KEQU- A dose of the reality of this market
Stock down 50% from recent highs, and quickly, on one slightly disappointing report ! I understand that some stocks have gone up 50% or even 100% real fast, but they a few and far between vs the dozens that tank like crazy, and often for little reason. I have played at least half dozen stocks over the last few months. Every one of them(other than GERN) had strong eps growth expected, and a small PEs going forward vs peers in the same exact sector.
However unlike 2003 to 2019 or so, small cap stocks just aren't acting rationally. That is, great reports and strong guidance doesn't move stocks in a healthy way. What do I mean by healthy ? That is, if an earnings report suggests the stock is worth 30% higher than the pre earnings price, it shouldn't go up 25% the first day, as those not holding into earnings, have hope for only 5% more. It also shouldn't go down on earnings day, and stay there for weeks, then 7-8 weeks later the stock go up 30% in two days. It also shouldn't not go up or stay flat the entire quarter.
In other words, if one expects to not have to hold into earnings to make out, here is what has to happen. You have to be able to buy the stock on earnings day or even the next day, and then hold over a matter of a few to several weeks, and expect that the stock will get to fair value. However almost every single stock I play either goes down or stays flat for the entire quarter after a great report- and it doesn't matter how cheap it is, or how much it was going up before I buy, or anything else. Also it doesn't matter if I stick with a stock for months, or just play it for a week or two, it never goes up more than a few % while I own it. Now I played PSIX multiple times on the way up, but only netted around 15%- 20% profit, and that was most I've made on a stock % wise in over six months !
For those up more than 20% over the last year- hats off to ya
AI
