Many growth stalwarts are plunging as their growth expectations are being revised downwards. They have traded at PEs at least in the high 20s, but are falling rapidly. Share prices of most at 5-year or longer lows. Very rare for so many of these high quality growth companies to be marked down at the same time in an expensive market.

Constellation Software on retirement of founder CEO and potential AI threats.

Novo Nordisk on newer GLP1 drugs being inferior to Lilly’s and pressure to cut US prices.

Zoetis on new competition and side effects of a new drug.

Copart on new competitor gaining share.

Lululemon on new competitors gaining share and slowing innovation and new products.

All these companies were number 1 or 2 in their segment with very strong moats, strong balance sheets and high returns on capital.

Some like NVO and LULU are already cheap on a PE basis. Others probably not yet cheap enough to attract value investors.

I have sold put options on LULU and NVO. Others are on my watchlist waiting for year end capital loss selling to end.

Do you have positions on any of them?

Falling Knives FAQ

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