Shares of GoPro are off as much as 10% today and 15% for the week. The drop comes at the end of a month-long 45% jump that effectively snuffed the hopes and dreams of any bears hoping to ride the one-trick company to zero.
By way of answering many, many questions on why I wouldn’t short a POS like GoPro I give you the stock’s 5-day chart:
GPRO is off 15% in the last 2 days. Shares had jumped 45% since February 4th. Year-to-date GPRO is now down 30%. Calling the turns is insanely hard. Catching the middle of moves can work… right up until it doesn’t. Like today.
Day-trading a pig-show like GoPro is a full-time job. It costs money to short, either borrowing costs or put buying. You can swing trade, jumping in and out to catch the middle of moves but that’s less a trading strategy than playing Russian Roulette with your money. You may go on a great run but the downside is severe.
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Hi Jeff, I posted this on your previous blog regarding $DKS. As usual, I’m enjoying your work and insight as always. Retail is your space (pun intend), and anyone asking you to get out of it doesn’t realize the value you’re providing.
Could you expand a little bit on your point in the previous blog when you say “Remember: it’s about guidance, stock reaction and brands.”? In particular, what should one look for in the stock reaction and brands? Thanks in advance for your help!
Hi… Thanks for asking, AJ. Sorry I didn’t answer sooner. I’m on a mini-vacation ‘ watching the GOP burn itself to ground.
I still haven’t had a chance to read the Dks conference call but take a moment to look at the way the stock recovered as the call was unfolding (10am). Dks issued terrible numbers but explained them in a way clearly assuaged the Street.
That reaction, Dks rising despite bad news, is very bullish. New money reacts to a move like that and complains “Wall Street is irrational”. It’s much more profitable to realize that Dks is now basically bulletproof to headline risk. The Bears were right and Dks went higher anyway. They have to cover their shorts. That creates buying pressure. Of such set-ups are momentum trades built.
Headline writers aren’t typically traders. ‘Dick’s Cautious, stock higher” seems wrong. It’s not. The reaction is more useful as an investor than the headline.
Make sense?
Sucky stocks like $GPRO need to be traded intraday—if you can stand it.
Jeff, your comment makes a lot of sense, as is the norm for you. I’m not really qualified to judge financial matters, but I can see that your analysis and reports are top-shelf quality material.
Thank you for taking the time to do your thing here, even though you don’t have to do it.
I’m not worthy of such praise. But I will accept it anyway… Thanks!