Say what you want, this market gives you a ton of opportunities to reposition your portfolio. I reiterate that the stocks that are vulnerable are the ones of companies that are losing tons of money and sell at a price-to-sales ratio.
Now I fully admit that some of these stocks will be home runs. They could be the next Tesla (TSLA) , Netflix (NFLX) , or Amazon (AMZN) , three companies that lost a lot of money and then had a breakthrough where they went to profitability. You had to own them when that happened as you made a fortune.
Here's the issue: most of the companies that you might be investing in because you think that they might be the next Tesla, Netflix, or Amazon won't get there. They also seem binary -- they either get there or they fail as companies.
If you understand that, if you are willing to take that risk owning "non-profitable techs" as Goldman's David Kostin highlighted, understand that they have gone up a lot, gone down a lot, but are still well above where they started.
We don't own any of these kinds of stocks for Action Alerts PLUS. There are so many high-quality tech stocks that now sell at or below the market multiple -- especially if you subtract the cash on the books -- that I ask why do you even need more than one or two of those?
Good time to reposition unless you are willing to take a beating. The reprieve is here. Do not miss it.
This article originally appeared on The Street.
