Playing Catch Up?

Mean reversion is not a strategy that should be in growth investors playbook. Financial instruments lag and lead for a reason. Technicians believe the market will forecast what traders should overweight in their portfolios, due to the strength they exhibit. Some groups just need to take a well needed breather, and perhaps that is what is happening with the software group. We often mention how we think competition is a good thing with markets, just as in life. Battle for technology supremacy is fought between semiconductors and software. Is software ready for a robust leg higher, or is its recent fragility a sign that it will continue to do so? For investors like myself that prefer to trade individual names, the answer is to trade each stock on its own merits. For those that would prefer to enter weaklings like SAP AYX or SPLK, will forfeit opportunity cost in leaders that will most likely continue to shine, like a TTD NET or CRWD. And additionally waiting for losers to firm, takes a toll on not only your physical capital, but your mental capital as well. 

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