The inherent danger of parabolic stock moves and how to handle
People always ask me why I dislike parabolic moves. The answer is simple: When a stock rises significantly in a short period — resulting in a price chart that resembles the curve of a parabola — it goes down far faster than it can creep up, for whatever reason. Consider a parabolic move from a […]
Beware AI stocks trading at rich valuations. How to profit from a pullback using options
Investors have grappled this quarter with how to value an AI-focused company based on its future revenue potential against its current spend to develop the product. We saw the downside to high capex spending without a clear path to revenue growth in META’s decline after earnings. While Palantir (PLTR) is not a direct parallel, it […]