- I avoid bubble stocks like Nvidia, which has traded at extreme overvaluations since the second half of 2023.
- Insider selling was aggressive in 2024, with nearly $2 billion in net liquidated value, before recession fears appeared in early 2025.
- I believe current Wall Street forecasts for Nvidia EPS and sales growth are overly optimistic, not accounting for potential recession and competition impacts after early year growth.
- The trading chart is highlighting an expanding imbalance of sellers vs. buyers since July, with an ugly momentum pattern reminiscent of early 2008.
Many regular readers know I do not chase bubble stocks. And, I generally try to persuade others not to buy equities with extreme overvaluations. This description has fit NVIDIA Corp. Nationally ranked stock picker for 30 years. Victory Formation and Bottom Fishing Club quant-sort pioneer…..Paul Franke is a private investor and speculator with 38 years of trading experience. Mr. Franke was Editor and Publisher of the Maverick Investor® newsletter during the 1990s, widely quoted by CNBC®, Barron’s®, the Washington Post® and Investor’s Business Daily®. Paul was consistently ranked among top investment advisors nationally for stock market and commodity macro views by Timer Digest® during the 1990s. Mr. Franke was ranked #1 in the Motley Fool® CAPS stock picking contest during parts of 2008 and 2009, out of 60,000+ portfolios. Mr. Franke was Director of Research at Quantemonics Investing® from 2010-13, running several model portfolios on the Covestor.com mirror platform (including the least volatile, lowest beta, fully-invested equity portfolio on the site). As of September 2024, he was ranked in the Top 3% of bloggers by TipRanks® for 12-month stock picking performance on suggestions made over the last decade.A contrarian stock selection style, along with daily algorithm analysis of fundamental and technical data have been developed into a system for finding stocks, named the “Victory Formation.” Supply/demand imbalances signaled by specific stock price and volume movements are a critical part of this formula for success. Mr. Franke suggests investors use 10% or 20% stop-loss levels on individual choices and a diversified approach of owning at least 50 well positioned favorites to achieve regular stock market outperformance. “Bottom Fishing Club” articles focus on deep-value candidates or stocks experiencing a major reversal in technical momentum to the upside. “Volume Breakout Report” articles discuss positive trend changes backed by strong price and volume trading action.
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