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Excessive Investor Sentiment: XOM, TSLA, & Bitcoin


Excessive Investor Sentiment: XOM, TSLA, & Bitcoin


Investor sentiment can drive prices for assets either higher or lower than their intrinsic value. Exxon is a good example of negative sentiment. Exxon was removed from the Dow Jones Industrial Average in September when the stock was selling at a price below the lows during the 2008-2009 market correction. Since the removal, Exxon (and the entire energy sector) have been one of the best performing sectors. Tesla is an example of positive sentiment driving the stock well above intrinsic value. The stock is being added to the S&P 500 index later this month at lofty levels. This is similar to when Yahoo was added to the S&P 500 Index in December of 1999. The next few years that stock underperformed significantly. Bitcoin is another example of excessive investor sentiment in today’s market environment.

Written by

James E. Gore, CFA®, CAIA, CMT®

Jim serves as the Chief Investment Officer of THOR, is a Chartered Financial Analyst charter-holder, a Chartered Alternative Investment Analyst, a Chartered Market Technician, a member of the Association for Investment Management and Research and a member of the Cincinnati Society of Financial Analysts.

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