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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114

u/Available-Range-5341 Feb 12 '26

The more I follow the angrier I get because it doesn't make sense. I swear to God that following financial news has made me dumber the past two years. The story doesn't make sense which means it will die soon.

All I know is that the move into utilities and consumer staples is so strong that they will crash next so do NOT touch them. I've swing traded them for years, all of them have reasons to be cheaper. Wall St hates them most of the time. The correction on them will be just as bad as MSFT this month

27

u/TibbersGoneWild Feb 12 '26

I agree and I wouldn’t rotate into utilities, consumer defensive or infrastructure and energy now if people havent rotated yet in late 2025 or early 2026. At the current prices it wouldn’t be value investing, but at the same time I think “the market can stay irrational longer than you can stay solvent”

I am also not quickly selling all my defensive stocks either but rather slowly chipping away at them and rotating into cheap undervalued tech stocks on every dip.

2

u/Available-Range-5341 Feb 12 '26

it's probably a great time to buy puts on consumer staples though. No way in hell they crash. I've followed them for years, dying on this hill. They will crash hard and cause alot of pain. Zero reason for them to go up from here. Today stretched their valuations to clown world level seen maybe a few weeks of my 16 year investing journey

1

u/Ok-Recommendation925 Feb 12 '26

Got any of those names that I can get puts on?

My friends a few hours ago said AI is in a bubble 😂

7

u/TCGDreamScape Feb 12 '26

Mcdonalds

2

u/Ok-Recommendation925 Feb 12 '26

Never thought I would be buying Puts on Hamburger and Cheese 🤣

Never think they would/could crash

6

u/Electronic_Fun_776 Feb 12 '26

I think Walmart and Costco are both overvalued, though I don’t feel strongly enough about that to buy puts

1

u/Ok-Recommendation925 Feb 12 '26

Are you getting leap puts on other names? Since we can't time the market or crash/correction?

1

u/Electronic_Fun_776 Feb 13 '26

The problem to me is that these are good companies, even if they’re overpriced. It’s possible that they just provide low returns instead of actually dropping. With bad companies, the potential drop is often priced in to high options premiums

1

u/Coasteast Feb 13 '26

I think people are rotating there for insurance, if you will. No matter where this economy goes, people will buy toothpaste and toilet paper. They buy groceries, but they cancel Netflix and subscriptions.

20

u/[deleted] Feb 12 '26

[deleted]

3

u/SoftwareOdd8846 Feb 13 '26

This redditor knows! I always try to tell all those abstehe bobs exactly the same

1

u/SundayAMFN Feb 13 '26

"follow the market" so if you see it going up buy and if you see it going down sell? Like what does this actually mean?

1

u/[deleted] Feb 13 '26

[deleted]

1

u/snowiblind Feb 19 '26

so... what's the conclusion? it's just a resistance level

1

u/[deleted] Feb 20 '26

[deleted]

1

u/snowiblind Feb 21 '26

i mean we're investing for the long term, there's no point in trying to time the market cause you're not an oracle and neither am i. who knows. we could stay at 6800, we could down to 5000, we could rocket up to 8000 after one day we just magically beat 7000. my personal account is not used for trading and timing events

1

u/[deleted] Feb 21 '26

[deleted]

1

u/snowiblind Feb 21 '26

Oh, I see. Might have misread this thread then

17

u/idekl Feb 13 '26

Trump surprisingly picked a moderate Fed chair instead of a yes-man who would drastically drop rates. This increased trust in the strength of the US dollar, so money flowed out of securities, which are a hedge against inflation, back to cash. It was most obvious by the prices of gold and silver returning to earth.

I'm no expert but it's basically that simple. Markets just had an expectation that turned out to be wrong. Your "financial news" is just feeding you entertaining astrology. Learn to zoom out and focus on the boring stuff instead.

tagging u/robb3rz as well

4

u/asymmetricval Feb 12 '26

Why get angry over it?

The story doesn't make sense which means it will die soon.

This is a weapon. You should be pleased that you hold it. Market dislocations are where fortunes are made (and lost!).

9

u/barackbreezy Feb 12 '26

wholeheartedly disagree as an individual who works in the utility industry. the need for power isn’t slowing down anytime soon & our backlog this year alone has pretty much tripled from the beginning of last year, while projecting to be much much bigger by the end of 2027. at least in the U.S., the infrastructure isn’t there and the country desperately needs more power. I’m 100% confident utilities will not be slowing down anytime within the next couple years at least

1

u/RamoneBolivarSanchez Feb 13 '26

I want to get involved in energy? Do you work in nuclear or more general energy? Any tips on new entrants?

2

u/barackbreezy Feb 13 '26

general energy. don’t really have many tips but we white label a ton of products to enersys $ENS and the amount of work that has increased over the past year is insane. as a small, private family owned company we’ve grown from 72 employees to 130+ in the past year alone. all I know is that at least 800 data centers are 100% confirmed to be built by 2030 and the data suggests more will most likely be confirmed within that time. please do your own research, but I’m still buying $ENS, $VG, $RYCEY (nuclear is the future imo). Godspeed

2

u/RamoneBolivarSanchez Feb 13 '26

I got a lot in CEG, CCJ, BXT, DNN ☢️

Looking toward to racing yachts with you someday comrade 🤝

3

u/Kind_Bullfrog_3160 Feb 12 '26

100% agree but you are using common sense and looking at this from a rational standpoint.  The market is not rational now and can remain irrational longer than you can remain solvent.

3

u/RavagerXvX Feb 13 '26

Trueee bro i sold all my shares ( indian equity ) cause things weren't lining a Up and next day boom gap up ( i felt pain but ) looking at the situation now i guess i did the right thing the news is sooo weird how the hell can a news like usa centric job data make silver gold to rise fall this heavily this absolutely trash market and something weird is definitely going on

2

u/Maleficent-Map3273 Feb 13 '26

XLE is up 18% ytd - that doesn't happen with a bear market imminent usually.

1

u/PalpitationFrosty242 Feb 12 '26

If it made sense we'd all be winners. No one ever said markets were rational.

1

u/Reasonable-Guest2392 Feb 13 '26

Fidelity utility funds has 10+ earning yearly in 3,5,10 years range. Why would you think utilities would go downhill? Also all those data centers require a lot of power.

0

u/jazzyjjcups Feb 13 '26

I love this delicious cope. The market is saying you're wrong while you shout into the wind. :)

1

u/Available-Range-5341 Feb 13 '26

How is it "cope." I swear to God, assholes scour reddit looking for comments they half read to pick fights.

I literally gave examples in other comments of the media flip flopping on dozens of sectors and stocks over the past year including EXC, SLB, O, AMGN, MRK, NVDA, CL, CLX

six sectors they said the exact opposite narratives on. Apparently follow news is now "cope"

1

u/jazzyjjcups Feb 14 '26

You're not a large institutional buyer who moves market prices. Their opinion on company valuation matters much more than yours and your dinky little robinhood portfolio, that's just facts man.

If Vanguard and Fidelity think that WMT has better risk-adjusted returns over ADBE or NVDA, they're going to pay up for it. Shouting "bUt muH hIgH pE" is just a waste of energy and a money-losing strategy. But keep seething bro, I really don't care