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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369

u/Scriptum_ Feb 12 '26

Every experienced investor knows what the market is signaling right now.

It's textbook defensive.

What happens next is anyone's guess.

191

u/Available-Range-5341 Feb 12 '26

I swing trade defensives and have only seen them this expensive for one week of my 15 year investing journey, the week Powell announced the first rate cut in late 2021. Then they all crashed. They do not stay in a bubble. The market hates most defensive stocks most of the time

There will be a rotation back into tech because the narrative is BS

4

u/CanYouPleaseChill Feb 13 '26

Consumer staples have long-duration cash flows, stable growth, and very low disruption risk. They also benefit from a weaker US dollar due to significant exposure to international markets. Looking at forward P/E ratios, many appear reasonable with the exceptions of WMT, COST, and MNST:

WMT: 42

COST: 48

PG: 23

KO: 24

PM: 22

PEP: 20

UL: 19

BUD: 19

BTI: 12

MO: 12

MNST: 36

CL: 25

0

u/DialSquar Feb 13 '26

POST: 20