Welcome to Popularity & Price

Welcome to Popularity & Price!

The psychological relationship between popularity and price is unique.

“Unpopular” stocks setting new highs may march higher despite the narrative that the stock is “too expensive.”

How can the stock continue to climb? It’s overvalued… Yada yada yada.

And the inverse can also be true — a popular stock printing new lows implies bag-hodlers. The bandwagon grows and with it more bag-hodlers.

We can use this meme as a reference to the madness of crowds.

Or this clip of a man dancing at a music festival. At the end, the man is a “hero.”

This idea applied to investing is not new. Howard Lindzon shared this thesis many times. It’s Momentum Investing at its finest. In a recent episode of Trends with Friends he walks us through it.

The stock market is not a popularity contest, but sometimes the inverse is true.

To learn more, here are a few great books on crowd psychology.

Extraordinary Popular Delusions and The Madness of Crowds

The Crowd - Study of the Popular Mind

Here are today’s lists of new 52-Week Highs and Lows sorted by total followers on Stocktwits.

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