Key insights
- The article discusses the current correction in SaaS and tech stocks, highlighting companies like MSFT, SAP, DDOG, and SHOP trading near 52-week lows. It acknowledges macroeconomic anxieties and advises caution against 'catching a falling knife,' referencing Howard Marks' warning about overpaying for even good assets. The overall tone suggests a bearish short-term outlook for the sector, but identifies potential long-term value in fundamentally strong companies.
Tech and SaaS companies are suffering right now.
Giants like MSFT, SAP, IBM, ACN, INFY, CTSH, SNOW are trading at or very close to their 52 week low.
Everyone is anxious, the macronomics can't help either.
But amongst SaaS companies, I see great companies with very good revenue, ROE and growth, alongside low debt, that are trading at their low prices. Like DT, SAP, MSFT, DDOG, SHOP.
But they may take even more hits at the market, and common sense in the investing community says "to not catch a falling knive", Howard Marks says " There's no asset so good that it can't be overpriced and become a bad investment"
what's the most reasonable approach in such cases ?