Definition of Loss and Selling Strategy: Lessons from Yesterday’s MSTR Sell-Off
The key misunderstanding many investors have is the intuitive belief that “selling a stock equals taking a loss.” In reality, loss is determined by price decline itself — selling does not inherently mean losing money. The full liquidation of MSTR (MicroStrategy) disclosed yesterday was not clickbait but an example of portfolio rebalancing to maximize risk-adjusted returns. When Bitcoin spot prices rebound, MSTR might not fully reflect that upside, so capital was shifted into other assets (Bitmine, ETHT, BITO, etc.) that offer equal or higher leverage with lower risk. These alternative assets significantly outperformed MSTR after reallocation.
This example reinforces that investment decisions are based on relative evaluation, not absolute. If shifting funds from Stock A to Stock B yields higher returns under the same market conditions, selling becomes an act of opportunity capture, not loss-taking. Investors must continually compare relative expected returns and risks across their portfolio rather than focus solely on whether they continue holding a specific asset.
Yesterday’s U.S. Stock Market Summary: Mega-Tech Driven Rally with Limited Breadth
Yesterday, the U.S. market saw the S&P 500 surge more than 1.5% and the Nasdaq climb over 2.6%, but this strength was concentrated in mega-cap tech (the Magnificent 7). Sector performance varied widely, and some sectors declined, showing ongoing rotation. The market breadth index stood at 41.35, still reflecting narrow participation — sustained upward trends require expansion to the 50–70 range. The VIX fell to 20.55, indicating easing fear sentiment, though not a fully comfortable zone yet.
NVIDIA vs. Michael Burry: Accounting Allegations and Key Points of the Rebuttal
One major recent Wall Street controversy involves NVIDIA and Michael Burry regarding accounting practices and shareholder value. Burry raised concerns about dilution from employee stock options and RSUs, as well as inflated share buyback numbers. NVIDIA responded with a 7-page internal memo pointing out calculation errors and conceptual misunderstandings. NVIDIA corrected its buyback figure from $112.5 billion to $91 billion and stated that including RSU-related tax items was an incorrect calculation.
NVIDIA also addressed the depreciation period debate for GPUs, noting that customers depreciate them over 4–6 years and that older models remain highly utilized. However, this debate will likely persist as AI chip technology evolves rapidly and as corporate accounting practices differ. Investors should monitor this issue as a long-term factor rather than a short-lived event.
Key Points to Watch in NVIDIA’s Stock Movement
The market initially reacted with relief to NVIDIA’s explanation, but skepticism remains. Technically, resistance exists at $186 and $192; a breakout above these levels is necessary to confirm a real trend reversal. Long-term impacts from diluted shares (including unexercised options and RSUs) must still be monitored. Ultimately, the resolution of this controversy will be based on “numbers” — earnings and guidance — rather than explanations.
Gene Munster’s Outlook on Alphabet (Google): The Fusion of Search and AI
Gene Munster predicts that Alphabet will be the best-performing stock among the Magnificent 7 next year. His key rationale is the restoration of Google’s ability to monetize search traffic through the integration of generative AI with search. The release of Gemini demonstrated Google’s LLM capabilities, and as chatbot-type services expand, Google may create new subscription-based revenue streams (e.g., routing traffic toward Gemini modes).
Actionable Checklist for Investors
1. Compare the relative expected return and risk between current holdings and alternative investment options.
2. Monitor mega-tech and AI-related events (earnings, regulations, accounting issues) in real-time.
3. Check market breadth (advance/decline) and VIX levels to assess the quality of market rallies.
4. Set stop-loss and target-profit levels before shifting positions, and follow your rules strictly.
Conclusion: Interpretation of Information and Seizing Opportunity
This content helps investors improve their ability to interpret information and capture relative return opportunities. Selling a stock does not automatically mean taking a loss — reallocating capital to a better opportunity is a strategic success. The NVIDIA–Burry debate, mega-tech-driven markets, and the strategic sale of MSTR all point to the same lesson: investors seize opportunities by comparing risk and return based on data and information.
