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Mid Cap to Sub $50 Billion Tech Companies Sell Off?


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It will be interesting to see how much some of these tech companies that have gross margins of 70% plus and are growing 25% a year as to how much they will come down if they continue to grow even faster due to the virus. Some of these companies will slow down after a vaccine but others will continue to accelerate.

Obviously, if the entire market sells of 30-40% then everything will go down due to forced liquidity but I have a number on my watch list.

Investing is never dull! Exciting times to look at companies that can be a 5 bagger over the next 5-10 years.

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Any specific companies you have in mind that you think are interesting or may become so. May feel is that this segment of the market is generally very overvalued because:

1) recent growth rates boosted by the Virus epidemic are extrapolated In the future

2) transition to profits for a lot of these companies is unclear because marketing and G&A seems to match or even outrun revenue growth. Companies call it investment, but there is also a risk that operating expenses are misclassified as marketing and customer acquisition costs, boosting gross margins  etc. Companies may know how to play the game...

 

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