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Analyst Read: Hedging Against Tech

You may want to pick up a few value stocks to hedge against tech.
(Khakimullin Aleksandr)
(Khakimullin Aleksandr)
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In general, we are innovation, tech and growth-oriented investors with a value investing foundation. As such, almost all of our favorite compounders and growth companies are technology companies, but we also like to anchor a chunk of the portfolio in solid, value businesses (as seen in the Target Allocations).

We have always picked our stocks based on our confidence in their long-term growth prospects regardless of the pandemic, but in the short-term, the market will clearly punish tech stocks indiscriminately, and I want to hedge against that. I’m looking into some return-from-home stocks, such as $Lyft, and hope to add a couple of options to the Big Board today. 

I discussed this on my Live Stream on YouTube last night and will address this week’s ROIC-exclusive Making Cents further. But the takeaway is that if you own a disproportionate amount of tech stocks, you may want to consider hedging a piece of your portfolio with solid value stocks that will play well in a “return-from-home” scenario (not the deep value travel stocks, though). 

In other news, DoorDash just filed their S-1 in anticipation of going public! Be on the lookout for some video content on YouTube, Instagram, and TikTok (hopefully today) on what I think about the company’s financials.

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