Buying Peloton and similar growth stocks is 'absolute nonsense,' says strategist

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Peter Toogood said high-growth tech stocks were also unlikely to rebound after a Fed 'pivot.'

High-growth tech stocks are unlikely to rebound after a "pivot" on interest rates from the Federal Reserve, according to one market strategist. Peter Toogood, chief investment officer at investment platform Embark Group, said a change in interest rate strategy by the U.S. central bank will indicate the economy had taken a turn for the worse, which will send "profitless growth stocks" crashing even further.

The ARK Innovation ETF , which currently holds shares in about 30 mostly profitless companies chasing "disruptive innovation," is down by more than 65% this year. The fund, run by Cathie Wood, doubled in value from its pre-pandemic levels last year but has now given up all of those gains. Wood has attracted criticism from a range of value investors for the fund's lackluster performance, including Toogood.

 

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What about buying stocks that have no long term debt and ever increasing free cash flow? Is that absolute nonsense as well?

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