Federal Reserve chairman bearish social networking shares

"It appears that Yellen has not yet officially entered the role of actually commenting on the valuation of specific sectors." Sotheby's trader Stuart McGregor exclaimed.

Last week, when Fed Chairman Janet Yellen attended a Senate hearing, he said he was concerned about the higher-than-expected valuations of some small-cap, biologic and social-networking stocks whose "price-to-earnings ratio" Relatively high. " As soon as this remarks came out, small cap stocks, biological stocks and social networking stocks in the US market dropped immediately.

Sun Yu, chief trading officer of easy-forex in China, agreed with the above statement in an interview with the "First Financial Daily." Sun Yu believes that, after all, Yellen is chairman of the Federal Reserve, the stock market point of view and the market there are differences. More precisely, Yellen is a macro-level view of the valuations of small caps, bios and social networking stocks in US stocks. Different angles, the results obtained are also different. So, Yellen is a politician who is not familiar with US stocks.

In fact, the US stock Internet and biotech stocks have been surrounded by the "bubble theory" this year. However, whether the stock price is reasonable based on price-earnings ratio, especially for the Internet and biotech stocks?

Some analysts pointed out that most of the Internet and biotech stocks are still in the development or growth period, the majority have not yet made a profit. If this time with other physical companies as a reference standard, then these tech stocks are not worth the investment. For technology stocks, price-earnings ratio index does not apply, "City Dream Rate" is sometimes more appropriate. An important part of evaluating the value of technology stocks should be their future development prospects, which can not be measured by the current data.

The analyst further pointed out that technology stocks have their own specialties, such as Internet technology stocks, mostly advertising revenue, but the early stages of development, page views and traffic volume has not yet reached the appropriate scale, advertising revenue and can not be reflected . In the biotech sector, due to the need for pre-approval of new drugs to be listed after multiple approval procedures, the clinical trial period is relatively long, which also resulted in a larger final outcome variable. However, once certain types of drugs are approved, many companies are even undervalued compared to the company's share capital and stock price.

Wen Yi Capital Partners Jian Yi does not agree with the above point of view, he told the "First Financial Daily" reporter, these biotech companies are still in the early stages of research and development, research and development failure rate is high, but they have been listed on the financing. Market fears: Owing to the lack of usual restrictions, the owners of these companies can use the IPO to make huge profits in the short term. This biotech boom has sparked the technological revolution that has taken shape in recent years, creating a number of billion-dollar pharmaceutical companies such as Biogen Idec, Gilead and Amgen.

Jane Yi said investors may want to vote in the next biotech lucky, but market data show that the listing of these stocks have begun to erode the enthusiasm of investors. As many as 14 biotech companies were listed last year, and 6 of them have fallen below their IPO price. With more and more public companies, the risks of investing in these stocks are getting bigger and bigger, and maybe each of them may be overblown, but the result will not change - there will always be few successes. By the time the bubble burst, they will understand that the more they stand, the harder they fall.

In addition, Jane Yi also believes that there is a little bubble in technology stocks. First, despite the current strong economic recovery in the United States, compared with the eve of the financial crisis, there is still a big gap between the current U.S. economy and the stock market. Second, considering the rate of inflation and the unemployment rate alone, the U.S. economy does indeed look very good. However, there are still hidden behind the good things, which from the Fed's attitude toward raising interest rates can be seen. In the job market, there are many part-time workers, low labor market mobility, low wage growth, long-term unemployed people and low labor force participation rates, which have not been significantly improved recently.

Therefore, Yellen's concern is not without reason. "In the event of a certain type of emergency, it is highly likely that the US stock market will adjust in depth, and geopolitical issues are most likely to trigger a correction in the US stock market in the current global situation," Sun said.