The Nasdaq Composite index is officially in a bear market. The Nasdaq tumbled 3.6% on Monday, pressured by soaring oil prices, rising interest rates, rampant inflation, continued supply-chain issues due to the various and sundry – rational and irrational – responses to COVID-19, and the ongoing Russian invasion of Ukraine.
Since closing on Nov. 19 at 16,057.44, the Nasdaq Composite has now fallen 20.1%, crossing the 20% threshold that traditionally defines a bear market. It’s the first time the market has taken a hit that hard since the early months of the pandemic in 2020.
There haven’t been many places for tech investors to hide, and many stocks long since entered their own private bear markets, as investors fled high-growth, profitless, high-multiple tech shares for safer climes.
Apple has been one of the stock market’s best hiding places, with a decline of less than 1% since the market top. An aggressive purchaser of its own shares, Apple is seen as a refuge, protected by both ongoing strong demand for the company’s flagship product, the iPhone, and a sterling balance sheet.
MacDailyNews Take: The great advantage of cash-rich, cash-generating Apple is that it’s a refuge from the vagaries of the market.
Three quotes from Warren Buffett:
• Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.
• Wide diversification is only required when investors do not understand what they are doing.
• Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.
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