Update on Two Oldies but Goodies

In the year since I wrote about Erie and Corvel, both stocks have been hammered. But the fun may have just begun.

▶Just over a year ago I wrote a report headlined, “Levitated by Lunacy”...

It focused on two companies – Erie Indemnity $ERIE and CorVel $CRVL. The stocks of both appeared to be rising sharply for no other reason than they had been touched by the silent hand of momentum-fueled, algorithmic-inspired passive investing... rather than what was going on beneath the surface. Both also were well off the radar, which will always be a magnet for me.

First up, Erie, which is off the radar for good reason: It’s too heavily nuanced for most. But it has been a strong underperformer since I first red-flagged it roughly a year ago...

Not even being added to the S&P 500 could help for more than a few weeks. Since my original report, and several follow-ups. A friend who watches Erie exceedingly closely recently shared his latest internal update with me. In a nutshell, here’s what his work suggests...