Published on Jan. 5, 2021
Jason Benowitz Featured in Bloomberg “Megacap Tech Stocks Still Have Lots of Fans After Historic Run”
“These companies have profits and cash flows and solid balance sheets,” said Jason Benowitz, senior portfolio manager with Roosevelt Investment Group. “High valuation by itself is not a sufficient thesis to be negative on a stock.”
The big risk, according to Benowitz, is if interest rates rise even more than is currently forecast. Indeed, the Nasdaq 100 fell 1.4% Tuesday as yields on the 10-year U.S. Treasuries jumped 16 basis points in just two days, serving a reminder to technology investors of the need to guard against unwelcome surprises. Higher rates reduce the present value of future earnings, weighing especially on shares of highly valued, fast-growing companies.