Albert Edwards on the great bursting bubble of our time.
Investment performance is often shaped by one big decision. Get that one thing right and it results in significant outperformance relative to your peers and benchmarks. During the 2007-08 Global Financial Crisis, underweighting banks was the one bold bet that resulted in significant outperformance for equity managers. Similarly, at the start of this year we thought the one key risk to avoid was a US technology bubble, especially in the FAANG stocks. As this recession deepens,the US tech meltdown could get much worse.
Last week was torrid for big tech as Facebook and Amazon, two of the most important FAANG stocks, slumped in the wake of their disappointing results. US technology stocks generally and FAANG stocks specifically have been among the worst-performing asset classes this year. Has theQE-driven tech valuation bubble finally burst?
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