Why Have Growth Stocks Plummeted? An Interview with Tobias Carlisle

<p>In 2021, many growth investors suffered severe losses even while the S&amp;P 500 index advanced 27%. A recent Bloomberg <a href="https://www.bloomberg.com/news/articles/2022-01-06/number-of-nasdaq-stocks-down-50-or-more-is-almost-at-a-record?s=09">article</a> pointed out that almost 40% of the stocks in the Nasdaq Composite Index were down 50% or more from their all-time highs. It continued, "At no other point since the bursting of the dot-com bubble have so many companies fallen like this while the index itself was so close to a peak."</p> <p>Are tech stocks down big because the Federal Reserve expects to raise interest rates several times this year? Did their valuations get too stretched in their post-COVID runup?</p> <p><a href="https://twitter.com/greenbackd?lang=en">Tobias Carlisle</a> joined 7investing Lead Advisor Matthew Cochrane this week to help us walk through these challenging questions. Carlisle, the founder and managing director of <a href="https://acquirersfunds.com/">Acquirers Funds</a>, believes it is important to weigh the company's quality with the valuation investors must pay to buy shares.</p> <p>In an exclusive interview with 7investing, Tobias describes his investment philosophy as "quality at an unreasonable price."&nbsp; He states that he looks for three primary qualities before investing in a company: 1) a discount to a conservative valuation; 2) a strong, liquid balance sheet; and 3) a robust business capable of generating free cash flows.</p> <p>7investing Lead Advisor Matthew Cochrane and Tobias Carlisle walk through the definitions of value and growth stocks. Before the conclusion of the interview, they discuss a stock they both like, <strong>Lockheed Martin</strong> (NYSE:LMT), and some of the qualitative advantages it enjoys as a prime defense contractor.</p> <p><br></p> <p><br></p> <p>Welcome to 7investing. We are here to empower you to invest in your future! We publish our 7 best ideas in the stock market to our subscribers for just $49 per month or $399 per year.</p> <p>Start