The Tech Rally Shows You Need to Buy Stocks Others Hate – Like These

Posted by on Jun 5th, 2023

After watching large-cap tech stocks zoom higher over recent months, don’t you wish you could jump in your time machine and buy these stocks last year?

Or even a handful of months ago, as investors bailed out on tech stocks after values had fallen by 50%, 70%, or more.

Let’s use this as a lesson to buy stocks that investors currently hate…

It is hard to believe that 2022 was a bear market for tech stocks, with steep price declines. Let’s look at some numbers for a few stocks investors hated last year. Share prices peaked in late 2021 and bottomed in October 2022. Yes, the bear market lasted for almost a year.

  • The Invesco QQQ Trust (QQQ) lost 38%.
  • Microsoft Corp. (MSFT) dropped by 39%.
  • Alphabet Inc. (GOOG) fell by 45%.
  • Tesla Inc. (TSLA) lost 75%.
  • Meta Platforms Inc. (META) dropped by 75%.
  • NVIDIA Corp. (NVDA) fell by 69%.

And yet, these are the same large-cap stocks that investors love this year.

There are a couple of essential points to understand. Most of the 2022 bear market losses had occurred by May. Absolute lows were hit in October and November. Prices didn’t start a serious recovery until January. As a result, the stock market felt ugly for eight to nine long months.

Percentage changes can be funny. The most a stock can lose is 100%, but there is no upside for a stock that goes to zero. From a 50% loss, it takes a 100% gain to return to the previous high. It takes a 300% gain to recover from a…

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