Fools Rush In

Buying beaten-down stocks on hopes for better days is a normal, if risky, investment strategy. But the newbie “investors” that have been driving this rally are taking this to a whole new level.

Hertz became the most heavily traded U.S. stock Wednesday, with shares posting the largest gain on record before paring gains.

HTZ volume of 264 million was the most among US companies and more than double that of GE, which saw the second most activity; this flurry of activity helped the now worthless stock briefly reach $1.49, a record 168% increase, before paring gains to $1.00 only to rebound again and close at $1.31.

At least this serves to confirm the reasoning behind this rally – betting on a miracle.

It does cross my mind that this Hertz stock and Bitcoin share the same intrinsic value. And look at Bitcoin. Also I note in passing that, since Tuesday morning, the Nasdaq remains notably much weaker than the Dow and S&P. Retirement of the generals who have led the advance is seldom a sign of longevity for a rally.

Both comments and trackbacks are currently closed.