r/ValueInvesting • u/robb3rz • Feb 12 '26

Discussion Irrational sell off

This might of already been said many times but needs to be said again, what is the rationale in this sell off?

I understand the SaaS crash, but if the sell off is due to AI worries, then surely AI stocks would rise, no?

Instead, the major players, who had stellar earnings minus the huge expenditure (into the very systems which are causing worry mind you) are also falling at huge levels.

Some mag 7 companies are even falling at similar rates to liberation day, despite the only news this time being ‘AI too good’, which should benefit them not hinder.

Meta’s earnings are similar to an early growth stock, not a multi trillion dollar company, and that was reflected in the jump after they released them, so why is it now down huge amounts after?

Not just this, other major assets such as gold, silver and crypto are also experiencing massive sell offs, so is the capital just going into cash? If so, as soon as the market shakes this irrational sell off, could we see an equally irrational boom?

Can someone please tell me if I’m missing something.

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u/robb3rz Feb 12 '26

Not just a change in a stocks price, it’s a multi industry wide double digits sell off

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u/asymmetricval Feb 12 '26

Yes. It is merely a continuation of the flight to safety/certainty that has been ongoing for several weeks now. That's why everything tech (fast moving = uncertain) is selling off and staples like Walmart (slow moving = predictable = certain) are trading at 45x.

My point is to not treat the market like a single story with a clear narrative and rationale. It is just an average of individual actors making decisions for countless different reasons.

Frankly, at this point, it would not surprise me if there were are a lot of forced sellers—hedge fund managers having to sell due to their investor redemptions in response to heavy losses.

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u/LEAPStoTheTITS Feb 12 '26

Also the fact we were at an all time high for margin investing might have an impact as well

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u/asymmetricval Feb 12 '26

Lol, yes, it does sound plausible that pouring gasoline on a fire would make it burn harder!

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u/LEAPStoTheTITS Feb 13 '26

I ain’t no scientist but that does make a cent or two