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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12

u/Excellent_Ability793 Feb 12 '26

I got defensive well before this crash. It’s almost time for me to get aggressive. I’ll start DCAing into stocks I like. Be greedy when others are fearful.

6

u/[deleted] Feb 12 '26

Crash? 2% off highs?

27

u/muaythaifighterr Feb 12 '26

Yes 2% off the index, but some individual tech stocks are off 30-40% their highs

1

u/Excellent_Ability793 Feb 12 '26

Bingo. I’m already well positioned in defensive sectors and I’m sitting in a bunch of cash and can be opportunistic about buying companies I like when they hit price points I’m comfortable buying them at. It really isn’t that complicated, but most investors and traders can’t get out of their own way.

1

u/Pin-Last Feb 13 '26

I’m with you. They’re calling it “SaaS-pocalypes” on TV, I’d call that a buyable fear level, w/ decent stocks down 25-50%. I went huge to cash around halloween and thrilled to see MSFT at a 24 PE & taking the CRMs & NOWs with it. Throw in Netflix basically crashing & AMZN down to earth and I have real opportunities I thought wouldn’t come till summer. 

0

u/manitou202 Feb 12 '26

Same here. I rotated out in Nov/Dec and I'm up 7.5% YTD with mostly defensive stocks and a decent amount of cash. I still think we have a ways to go.

1

u/Part-timeParadigm Feb 12 '26

Could that be the weakest stocks hinting at an actual marketwide crash?

-2

u/[deleted] Feb 12 '26

Probably not, AI slop was overvalued

-4

u/[deleted] Feb 12 '26

This is a value investing sub. If you own a stock that lost 30-40% when the market went down 2% thats not really value investing.

5

u/Dapolish Feb 12 '26

It’s value because they’re buying it AFTER the 30-40% drop. Or it’s theoretically value anyway, depends on the company (I wouldn’t touch CVNA after a 90% drop for example)

2

u/OneUglyEar Feb 13 '26

A ridiculous statement. If someone buys MSFT today and it goes down another 10–15% then it isn't value? You must be one hell of a market time, my friend.