Uncertainty causes much instability. Instability causes much worry. Worry causes much illogical decisions too. When some companies are overvalued (or overpriced), its stock price stays perched high up when everyone thinks that the next financial year will surely be even better. When some companies are at the right valuation, its stock price may still drop tremendously when the market becomes bearish or full of negative sentiments. With the current COVID-19 making everyone panic and buying up all the toilet papers, what’s happening to some of the biggest names in the world?
Article in cnbc.com The five biggest tech firms, Amazon, Apple, Alphabet, Facebook and Microsoft lost a combined $416.63 billion (RM1.78 trillion) in value on Thursday (12th March 2020) as the markets continued to be very negative due to coronavirus fears and economic uncertainty. Shares of Apple plunged 9.88%, Facebook fell 9.30%, Alphabet dropped 8.2%, Amazon fell 7.98% and Microsoft dropped 9.48%. Just a month ago, these five had been the biggest contributor to the market rally that lifted the S&P 500 to a record high. This drop is even bigger than on Monday when the big five lost $320 billion and recovering somewhat within the week. Please do read the full details in the Article in cnbc.com
I think everyone is worried that the market will be so badly affected by COVID-19 that a recession soon follows. Perhaps we should also look at whether these businesses will be affected negatively when the market recovers. Some easy questions to ask?
Will people stop buying Apple products? Will people stop using Facebook as social media and as part of digital strategy? Will we forget google in the near future? Use less of google.com? Amazon may not be that famous over here but let’s understand this question. Will the Americans stop buying things through Amazon? Last but not least, anyone believe that Microsoft Office will somehow be forgotten or a replacement product appear soon? Happy understanding yeah.
Next suggested article: Anything overvalued best skipped. Stocks too