Hey guys, it's sasha if you've been following my channel, then you'll know that recently i've been investing quite heavily into tech stocks and i'm gon na be making videos about some of the specific tech stocks in the next few weeks and tell you why i'm particularly excited To buy them, but before i do, let me talk about the tech sector in general and why i think that the next year can be incredibly good for that sector, because there's so much talk about the overall market being overvalued. But i think that many people are missing out on some really critical points. Now a brief disclaimer. I am not a financial advisor.

I cannot provide financial advice to you and if you do need financial advice, please make sure you go and seek the help of a suitable, qualified professional. This is just my personal opinion about my personal investing strategy which might not apply to you now. There is one really obvious point that i think people will raise in this kind of video, so i'm going to address that one first, and that is that the market is horribly overvalued and even worse than that, the tech companies within the market are even more horribly Overvalued in the market in general, look at what the s p 500 has been doing over the last year. The biggest bull run in history has just happened, and i am here telling you that a load of companies might have a huge 12 months ahead of them.

Despite this, in fact, look at some of these tech stocks. Some of them are not making any profit at all. Others are trading in multiples of 30, 50, 70 or even higher, which is pretty crazy. Those numbers might sound really bonkers to a traditional investor.

It sounds like the market is going to pop. Surely those valuations are insane right. Well, let's talk about those valuations and let's start with something that is very unique about the situation right now now, while the market is 12 up in just four months since the end of january overall, look at what happened to the tech sector in that time, tesla Is 32 down, as i'm recording this video amd is 20 down, palantir is 44 down. Fiver is 28 down.

I can keep going for a while with almost every single tech stock out there. So this is a super interesting trend, because if you haven't been invested or paid particular attention to the tech sector, you probably don't even know that there's been a huge tech sell-off going on, and this is why it's unique tech is the powerhouse of today's market. The five biggest companies in the united states and the biggest contributors to the s p 500 are tech businesses, which is quite unusual and hasn't been the case before. Given the rapid pace at which technology is changing and the way that we live is changing along with it, that is likely to continue and tech is likely to make up a an even greater proportion of those s.

P 500 companies in the future we haven't got a name for it yet, but by all accounts we're in the middle of the next industrial revolution. But here's the interesting bit we've just had a huge tech sell-off, while the market didn't feel anything. In fact, the market is booming. If your money was invested in the s p 500 index, then you are having an incredible 2021, but if a crash was to happen, how much further can these tech stocks fall from the position they're at already stocks? That would normally go and collapse during financial crash are already trading at a 40 discount.

We didn't have that with finance stocks before the 2008 crash happened. We did not have that with the dot-com businesses before the dot-com crash. So if amd is growing at 93 year-on-year and is trading at a p e ratio of 33 - and we did have a market crash - let's say that took 50 percent off their share price. Is it really going to be trading at a multiple of 16 and if they grow halves over the next year, which, by the way i in no way think that it will? But let's say it does to be conservative, then the pu ratio at that point in the future will become 10.

to me. That sounds pretty bonkers, because a rapidly growing tech company dominating its market and in a market which is growing itself trading at pe ratio of 10 would mean i'd really have to sell my car and both my kidneys to buy in but anyway, the next most important Thing to consider is look at the pace at which these tech companies are growing. In some cases, we're talking some seriously staggering numbers and with these numbers evaluation that seems crazy, can turn into conservative in just 12 months. Look at what happened to the companies that i've mentioned tesla amd fiver over the last year, we're talking 100 plus growth in their share price.

Each and that's what's been driving much of the market growth as well. Palantir hasn't been traded long enough to show those kind of numbers with these sorts of tech, businesses you're looking at a quarter and quarter growth rate of 20 or higher, and the really important counterpoint here is of course, past performance in no way implies future performance, but With some of these companies, i still think we are incredibly early on in their growth journey rather than coming to its peak, and the industries within which they are operating are growing too. And that means that the growth is not coming from having to out muscle their competition. It is coming from this industrial revolution that we're finding ourselves in continuing to play out, and there are a lot of people saying that we're waiting for the crash and at that point we're going to go and invest our piles of cash into those growth stocks.

But the thing is, in july, we're going to go on to the next round of q2 earnings calls and that's only about a month away and those earnings score. So some of these companies will continue to show that they are growing, because that's the position that those companies are in right now and what's today, deemed as a hypothetical, maybe for the future, may become a factual baseline at that point, wait another quarter and the growth Might be pushing 40 or 50 for those same stocks, and that might be four months away, and the revised target share price will use those new numbers when analysts plug them into their dcf models or use their multiples. And even if the crash then comes at some point later this year, even if it does go and wipe 40 percent of the value of those stocks, they might still cost more at the bottom of that crash than they do today. But here is the best bit: the industrial revolution is being pushed and encouraged by our governments and the markets don't seem to notice this fact.

Look at some of the headlines that have been coming out just in the last few weeks. The uk government is planning to ban gas boilers in four years time - that's almost 100 of all uk households, which will then have to begin switching at that point to new greener energy solutions. The united states and countries all over the world are planning to ban internal combustion cars with electric cars having to replace them and we're just at the start of that journey. Remote working, big data analytics and innovation.

How we communicate are all here to stay and are all going to continue propagating across the world as the way that we live our lives and the way that we work changes and who are the companies that stand to benefit in a big way. From these huge cultural shifts, it's those tech companies sure some of the big car manufacturers will adapt and play catch up when switching to electric cars, and some of them may well do incredibly well, but some will probably be slow because their ships are so incredibly difficult To turn around, it requires a huge amount of expenditure and a huge amount of effort to go and completely revamp your entire production line and some won't adapt at all. Because that happens with every single big step in technology and some of those car manufacturers will go and do a kodak. So what that means is that the natural gap is going to open up, because that's how these things play out and new players are going to have to enter, to, go and fill that gap to meet the huge amount of demand.

And this is why i'm extremely excited about what the future holds for tech stocks and why i am personally invested in them. I will be talking in a lot more depth about some of these specific companies. I'm investing in talking about the valuations and talking about some interesting facts about them and some others that i am not investing in, because i think those will be quite interesting topics. Conversation.

Thank you so much for watching. I really really appreciate it and, as always i'll see you guys later, you.