Over recent years MM has on occasion bought stocks which have delivered disappointing earnings with admittedly mixed degrees of success, “buy the dip” is often an excellent strategy in the middle of a bull market but it has a lot less foundation in a mature one which has the ability to leave stocks in the “naughty corner” until they prove they can again perform on the corporate level i.e. for many months, or even years. Overnight PayPal (PYP US) illustrated the point perfectly, it’s a stock we have been discussing cutting over recent months and in line with todays title our first loss would have undoubtedly been our best loss!
MM believes 2022 will be a great year for Active Investors which importantly by definition means be prepared to be proactive in cutting losses.
We are only 1-month into 2022 and the differential between the markets best and worst performing stocks is already over 45% illustrating investors need a very good reason to fade trends this year i.e. a great illustration of our transparency at MM as we own both of these names across our portfolios i.e. AGL Ltd (AGL) has rallied +18.6% while PointsBet Holdings (PBH) has fallen -26.7%.
NB The one move we will be considering fading this years is when stocks breakout on the upside to fresh multi-month / year highs as we do anticipate a number of these moves (pops) will fail in the current market cycle.
MM likes AGL moving forward
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