It has been a rough several months for U.S. stocks. While broad market averages are down, they obscure the extent of the wreckage. Not even the technology-heavy Nasdaq Composite Index, which has tumbled more than the better-known S&P 500 Index and Dow Jones Industrial Average, tells the whole story.
What has happened is that glamour stocks — shares of highly valued, rapidly growing companies with little or no profits — have taken a beating: not a correction, not a bear market selloff but declines of a magnitude that typically accompany financial meltdowns and other crises. Many of the hardest-hit stocks have been those of companies trumpeted in the latest Wall Street lingo as “disruptive innovators” poised to achieve “exponential growth,” such as telemedicine company Teladoc Health Inc., streaming platform Roku Inc. and video-conferencing provider Zoom Video Communications Inc. Rarely mentioned is the data showing that glamour stocks are most often a losing bet.