Bloom Energy Profit-Taking Caution
"Bloom Energy, down 10% after five up sessions in a row, is showing signs of being overextended. It might be time for those who bought at the breakout to consider taking some profits."
Ed Carson highlights that Bloom Energy (ticker: BE) has experienced a notable 10% decline after an extended rally. He advises investors to consider trimming positions when stocks get overly extended, emphasizing the importance of having an exit strategy to protect gains.
Strategy: Combining Index Funds with Select Stock Slots
"I say own an index fund for half your money. You've got to be saving constantly and then take five slots. Try to find four really good stocks and a speculative one. ... Provided that you try to find the next FANG. And I'm fortunate enough to create a FANG because it was just something that seemed funny."
Jim Cramer recommends that individual investors balance their portfolios by allocating half of their investments to index funds and using the remaining half to take concentrated positions in five stocks (four quality long-term holdings and one speculative pick). He even entertains ideas such as investing in niche areas like nuclear power or Bloom Energy for hydrogen fuel cells. Although not a direct buy call on a specific stock, this recommendation aims to encourage retail investors to move away from day trading and focus on a structured, long-term approach to compounding returns.
Short Squeeze Risks in Small/Mid-Cap Stocks
"This portfolio is up 16% in 45 days. In that portfolio, Bloom Energy is up 125% since August and it has a 20% short position. These are massive moves in heavily shorted stocks, and such parabolic moves cannot be sustained without a correction."
The discussion highlights a group of small and mid-cap stocks – including Bloom Energy, AEHR Systems, AppLov, Lattice Semiconductor, and Accelis Technology – that have rallied sharply (e.g., Bloom Energy up 125% in a short period) amid heavy short interest. The implication is that these parabolic moves, driven by short squeezes and exuberant buying, are unsustainable and likely to face a significant correction, urging investors to be cautious or consider taking profits.