A Squeeze For the Ages

For the past few years, stocks with heavy short interest have, on average, performed better than stocks with average levels of short interest.

This year, the trend has gone into overdrive:

Turn Your Images On

Heavily shorted stocks continue to outperform the market. (Source: OnondaCapital via X)

Sophisticated investors “short” stocks because they make money when the price of the stock falls. Stocks with poor fundamentals and high valuations make good “short” targets. There are a lot of those in the market right now.

The squeeze: If you’ve shorted a stock but the price rises, instead of falling, you have to buy the stock at the higher price to close the position. It’s called a “short squeeze.” Investors in a short squeeze lose money even while the stock price rises.

If the squeeze is on across the market, companies with poor fundamentals can post huge price gains, driven by short-sellers closing out their positions.

Your eyes aren’t deceiving you. Right now, the worst stocks are the ones dragging the market higher. It’s another “feature” of the terrifying bull market underway today…

~ Addison

P.S. Our latest research with Ian King regarding Dollar 2.0, will appear later today in a special edition of Grey Swan Live!

The next regulatory environment for stablecoins favors three companies. We expect they will dominate the new monetary system as Trump guides digital assets into the mainstream.

Our estimate? $20 trillion will migrate to these platforms. That’s a positive Grey Swan event, if there ever was one.

Get ready – this latest research comes out this afternoon.

This is nearly your last chance. To receive our Dollar 2.0 research, please add your info here .

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

For the past few years, stocks with heavy short interest have, on average, performed better than stocks with average levels of short interest.

This year, the trend has gone into overdrive:

Turn Your Images On

Heavily shorted stocks continue to outperform the market. (Source: OnondaCapital via X)

If the squeeze is on across the market, companies with poor fundamentals can post huge price gains, driven by short-sellers closing out their positions.

Your eyes aren’t deceiving you. Right now, the worst stocks are the ones dragging the market higher. It’s another “feature” of the terrifying bull market underway today…

~ Addison

P.S. Our latest research with Ian King regarding Dollar 2.0, will appear later today in a special edition of Grey Swan Live!

The next regulatory environment for stablecoins favors three companies. We expect they will dominate the new monetary system as Trump guides digital assets into the mainstream.

Our estimate? $20 trillion will migrate to these platforms. That’s a positive Grey Swan event, if there ever was one.

Get ready – this latest research comes out this afternoon.

This is nearly your last chance. To receive our Dollar 2.0 research, please add your info here .

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

History’s “golden” rule will soon apply again.

A Schelling Point for the global monetary system…

Despite being the subject of status quo ridicule, gold is still the king of financial assets. Wall Street’s reflexive scorn of gold is due to the fact that gold exposes Keynesians as frauds and sometimes thieves, and threatens the premise of the existence of an entire category of academics and professionals, from Ivy League academics to mom-and-pop retail investment advisors.

If a 5,000-year old rock performs just as well as a traditional 60/40 stock-bond portfolio, a lot of people are wasting their time and money.

When you measure much of the financial world in gold, many of the supposed winners lose their luster. All you needed was an honest yardstick.

This year’s Liberation Day selloff, which really started with the launch of Chinese AI Deepseek, is similar to the market meltdown amid the LTCM collapse.

However, the AI bubble is moving a bit faster, as Timmer’s data shows a gap in valuation that doesn’t match the price action of the 1990s.

If things play out similarly from here, 2026 could mark a multi-year peak for markets as a slowdown in AI spending starts to appear and stocks sell off.

History’s “golden” rule will soon apply again.

A Schelling Point for the global monetary system…

If a 5,000-year old rock performs just as well as a traditional 60/40 stock-bond portfolio, a lot of people are wasting their time and money.

When you measure much of the financial world in gold, many of the supposed winners lose their luster. All you needed was an honest yardstick.

This year’s Liberation Day selloff, which really started with the launch of Chinese AI Deepseek, is similar to the market meltdown amid the LTCM collapse.

However, the AI bubble is moving a bit faster, as Timmer’s data shows a gap in valuation that doesn’t match the price action of the 1990s.

If things play out similarly from here, 2026 could mark a multi-year peak for markets as a slowdown in AI spending starts to appear and stocks sell off.