Samsung reported earnings. Chip stocks dropped. Investors who rode a 145% gain decided that wasn't enough and sold everything like children flipping a Monopoly board.
The AI bar got set high. Samsung cleared most of it. The stock fell anyway because apparently doubling your money in less than a year creates reasonable expectations for tripling it by Thursday.
This is technical analysis in its purest form. A chart goes up 145%. It stops going up. People who bought at the top call their broker screaming about fundamentals they didn't read before they bought. The fundamentals were fine. The fundamentals were always fine. The fundamentals will be fine next quarter when these same people buy back in at higher prices.
Samsung makes chips for AI. AI is the future. The future apparently needed to arrive last Tuesday or the whole thesis falls apart. Every semiconductor stock sold off in sympathy because the market operates on the principle that if one company in a sector disappoints overheated expectations, every company in that sector must also be punished immediately.
The earnings weren't bad. They just weren't good enough to justify a stock that went parabolic because someone on Twitter said AI chips would print money forever. Turns out Samsung is a company that makes products and reports quarterly results like every other boring business that's existed since the invention of accounting.
Retail traders who bought semiconductor ETFs three weeks ago are now experts on fab capacity and margin compression. They learned these terms yesterday while panic-selling at a loss.
The chart said buy at 145% up. The chart now says sell. This is why you're poor.
Photo by Jonathan Kemper on Unsplash
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