Nov. 19 at 9:21 PM
$APP This is an excellent company with extraordinary fundamentals. It’s growing FCF more efficiently than any other software firm, yet still has a PEG well under 1, so actually undervalued for its growth rate.
But it’ll underperform the index short-term without a catalyst for fundamental investors to come back in big, leaving algos/flows dominant in a nasty short gamma regime below
$600 now: any rip is sold by option dealers to hedge, without much real money to catch it.
Like this should be up 3+% when QQQ is up 1% as it was this morning. But see how as the day goes on, it lags worse and worse vs. the index: after any run up, the slightest slip in QQQ triggers hedging flows to pummel it 5x as hard, then it has to grind back up from a lower spot, rinse and repeat. This dynamic will switch if we get a strong enough catalyst to push us above
$600, or it tanks below
$500… I’m very bullish long-term, but I have lots of shorter-term puts too…
