Stocks were hammered again on Monday as the momentum names continue to be punished. The question of the day, of course, is if the huge declines seen recently in names like Amazon.com, Tesla, Twitter, and Yelp will cause the "meaningful correction" in the broad market indices that just about everybody on the planet is looking for.
Frankly, I don't know the answer to this question. I can say that there doesn't appear to be a fundamental driver for the current shellacking, other than some high flying stocks coming back down to earth, that is. My personal view is that either this decline, which for the record, finished its second day on Monday, becomes a self-fulfilling prophecy and people decided to panic out of stocks, or... this ends pretty quickly. But, the bottom line is that this is merely one man's opinion.
We could spend the rest of our pixels this morning making predictions about what is likely to happen next. But, since we prefer to play the hand that has been dealt instead of guessing what might come next, I thought it might be a good time to make good on my promise to offer up an idea or two on how to get the really big moves in the market right (and no, a decline of 2.5 percent does NOT qualify as such).
Getting the BIG Moves Right
Late last week, we discussed the importance of getting the really big, really important moves in the stock market right. We looked at the past 20 years and found that investors would have made a pretty penny staying invested in the stock market. In fact, from 6/1/1994 through the beginning of April, a buy-and-hope investor in the S&P 500 cash index would have made +325.14 percent.
We went on to note ...