Yes Fundamentals Still Matter
Plus Quick Updates on OTTR, OKLO, HIMS
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After watching a few Red Flag Alerts Focus List stocks rip yesterday, I posted on social media...
Ditto trying to reason with a crazy person.
Or... you pick the metaphor.
What I know about companies on my Focus List is that they’re there for a reason – because, in theory, they’re riskier than other stocks. I’m agnostic about what people do with my information. Go long ‘em. Go short ‘em. I don’t care. We’re in a market where everybody’s got an angle. Some use fundamentals. Some use charts. Some use both. Some use neither... and just go on gut.
To which I say: whatever works.
But in the end, the fundamentals win out.
Squeeze the Shorts?
Sure. Just remember there’s a whole body of academic work that shows heavily shorted stocks have a history of significantly underperforming even more than lightly shorted stocks, since (for better or worse) shorts often pile into the same ideas for the simple reason: Where there’s smoke...! Not always, but often.
Squeezes are nothing new, but thanks to changes in market structure, with social media as added fuel, they appear to be more violent and extreme.
But in the end, as I often say: Have fun taking the express elevator up because, with the cushion of natural buying by short-sellers gone, there’s a high probability it will be an empty elevator shaft down.
I feel so strongly about this that I’m seriously pondering running a list of short-squeeze candidates, except relabeling them as Today’s Most Dangerous Stocks. (Let me know what you think!)
Enter Hims...
Yesterday was one of those whack-o (more like Whack-A-Mole) days.