October 25, 2018
Markets are down substantially and speculative assets are taking it on the chin, but this is not likely the end of the rout. After 10 years of rising markets and a robust economy supported by free and easy money/credit, the normalization process will take a lot of time and valuation metrics are uncertain. While it would be a mistake to assume too much, having cash and focusing on fundamentally strong companies is the best approach.
Don’t invest money you can’t afford to lose and be prepared to wait a long time (i.e. months or years) to see markets return to normal, whatever level that might be.
I have put a couple of notes in my ‘Companies’ page regarding Nektar and Tesla. Tesla is specifically an outlier here and Nektar is probably returning to a more rational valuation, but the justification for the valuation, positive or negative, is still over two weeks away.
The other companies, all down with the market, but they have been beaten down already and generally remain good prospects for steady, long term accumulation.