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kalinda

1,909 Posts.

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08/06/24

14:29

Post #: 74229724
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Originally posted by 1ronnie: ↑

In fact I would argue that sectoral macro is far more important to a stock's fortune than the company specific micro. When lithium was booming, every lithium stock did well, no one really cared as much about company specific issues. But when the sectoral macro sours, the company that is good is still the same, as good no matter but its stock falls anyway because macro takes precedence. So those who cling to the idea that their magnificent company should not face stock price headwinds in the midst of a sectoral macro storm clearly has not learnt from history.

When gold price dropped after its 2020-21 boom ended, the best gold miner like NST saw its price experience a sharper than normal correction. After gold macros improved from 2023, however, gold miners continued to trade in a disconnected fashion relative to gold's rise- despite the macro, we saw many company specific risk issues with production, high AISC that caused gold miners to trade at a discount relative to the gold price.

So a good micro in the absence of a good macro would still likely to be unfavourable for the stock price. A strong macro in the absence of poor micro would be exceedingly bullish for the stock price.

I provide macro backdrop in this thread and I pick on some stocks to illustrate what failing macros can do to them. And I tend to pick on stocks with audience that have been extremely bullish when they ought not to.

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