Is investment trust arbitrage a real strategy?

NedS

adindas said:

You could also have a look in individual small to mid cap high growth stocks in technology some of them are even down 80%, a few are 90%. Most of these stocks are unprofitable. In the current bear market environment, high interest rate these companies are hated, investors are very careful as there are the risk they could dilute their shares, doing reverse split when they are hovering around $1 or go bankrupt if they could not manage their debt to stay afloat.

But these technology sector is high risk high reward play. When they recover, they also recover with multiplier. It is not uncommon they rise 20%+ in a day without catalyst. In Biotech sector for instance when there is a strong catalyst such as successful drug trial, authority approval they could shot up 10X in just a few days.

We are unlikely to see the type of supportive conditions (mature bull market, near zero interest rates, supportive monetary policy) for this again for a very long time so I would not expect these type of stocks to bounce back in the way you describe. The party is over and most people have already gone home.
Moving forward, finding quality smaller companies that are profitable with strong cash flow and balance sheets that have been dragged down with the rest to highly oversold positions - that's where the strong recoveries are more likely to come.

adindas

NedS said:

adindas said:

You could also have a look in individual small to mid cap high growth stocks in technology some of them are even down 80%, a few are 90%. Most of these stocks are unprofitable. In the current bear market environment, high interest rate these companies are hated, investors are very careful as there are the risk they could dilute their shares, doing reverse split when they are hovering around $1 or go bankrupt if they could not manage their debt to stay afloat.

But these technology sector is high risk high reward play. When they recover, they also recover with multiplier. It is not uncommon they rise 20%+ in a day without catalyst. In Biotech sector for instance when there is a strong catalyst such as successful drug trial, authority approval they could shot up 10X in just a few days.

We are unlikely to see the type of supportive conditions (mature bull market, near zero interest rates, supportive monetary policy) for this again for a very long time so I would not expect these type of stocks to bounce back in the way you describe. The party is over and most people have already gone home.
Moving forward, finding quality smaller companies that are profitable with strong cash flow and balance sheets that have been dragged down with the rest to highly oversold positions - that's where the strong recoveries are more likely to come.

Some stocks could still pop up 2x due to strong catalysts even in the current environment. Other possibility is short squeeze. But this is more suitable for trading and not investing. I never suggest anyone to get involved these sort of trading, Unless they know what they are doing.

In my previous message, I am not suggesting anyone to get involved these short of stocks especially the unprofitable stocks in the current environment.

This is an example of short squeeze. The party has not finished yet.

adindas

NedS said:

adindas said:

You could also have a look in individual small to mid cap high growth stocks in technology some of them are even down 80%, a few are 90%. Most of these stocks are unprofitable. In the current bear market environment, high interest rate these companies are hated, investors are very careful as there are the risk they could dilute their shares, doing reverse split when they are hovering around $1 or go bankrupt if they could not manage their debt to stay afloat.

But these technology sector is high risk high reward play. When they recover, they also recover with multiplier. It is not uncommon they rise 20%+ in a day without catalyst. In Biotech sector for instance when there is a strong catalyst such as successful drug trial, authority approval they could shot up 10X in just a few days.

We are unlikely to see the type of supportive conditions (mature bull market, near zero interest rates, supportive monetary policy) for this again for a very long time so I would not expect these type of stocks to bounce back in the way you describe. The party is over and most people have already gone home.
Moving forward, finding quality smaller companies that are profitable with strong cash flow and balance sheets that have been dragged down with the rest to highly oversold positions - that's where the strong recoveries are more likely to come.

Another stock that Popup 450%+ witihin two days. The party has not finished yet.

This is not about short squeeze but the power of catalyst. Catalyst is very powerful in Biotech stocks

https://uk.finance.yahoo.com/news/applied-dna-initiates-analytical-validation-120300127.html

adindas

Another one. Stock of the Century

The stock of the Century ? MEME Stock HKD (AMTD Digital) 32,000% in less than a month 

https://www.msn.com/en-us/money/markets/shares-of-a-chinese-tech-firm-are-up-more-than-15000-25-since-its-july-ipo-and-even-the-company-has-no-idea-why/ar-AA10enoq
https://finance.yahoo.com/news/mystery-meme-stock-no-one-162000061.html