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Keep calm and carry on (buying)

When bad news is good news

If you missed the market top last year, and failed to unload your hot stocks and take the profits, don’t panic – yet. The real crash is still to come. But not now.

Sure, stocks and commodities are down. Everything from gold to Bitcoin has slumped. Megacaps like Apple and Microsoft have seen their share prices tumble, and the ‘growth’ darlings Tesla and SpaceX have collapsed.

But the sky isn’t falling. Granted, it’s a massive correction from last year’s highs, but it’s not like we haven’t seen this movie before. Remember the ‘big dip’ in 2024? Call it a healthy correction or just simple fear and doubt, but markets never advance in a straight line.

In 2024 it was conflict in the Middle East and recession fears that were blamed for the mini-crash, but in reality the tech sector was overvalued with AI hype. This time, in 2027, they’re blaming the latest energy crisis and China, but again the high-flying stocks were overvalued in 2026, and smart investors cashed out en masse.

And after the selloff, the clever money went back into quality stocks. If you want to accumulate wealth in the longer term, then buying the dip is a solid strategy. Any finance expert will tell you that, if the business fundamentals are sound, then short term market sentiment has little bearing on investor returns.

It’s bad news for anyone who bought in at the peak of inflated expectations, but it’s great news for someone who has cash, and can afford to stay calm and keep on buying.

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Through our Shareholder Value Analytics toolset, Futureworld can quantify how capital markets value innovators. If a firm’s market capitalization is higher than its intrinsic value, shareholders are paying a premium to be invested in the firm. This is simply described as an expectation premium (an expectation that a firm’s intrinsic value will adjust upwards over time because of compounding future growth prospects). Interesting conclusions can be made from the analysis as it pertains to which sectors capital markets are paying a premium to be invested in. The reality that firms are faced with today, is that premiums are often paid at the intersect of various sectors. For more insight into the dynamic world of changing capital markets, please reach out to Futureworld Partner Louis Geeringh or the author Doug Vining.

Warning: Hazardous thinking at work

Despite appearances to the contrary, Futureworld cannot and does not predict the future. Our Mindbullets scenarios are fictitious and designed purely to explore possible futures, challenge and stimulate strategic thinking. Use these at your own risk. Any reference to actual people, entities or events is entirely allegorical. Copyright Futureworld International Limited. Reproduction or distribution permitted only with recognition of Copyright and the inclusion of this disclaimer.