MOST PROLIFIC SHORT SELLERS AMID COVID AND THE RISE OF ROBINHOOD TRADERS
Activist short sellers have ramped up activity this year. During the first half of 2020, dozens of stocks have seen wild price swings. Many biotech companies saw their stocks skyrocket after they joined the race to develop a COVID-19 vaccine. The rise of the so-called Robinhood traders has also caused many stocks to behave irrationally, giving activist short sellers some lucrative opportunities. Here we take a look at the most prolific activist short sellers in the first half of 2020.
FIVE REASONS WHY I’M BUYING NIKOLA CORPORATION HAND OVER FIST
I love Nikola Corporation (NASDAQ:NKLA) because the stock goes up and not down. This means the stock makes me money and I will become rich one day (I own three shares). I wanted to share my knowledge on why I’m buying Nikola Corporation hand over fist.
IS TESLA EVEN IN THE AUTO INDUSTRY?
The standard method of determining what industry a company is in is by looking at its underlying business. By that standard, Tesla is clearly in the auto business. Virtually all of the company’s revenues and costs are related to building, selling, and servicing automobiles. But there is another way of checking whether a company is an industry that has implications for investors. The idea is that if two companies are in the same industry, then their stock prices should tend to move together. For example, when the Covid-19 crisis arose, the stocks of all major airlines collapsed together. This raises the question of whether using this second criterion Tesla is in the auto industry. Before turning to the results, a couple caveats are in order.
TOP 10 ACTIVIST SHORT CALLS THAT PAID OFF BIG TIME IN H1 2020
Those shorting stocks during the COVID-19 pandemic have made more than $50 billion in profits. Billionaire Bill Ackman recently said that activist short sellers are far more efficient than regulators at unearthing corporate frauds, and that regulators should work with short sellers. Here we take a look at the top 10 best performing activist short calls in the first half of 2020 that paid off big time.
MOHNISH PABRAI AND HIS FAVORITE TECH STOCK, MICRON (Q2 LETTER)
In his latest letter to investors, Mohnish Pabrai warned about the perils of buying stocks at high prices. He explained that it’s possible to overpay for even the market’s most promising companies. Giving Microsoft as an example, Pabrai noted:
TRUMP WHITE HOUSE ACCELERATING TOWARD A DOLLAR CRISIS
As US economy is heading toward its disastrous 2nd quarter results, the Trump administration is considering the expansion of the trade war to finance, which could destabilize the US dollar and derail the post-pandemic global economy.
PULLBACK FROM RECORD HIGH GOLD PRICE NEEDED FOR $2,000 AN OUNCE
The gold price reached a new record high this week, beating the previous record set on Sept. 5, 2011. The gold price kept rising past the record high to new heights as the week wore on, and now the $1,940 record that was set on July 28 appears to have become the new floor for the price amid today’s pullback.
WHEN QUINTESSENTIAL CAPITAL TALKS MARKETS RESPOND
ValueWalk will hold the next Contrarian Investor Virtual Conference on Aug. 11, and Gabriel Grego of Quintessential Capital will be among those presenting new ideas. Among the short ideas Grego has presented previously are Akazoo, Bio-on, Aphria, Foli Follie, Globo and AAC Holdings (data via Breakout POINT).
CAN NEWS SENTIMENT DATA HELP DISTINGUISH THE OVERVALUED STOCKS MOST LIKELY TO FALL?
Stocks that are considered overvalued can remain elevated for a long time before reverting to fair value and investors looking to short-sell such stocks can run the risk of entering the market too soon and getting stopped out. One of the eternal questions of investing is how to pick those stocks that are ripe and ready to fall versus those that still have higher to go. Timing, as ever, is key.
GOLD AND SILVER UPS AND DOWNS – WHY IS THIS HAPPENING?
Gold and Silver Prices This week, gold and silver continue to make sweeping historical moves. On one hand, the gold price broke through first $1850, then $1900 within two days. On the other hand, the silver price exceeded $20 on July 20th, then saw $21, $22, and $23 in the following days. Although the silver price doesn’t seem much more significant as compared to the gold price, silver actually increased faster. Therefore, silver is currently outperforming gold. So what caused this monumental change with gold and silver?