SIVB 2023-03-10 implosion - the shorts were right (the market is not dumb)
The graphic below is not to pick on anyone because everyone is wrong in the market all the time.
It is simply to prompt the logical question: what is a feasible way for one to incorporate every single opinion worldwide (from those backed by rocket scientist analysis to shoeshiner WAGs) into one's stock considerations?
You may ask "Why does this question even matter?"
Answer: because the market's opinion is the only one that matters, and the market's opinion is made up of the actions and inactions of everyone who is interested in any given stock. It's an on-going tug of war, with every once in a blue moon an SIVB-like ending.
Was it possible to foresee SIVB's demise? It was clear the market did not like the stock, at least based on action starting in later 2021. Then in all of 2022 the market really unloaded on it. Every $50 to $100 down during this decline one could have said "buy NOW!" And one would have been wrong multiple times.
Yes the stock was getting cheaper. But was it still overvalued at these various thresholds? Based on action over the past two days, the answer is clear.
Is the market really dumb or really smart?
If you are going against what everyone else thinks, you may win, and you may lose. Answering the above question correctly is paramount.
If it is really dumb, you have a better shot at winning - assuming you know what you are doing. (Not everyone does.) If it is really smart, then it is folly to go against the market.
If you believe you can out-analyze the market (aka everyone worldwide with an interest in any given stock), you are conducting fundamental analysis and you aren't reading this.
If you believe that price incorporates everything one needs to know about any given stock - or something reasonably approximating this belief - then you care about the market's opinion.
If so, then you must have a way of measuring this. Measuring stock strengthening and weakening is one way to do so.
Once you do this, you can aggregate this information into sub-industry then industry level perspectives which can offer critical and helpful insights to guide your individual stock purchases.