Tech megacaps lose $770B in value as Nasdaq suffers steepest drop since April

Market Move in Context

• Several commenters argue the Nasdaq drop is minor when viewed on multi‑year charts; short‑term swings are normal in an upward-trending market.
• Others warn that many “small” drops in succession can become meaningful, and that zooming out can obscure real risks, especially for those near retirement.
• Some note this move merely returns the Nasdaq to prices from a few weeks ago, but acknowledge sentiment could amplify either further selling or a sharp rebound.

“Time in the Market” vs. Real Losses and Risk

• One camp stresses classic advice: stay invested, don’t try to time the market, diversified equity holdings tend to grow over long horizons, and paper losses aren’t “real” until sold.
• Critics counter that unrealized losses still reduce net worth and affect borrowing capacity and risk tolerance; “you haven’t lost money until you sell” is called misleading.
• Japan’s multi‑decade stagnation and the possibility of US “lost decades” are cited as reasons not to assume automatic recovery, especially for concentrated or tech-heavy portfolios.
• Discussion highlights the need to adjust asset allocation with age (more bonds, less equity) to avoid being forced to sell after a crash.

Valuations, Bubbles, and What Drives Prices

• Some see megacap tech (especially Nvidia and Tesla) as massively overvalued and dependent on optimistic future scenarios in AI and autonomy.
• Others argue forward earnings growth and cash-generation justify high multiples, and note that large tech firms are “cash cows” unlike many dot-coms.
• Debate over valuation frameworks: dividends and fundamentals vs. “asset is worth what someone will pay,” leading to comparisons with Ponzi dynamics and past bubbles.
• There is skepticism about retail investors beating broad indices, but some claim active strategies can outperform, especially at small scale.

Geopolitics, Tariffs, and Structural Risk

• Many trace the selloff to escalating US–China tensions: new US export controls, China’s rare earth export threats, and new US tariffs.
• Some view this as a temporary shock likely to reverse; others see a broader, more worrying pattern of decoupling and “escalation dominance” with real long-term economic risk.

Cash vs. Assets and Inflation

• One side insists “any asset is better than cash” in an inflationary environment; opponents respond that many assets underperform cash and that holding cash can be rational.
• Arguments reference historical “lost decades,” country-specific stock underperformance, and the psychological overconfidence in perpetual US equity outperformance.

Tech Crash Consequences and AI Mania

• A few warn that cheering for a tech crash ignores knock-on effects: likely recession, job losses (especially in tech), and political mismanagement.
• Others argue the AI/megacap surge is an unhealthy bubble that distorts priorities; if it deflates, capital might return to “real progress.”
• There is disagreement over whether current AI developments are transformative enough to justify valuations; some feel “this time is different,” others treat that as a classic bubble red flag.