The Motley Fool Podcast: Beth Kindig on Tech Stocks
May 27, 2022
I/O Fund
Team
I/O Fund lead tech analyst Beth Kindig joined Motley Fool analyst Deidre Woollard on podcast about Women in Investing to talk about the recent downturn for tech investors and how Beth and I/O Fund are weathering the storm.
It’s been a bumpy road, but despite that, I/O Fund and Beth Kindig continue to be buyers. “When we see a quality company being down in price, we try not to overthink it, because there will probably be a day where we will talk about the prices of 2022, meaning that they were so low,” says Beth. “The probability that 2022 was oversold is pretty high at this point. It was just an extreme reaction to the downside, as part of 2020 and 2021 was an extreme action [in] the opposite direction.”
Both Beth and I/O Fund are part of the 2030 club - meaning that we are both fully invested in tech through 2030 at minimum. Especially with tech stocks, Beth says you need to have at minimum a 3-year hold, and ideally a 5- to 7-year time horizon. She notes that her 2018 and 2019 entries are doing very well right now because she has held them for 3+ years.
Regarding the last earnings season, Deidre mentioned that although there were a lot of companies that reported some pretty strong results, the market kept reacting negatively, asking if it represented an opportunity for Beth. The I/O Fund pays really close attention to earnings, and when a company has a really strong report and the market sells off, that’s usually a buying opportunity for I/O Fund. Beth notes that while I/O Fund uses a combination of fundamental and technical analysis, as a long-term buy-and-hold tech industry analyst, she looks for management to give an outlook.
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Beth notes that even if she doesn’t own the stock, she listens to the heavyweights in adtech because they give you a broad look at the adtech industry. “They have visibility that we don't have,” says Beth. “Analysts can obviously go into channel checks, but channel checks aren't nearly as good as having visibility at the company, and the right management teams are trying to build trust with investors.”
Looking forward to next earning season, Beth states that she thinks the supply chain will have a rebound in the second half of this year - specifically noting the big auto inventory rebound in Q4 of 2021. “We're hoping that funnels through by the second half of the year,” says Beth. “If so, all kinds of industries will start to be positively impacted. Adtech, especially, I would say is one where if it can't come in the current guide, we really are watching it for the Q3 guide, which would be an adtech rebound due to supply chain issues easing. That's one to look for. What we try to remind people is that perfect timing is impossible.”
Listen to the entire podcast and read the full transcript of the interview here.
Disclaimer: This is not financial advice. Please consult with your financial advisor in regards to any stocks you buy.
Timestamps:
00:00 – Intro
00:30 – Air Travel Market
06:25 – Media Stocks
13:30 – Sleep Number
19:05 – Beth Comes In
23:00 – Beth Discusses Earnings and Sentiment with Regard to Earnings
26:42 – What Beth’s Looking for (Also includes Supply Chains and Quarters Data)
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