Definitely also something I'm looking at. Quite a few stocks are down a lot more than the general market. Especially small caps and stocks that are clearly undervalued but require more than a few quarters to deliver that value.
The all-seeing analyst who "knows" that Sphere is more undervalued just puked her Sphere all over you and went all-in on Cube. She understands path-dependency and "knows" that you and all her all her pod shop bros will pile into Cube as soon as the market turns. Then she dumps Cube rotates into Sphere.
This "game" is nuanced and hard and very few win enough for it to be worth their lives (is it ever?).
Thanks for a great post, lots of food for thought. One element that this made me think about was catalysts - In your examples of switching from known names to more dislocated stocks, you are changing your exposure from (presumably) a specific catalyst for that known stock to a stock that may not have a specific catalyst besides being "cheaper". How do you think about that and manage the risks/timeline of that?
Great insight
Thanks for the shout out Andrew!
Definitely also something I'm looking at. Quite a few stocks are down a lot more than the general market. Especially small caps and stocks that are clearly undervalued but require more than a few quarters to deliver that value.
The all-seeing analyst who "knows" that Sphere is more undervalued just puked her Sphere all over you and went all-in on Cube. She understands path-dependency and "knows" that you and all her all her pod shop bros will pile into Cube as soon as the market turns. Then she dumps Cube rotates into Sphere.
This "game" is nuanced and hard and very few win enough for it to be worth their lives (is it ever?).
Thanks for a great post, lots of food for thought. One element that this made me think about was catalysts - In your examples of switching from known names to more dislocated stocks, you are changing your exposure from (presumably) a specific catalyst for that known stock to a stock that may not have a specific catalyst besides being "cheaper". How do you think about that and manage the risks/timeline of that?