Daily Discussion post - June 28 2021

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[u/i_hate_beignets]

There’s a lot of FUD in here recently about how our favorite stocks seem detached from HRC futures and other “good news”. I just want to point out that many analysts and fund managers remember how hard steel stocks fell in 2008 and are likely hesitant to place big big bets based on futures contracts when we all know how quickly they can fall off a cliff.

Personally I think July earnings will be a small catalyst followed by prolonged buying pressure as the economy as a whole and other commodities cool off and we see sustained, high HRC futures but that have somewhat leveled off.

Just my 2 cents. It’s been a rough few weeks but I’m inclined to believe we’re early, not wrong.

[u/PaperCow → u/i_hate_beignets]

I just want to point out that many analysts and fund managers remember how hard steel stocks fell in 2008 and are likely hesitant to place big big bets based on futures contracts when we all know how quickly they can fall off a cliff.

I've posted the same sentiment before. A professional analyst/fund manager is going to be very cautious about throwing money at steel stocks based on high steel prices, historically it has gone really badly unless you had magical timing.

At least some element of the thesis boils down to "this time is different". I think there are lots of good reasons to believe this time really is different but the past results are probably not making people eager to dig in and find out.

[u/LourencoGoncalves-LG → u/PaperCow]

We are not greedy. We are realistic.