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The hottest stocks are quietly getting killed off

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By Michael O’Connor

Markets are constantly changing and adapting, but a timeless law is that money will always chase performance, leaving us a step behind.

Over the last six months, four stocks - Microsoft, Apple, Nvidia and Google - have generated almost 70% of the S&P 500's return.

Meanwhile, many of the retail investing favourites continue their precipitous decline.

In what has now been dubbed the Tarantino Market, the hottest stocks from last year are quietly getting killed in the basement while everything continues as normal in the front room.

Docusign, Square, and Twilio have all lost between 20% and 35% YTD
Teledoc, Zoom, Beyond Meat and Zillow have lost roughly 50% YTD
StoneCo, Pelaton and Lemonade are down between 65% and 80% YTD

The S&P 500 Index is up almost 25% this year, relentlessly hitting all-time highs in December while growth names crumble in the background.

A reminder that stock picking is hard, and nothing lasts forever.

Statistically impossible

For tech growth stocks that had produced record growth numbers in recent times, the endless upward trajectory was unsustainable, and those who assumed a perpetual state of hyper-growth are now beginning to sober up. It's a lesson learned.

It's easy to get drawn in by the enticing narrative that these mammoth growth rates create, but these growth rates will never persist; it's a statistical impossibility. 100% revenue growth is an impressive but manageable task if your total revenue is 100k. Doubling your revenue from $500 million to $1 billion is a much more arduous endeavour.

Don't get too attached to the hyper-growth story. The rate of growth is guaranteed to slow down over time, and much of this future growth is already baked into the price.

Ensure you have other areas of conviction that you can assign to the company. Every company can have a hyper-growth story at some time or another. You need to have enough conviction to stay the course as the narrative changes and companies encounter inevitable growing pains.

You will never expose yourself to the exponential returns these companies offer in the long run if your only metric is price. Focus on finding companies you believe in with strong moats, inspirational founders, and innovative IP - companies that correspond with your vision of the future. Focusing on understanding what you're invested in and why you are invested in it makes it a lot easier to ignore the guaranteed price fluctuations over time.

With that said, markets, companies and people change, so make sure to objectively assess your positions at regular intervals to ensure your original investment thesis still applies.

Momentum is a powerful force in today's market and making investments simply because a stock has gone up in price and you are looking to get in on the action can be a rewarding strategy in the short run.

Still, without understanding what you own and why you own it, you are in for a painstaking investment experience laced with perpetual uncertainty.

Make a plan

The recent losses across the popular retail investor names has highlighted the need to stay focused on the core principles of long-term investing.

· Don't get caught up on short-term moves. Focus on your long-term time horizon
· Make sure you have adequate diversification
· Be patient: There will be periods where markets fall over 10%, that is a guarantee
· Stay committed to the companies you believe in; conviction is everything
· Be an opportunist: Use market corrections to build out positions in your favourite stocks.

As always, you can find more investing information at theislandinvestor.com.

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Killarney centre stage for Pride Festival

The award-winning Kingdom Pride in Kerry festival is back next week and Killarney will take centre stage. Kingdom Pride will be celebrated in towns all across the county from July […]

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The award-winning Kingdom Pride in Kerry festival is back next week and Killarney will take centre stage.

Kingdom Pride will be celebrated in towns all across the county from July 17 to 21.

The organisation’s flagship Party in the Park event will be held again in Killarney House and Gardens, following the Pride march in the town centre on July 20.

This year, in solidarity with the people of Palestine, Kingdom Pride in Kerry is inviting the people of Kerry to come to show their unity by bringing Palestinian flags and kites to the march, and to the Party in the Park.

“Pride is a protest for human rights all over the world. Here in the Kingdom, we have been so lucky to receive tremendous community support from our allies and supporters, and we see the struggle for liberation of all peoples as a united cause,” said Daniel Quirke, chairperson of the organising committee.

“Our events have always welcomed everyone, regardless of gender, orientation, religion, or nationality. We truly believe that together we can create positive change through caring for and loving one another. This year is no exception, and we look forward to helping to highlight the Palestinian cause, and to bringing people together to keep generating positive change for all people.”

Events will take place in Cahersiveen, Listowel, Killorglin, Tralee and Dingle, and include an Irish comedy night with Áine Gallagher, an Irish-language movie screening, yoga, sea swimming, poetry and storytelling, bowling, pitch and putt, a lively drag night at the INEC, and plenty more for people of all ages.

“We do our best to keep tickets as low-cost as possible, and we have lots of events that are totally free to attend. It is important to us that people can share Pride with us, regardless of income. Especially with the rise of the cost of living putting a strain on people’s pockets.” added the chairperson.

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A weekend of Live Music, Fun and Entertainment, at FleskFest 2024

The organisers of the annual FleskFest have “a tremendous line-up, with a weekend full of entertainment to suit all” for the July 18 to 20 event. “It promises to be […]

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The organisers of the annual FleskFest have “a tremendous line-up, with a weekend full of entertainment to suit all” for the July 18 to 20 event.

“It promises to be the festival weekend of the summer, an event you don’t want to miss out on. Last year’s Festival was a fantastic memorable experience for our community, a time to get together and celebrate,” said festival PRO Seán Daly.

Organised by Glenflesk GAA, FleskFest 24 will take place at the Barraduff Community Field next week.
There will be a fully licensed bar in the Fest Marquee, some amazing live music on The Big Stage, food trucks and much more.
Glenflesk GAA club’s biggest fundraiser of the year includes a new-for-2024 Texas Holdem Poker Tournament on Thursday night.
Weekend highlights include old-time waltzing, jiving and polka sets with Paudie McAuliffe and Paudie Coffey Band on Friday,
On Saturday, the new Well Flesk event will take place.
“A morning of self-care and wellness at Flesk Fest featuring masterclasses in yoga, pilates, mindfulness, spinning, fitness sessions, workouts, firewood sauna and ice pods with a range of experienced and qualified instructors,” added Daly.
Leading local musician Johnny Courtney and Friends, Sam and Ina, The O’Donoghue Sisters, Reigning All Ireland Champions Glenflesk Ballad Group, and The Border Boys will take to the Big Stage over the weekend.
Sunday is Family Fun Day with children’s entertainment and disco and the All-Ireland Hurling Final Live on the Big screen followed by music with Thingamajig.
The festival will finish with a Sunday evening session with the Meadhbh Walsh Band.

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