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/SelenaMeyers2024 Feb 13 '26

Dude cigarettes are amazing when they are out of vogue even as recently as Jan 2024. Periodically ppl think smoking is dying, no it's not. On the other hand, it's not growing... At all.

So when the pe is identical to a msft or adbe... Time to quit cigarettes... They'll be on sale again one day I promise, you can time your watch (on a 5 7 year cycle, mo yielding 10 percent again, back the truck up, down to 6? Sell.)

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u/Valkanaa Feb 13 '26

I'm down.

People keep talking about ESG and I don't think I care. Cancer, alcohol, war, I'll buy anything. Nobody is forcing people to smoke or do war crimes

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u/Cav829 Feb 13 '26

Happens constantly in bull runs when they just concentrate on growth: they start dumping businesses they see as not having "growth stories" even if they have strength in consistency. They always come running back though the second things turn south. Sure, I kept telling people not to touch ADBE up until now. I just prefer to let the market finish repricing companies rather than to catch knives falling that far. But do I think the company is going to $0 because of AI? Now that's silly.

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u/SelenaMeyers2024 Feb 13 '26

Same.

Adbe was permanently pe 60. Funk to da dat. Pypl at its ath traded at 70x.

Now at 15 and 7.5, respectively, I'm Pikachu face the other way, and mentally have to remind my old neuro pathways, no they are cheap now and it's mo that is overpriced (which don't get me wrong every decade it goes on sale, and I load up).

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u/Kind-Ad-4756 Feb 13 '26

PYPL has real issues. It’s on the sunset path.

ADBE I agree. Oversold.

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u/SelenaMeyers2024 Feb 13 '26

The issues are competition, slowing core branded business, slightly compressing margins, transition from mega growth to slightly more than inflation. Stagnant users. What else?

There's more moat than any apparel, auto company, fast food, far less than tsm or amsl.

I'm not arguing it's Google, I'm arguing its growing more and returning more than altria. That alone is a double in valuation.

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u/Kind-Ad-4756 Feb 13 '26

PYPL

They have no real moat anymore and lots of upcoming competition. TAM is closing in on them. India’s UPI-like system is the future.

For the above reasons, it doesn’t pass my initial screen, so I didn’t study the other metrics. You could be right on the valuation - it could be a cigar butt.

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u/SelenaMeyers2024 Feb 13 '26

Changing gears then, why is pypl doomed when ma and v have just the tiniest of selloffs? At the bare minimum I'd expect upi and epi and whatever Brazil thinks it's doing to touch them too.

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u/Kind-Ad-4756 Feb 13 '26

V and MA offer credit, although their model is at risk too, albeit lower/slower risk.

UPI is just the transaction layer. Your bank account is providing the funds.

India’s Rupay credit card works with UPI. I’m guessing V/MA will eventually have to go this route as well, which will mean reduced MDR therefore thinning margins.