“Companies’ estimates are wildly different from what investors think they are worth.”
“If you have turbo-charged growth stocks, you either have to prepare for the pain or reduce your losses in the next sharp upward movement, because we are in a new market that is very different from last year,” said the host. “What works in 2020 doesn’t work in 2021, and that won’t change, so get used to it.”
That explains the loss of stocks such as Tesla, Teladoc Health, Square, Roku, Shopify, Zillow, Twilio, Spotify, Coinbase and Exact Sciences, Crammer noted. Most of their shares fell in double digits in May.
Crammer calls them “WoodStocks”, named after Cathie Wood, portfolio manager of the popular company Ark Invest. The shares make up the largest positions for Ark, whose exchange-traded funds include Innovation’s ARK brand funds, Genomic Revolution and Fintech Innovation, among others.
“Cathie Wood is fantastic at identifying [long term growth] stocks like Twilio, but they are not stocks for all seasons,” Cramer said. “They don’t work in that environment, and they really don’t work in any inflationary environment where bond yields are rising.”
Commenting on the decline in technology stocks, Wood told CNBC on Friday that he “loves this setting” for the company’s long-term prospects.
Junior Trader Mert Mustafa