A Millenials First Nasdaq Crash

Author

Howard Lindzon
October 12, 2018

A lot of young investors asked me what the best recession hedge was today?

I told them ‘marry rich‘. Being born rich is one hell of a hedge as well, but you MUST be really nice to your parents to make sure they cover any future margin calls.

Stefan, who runs content and community at Stocktwits , had a great post up titled ‘I Survived The Great Bear Market of 10/10‘

If you’re 29-years-old, your first job started in 2011 or 2012. That means you did not start really saving until a few more years after that. It’s at that point you began investing. It’s at that point you probably really started to pay attention to markets. And that’s where today’s sell-off is historic.

An entire generation of new investors saw their first big drop today. It also happened in the sector they love: tech. Think Netflix, Amazon, Facebook, Twitter, Square, and all the biggest names sprawled across the current generation’s iPhone. The landscape of young and inexperienced investors is interested in buying names generations before them do not understand. Most of these happen to be categorized as tech companies. Most of them were pulverized from 9:30 AM ET until 4:00 PM ET today. Some were hit even harder in after-hours.

I don’t know if this is the start of a wider sell-off. No one ever really knows. But I do know, for many in this age group, today was the first big sell-off they’ve seen in their young investing careers across the basket of stocks they’ve handpicked themselves. I think that’s worth noting, and worth talking about the next time you and your friends get together to chat about markets.

I’ve been hanging in the Stocktwits HQ a little this week and I love seeing the passion, energy and respect Stefan and his team have towards covering the markets.

For most of the afternoon yesterday, I was on a train to Washington DC, so I was just watching the close and trying to figure out how ugly the markets were going to get.

By about 5 pm I shared that from my reading…the bears were extremely smug, the FANG believers were shaken and than CNBC announced a markets in turmoil. I tweeted these were conditions for a bounce. I quickly changed my Twitter profile to Nibbling Lindzon.

As if on cue, the markets are pointing to a very strong opening.

I have no idea if this mini crash continues today or we stop and rest. We will see.

We can argue whether the last few days were a crash, but this chart captures how nasty it has been for technology stocks at least.

Have a great Friday.

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