6-6-25 Market Moment

By Randy Williams Gurian on June 6, 2025

Magic Levitation Trick in Reverse

I have written before about the magic levitation trick. Recall, this is when a stock moves up quickly for no apparent reason, but usually during a period when investors have lofty expectations for a company. It can also happen during a bull market when investors’ appetite for taking risks is higher. An IPO came public just this week that opened up 77%, above the expected range. The reality is that the magic levitation trick can also work in reverse.  We just had a fashion-forward, athletic-apparel company report in-line numbers, but gave no guidance, claiming the tariffs are making it difficult to project consumer demand, especially if the tariffs involve higher prices, which they generally do. Perhaps that explains why Mr. Market is more critical of company results when they miss the mark.  

Sorting out the good from the bad is never easy when it comes to picking stock-market winners. I have found that using the levitation trick in reverse is a strategy that can play to your advantage. It allows you to buy more shares of a company you already own at a discount, or perhaps even create an entry point for a company you had on your shopping list. The largest cellphone producer is suffering mightily due to the expected impact from tariffs, yet I am optimistic there could be some favorable news related to China and trade that will help the company recover quickly from its recent drop. My takeaway is to not give up easily on the names I love. 

Speaking of giving up easily, the Mariners are in a funk again, which doesn’t surprise me, given the way the roster was constructed. All good teams have losing streaks that eventually end, but just like the market, no one knows when the pain will stop. Hopefully soon. Unfortunately, the M’s are asking a lot from their younger players. They need a few more proven major-league hitters if they expect to have playoff baseball in Seattle this year. We dropped from first to second place this week after being swept by the Orioles, one of the teams with the lowest records possible at this time of year. Thinking altruistically, it was nice of us to give them some help. I just hope we don’t continue with that mindset much longer! Go M’s!