Key insights
- The post criticizes the lack of thorough due diligence in stock analysis on a particular subreddit, citing examples like SOFI and quantum computing companies. It highlights concerns about oversimplified investment theses and a lack of understanding of underlying fundamentals, particularly regarding institutional analyst concerns and the practical applications of quantum computing. This suggests a potential disconnect between retail investor sentiment and institutional scrutiny, which could lead to misinformed investment decisions and increased market volatility for specific stocks.
This was inspired by the recent SOFI post which laid out a bull case for the stock then described the institutional sell-side analyst accusing them of artificially inflating earnings last week as "noise". I'll admit I'm not a sophisticated investor, but Steve Eisman found the analyst's claims credible without taking a short position himself and I would never bet against a successful institutional short seller unless I really understood what was going on in detail. In this case I definitely don't, and it's clear that poster didn't either (or at least they didn't bother to detail why).
I wouldn't be complaining about a single post, but it seems almost endemic here that people are being upvoted for theses as detailed as "PE ratio low".
This is probably the most obvious when we discuss quantum companies even though the general sentiment is rightly negative. I'm not sophisticated financially, but I do happen to have a background in scientific computing strong enough to read primary research in quantum computing and half the time its brought up here even most of the bears make it clear they haven't bothered to investigate the field at a bare-surface level before discussing, and will make arguments like "its definitely the future, but..." while the bulls are making arguments worse than the average WSB "line goes up" argument.
If I built a perfect quantum computer tomorrow which could run trillions of error-corrected qubits a second, we still wouldn't have anything definitely useful we could use it for besides hacking bitcoin and modeling some specific chemical reactions. A large fraction of physics, math and computer science geniuses worldwide have been working on algorithms for quantum computing for the last 40 years and those are the only **theoretically** useful tasks they've come up with so far. Its far, far, from "inevitable" that quantum computing is the future. It's just a cool as hell area for R&D and companies like Google use it to attract top talent, look cutting edge, and make a long-shot bet that it might be relevant someday or that the supercooling tech will be useful somewhere else.
I'm not asking for everyone on here to be a quantum computing expert, but is there any way we can at least enforce a minimum standard of due diligence effortposting and industry knowledge for top level posts laying out a bull case for a stock?