One of the best ways to find opportunity is to spot “blood in the streets,” we said August 5.
- Warren Buffett says, “Be fearful when others are greedy and greedy when others are fearful.”
- Sir John Templeton once said, “Buy at the point of maximum pessimism.”
- Baron Rothschild would say, “Buy the blood in the streets, even if the blood is your own.”
That’s because fear often breeds opportunity.
Nowadays, ARK Invest’s Cathie Woods seems to like it, too.
For example, after Robinhood (HOOD) plunged, ARK Invest bought $45 million worth in late July, and watched It pop to a high of $85 before it fell apart. On August 5, her firm bought 2.47 million shares of Zymergen (ZY), and is watching as the stock slowly recovers lost ground.
This morning, Cathie Wood’s firm bought $56 million worth of Zoom Video (ZM) on an earnings-induced dip. In fact, according to the New York Post, “Ark’s flagship ARK Innovation ETF snapped up 157,000 Zoom shares valued at about $45.5 million, company records show. The ARK Next Generation Internet ETF also added 37,000 shares worth roughly $11 million.”
All after Zoom said it brought it $1.02 billion in revenue, adding that it expected for revenue to remain flat to slightly down in the current quarter.
In its latest press release, Zoom noted that:
- Third Quarter Fiscal Year 2022: Total revenue is expected to be between $1.015 billion and $1.020 billion and non-GAAP income from operations is expected to be between $340.0 million and $345.0 million.
- Full Fiscal Year 2022: Total revenue is expected to be between $4.005 billion and $4.015 billion. Non-GAAP income from operations is expected to be between $1.500 billion and $1.510 billion.
That was enough to send ZM from a high of $340 to an oversold low of $290.70, where it appears to have caught support. That, and RSI, MACD, and Williams’ %R are all severely oversold.
Woods doesn’t appear to be the only bull.
As noted by TheFly.com, “RBC Capital analyst Rishi Jaluria keeps his Outperform rating and $450 price target on Zoom Video after the company reported a ‘solid’ quarter but guided Q3 and Q4 flat sequentially, sending the stock down sharply after hours. Jaluria adds however that the guidance looks ‘conservative’ as he was encouraged by the commentary around Zoom Phone and the company’s large customers. The analyst further states that he continues to like the long-term potential of Zoom to become a ‘broader platform.’”