There are a lot of ways to evaluate whether or not an asset is worth adding to your portfolio. One thing to look at is valuation. In Monday’s edition of Good Buy or Goodbye, Public Ventures President and Chief Market Strategist Lou Basenese explains why he likes iShares Russell 2000 ETF (IWM) and is avoiding Reddit (RDDT), based in part on their valuations.
The iShares Russell 2000 ETF is "a great way to play the whole basket of small-cap stocks," Basenese says. He also likes the ETF’s technicals and says the "setup’s right" for small caps to see some big gains. Basenese does, however, caution that higher-for-longer interest rates could be bad for small caps if they go on for too long.
One stock Basenese is skipping is Reddit. Basenese thinks the company is going to struggle to turn a profit. He also doesn’t like that Reddit doesn’t really own any patents and he thinks the stock is overvalued.
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