As we said in Part 1, a decade of egregious central bank money pumping and price-keeping has fostered a vicious pack of short-squeezing algos and day traders. The latter maraud through markets — pouncing on meaningless headlines and other incoming noise while positively quashing any vestigial impulse toward honest price discovery.
Accordingly, short-sellers and skeptical investors have been taken out behind the barn and shot, causing two-way markets to vanish and leaving the the casino exposed to the tidal force of pure momentum. Even old fashioned fund managers who surely know better dare not sell for fear of under-performing the benchmarks and loss of AUM.
There is no better proof of this than in the absurd run of the NASDAQ 100 and the FANGMAN stocks at the center of it. As we will demonstrate below, every one of these seven stocks are wildly overvalued for slightly differing reasons, but taken together they have come to epitomize an utterly false Wall Street narrative.