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- Prem Watsa stated that growth stocks are now more overvalued than they were during the dotcom boom.
- According to "Canadian Warren Buffett", tech stocks are extremely overpriced in comparison to value stocks.
- Fairfax Financial Chief and billionaire investor, Fairfax Financial, warned that growth stocks could plummet.
The "Canadian Warren Buffett", a billionaire investor, has warned that technology stocks are now absurdly more expensive than they were during the dot.com bubble. He also predicted that they would experience a sharp decline.
Prem Watsa stated that the valuations of value-oriented stocks and growth stocks, especially technology, has never been more extreme than it was in 2000's dot-com bubble. We expect to see value-oriented stocks rise in popularity as the economy normalizes.
Watsa, the founder and CEO at Fairfax Financial is an insurance conglomerate that has a multi-billion-dollar stock portfolio. It's often compared with Buffett's Berkshire Hathaway. According to Sentieo/AlphaSense, he gave his dire outlook for US growth stocks during Friday's fourth-quarter earnings call.
On the call, the value investor stated that although his stock holdings are still undervalued, he believes that this will change. Fairfax's portfolio doubled between 2000 and 2002 while major US stock indexes nearly halved over that time.
He also noted that even though the market rallied this year, Big Tech stocks such as Amazon and Tesla still remain sharply below their peak in 2021. Their smaller counterparts like Zoom and Shopify gained even less ground.
Watsa stated that history has shown us there is more to come. "I'll note that the Nasdaq fell 50% in 2000, and then dropped another 50% over the next two years."
Fairfax and Berkshire share many key holdings, including Chevron and Bank of America. Watsa shares Buffett’s passion for concentrated bets. Seven stocks, including Blackberry, accounted almost 90% of Fairfax’s $4 billion portfolio as of December.
Read on: 7 burning questions were posed to David Rosenberg, top economist. Here is what he had to say about stocks and house prices and the possibility of a recession.
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By: tmohamed@businessinsider.com (Theron Mohamed)
Title: The ‘Canadian Warren Buffett’ warns tech stocks are more overvalued than during the dot-com bubble – and predicts a painful selloff
Sourced From: markets.businessinsider.com/news/stocks/prem-watsa-warren-buffett-fairfax-growth-tech-stocks-bubble-crash-2023-2
Published Date: Tue, 21 Feb 2023 11:32:02 +0000
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