Netflix, and Google. And the companies’ Chinese counterparts. And the makers of the computer chips and other hardware that power the internet economy. Tech companies dominate lists of top holdings among hedge funds and retirement funds alike. NYSE FANG+ Index futures contracts even allow heavy hitters to bet exclusively on the continued good fortunes of Silicon Valley’s biggest.