The big question on Friday was undoubtedly: “How worried should I be about this Wall Street sell off?” In reality, we should be more concerned about what Broadway did, as the Nasdaq exchange is not in Wall Street (where the Dow and the S&P500 hang out) but actually on Broadway.
It was the worst day for the hi-tech index since November 2011 and there was no trigger shock from left field. Reuters explained it well when it quoted Randy Frederick, managing director of active trading and derivatives for Charles Schwab in Austin, Texas. This is what he said: "Momentum names have been driving this market higher. A lot of these names have been trading at stratospheric valuations, and on long-term outlooks, that may or may not materialise. The question is, 'At what point do they get too expensive?' Right now, I think they're looking a little expensive."
I think he’s spot on and it could easily spread to the rest of the stock market to create an overdue correction. But it’s not worrying me. In fact, I’ll be on the lookout for a chance to buy more stocks at better prices over the next few weeks.