Fool Me Once… Fool the Trading Algos Over and Over Again
Why does the market fall for peace rumors time after time? Let me explain. Also, ever hear of the Great Pumpkin trade?
Meta’s Lack of Reality
Position: None
The Problem With Overconfidence
This morning’s stock futures are getting pounded. The S&P futures are -75 handles and the Nasdaq is -490 handles.
Yesterday I wrote about something that I find disturbing — continued and frequent hubris on the part of commentators, panelists and guests in the business media. I suppose if you say stuff confidently viewers may view talking heads as knowledgeable (We all know that confidence and investment successes are not equivalents!).
To me, presenting overconfidence in delivery is worse than being wrong. It creates a false sense of security and is a disingenuous character trait as it relates to a market that has an unprecedented range of outcomes (some of them being adverse).
Let me start by saying that I am quite fond of Joe Terranova. On Wednesday I wrote about this as it relates to Joe’s confident presentation and view (“talking his book”) that large-cap tech is resuming its momentum.
As for me, I am often wrong and always in doubt.
From yesterday:
My Comment of the Day
Dougie Kass
I couldn’t disagree more with Joe Terranova on Halftime now (I am not posting on Twitter!).
Though I am not high on large cap tech my disagreement is not that I don’t think AI related stocks will begin to outperform.
It is the degree of confidence/hubris that he is expressing in his view that the AI momentum trade will resume.
Position: None
BY Doug Kass · Oct 21, 2026, 12:25 PM EDT
Position: None
Key Earnings See Negative Reactions as Rotation Hits a Bump in the Road
SpaceX spent more, Tesla spent less, and Meta proved its spending works. The market is selling all three.
P&G and My Staples Plays
Procter & Gamble’s ($PG) beat will likely help collateral staples plays like PepsiCo ($PEP), Coca-Cola ($KO) and Kimberly-Clark ($KMB).
Position: Long PG (VS), KO (VS), KMB (VS)
Meta Beats, Raises… and Reverses
* Meta’s share price reversed hard last night and this morning…
As I forecast, Meta ($META) beat expectations and raised guidance. A share offering seems likely:
Guesswork Only
My instincts tell me META beats consensus and offers good guidance.
And then it announces a primary offering of stock…
Position: None
BY Doug Kass · Oct 21, 2026, 3:30 PM EDT
Ed Zitron responds skeptically to the release:
Position: None
My Comment of the Day (Part Deux)
* Calling an audible on Tesla short in light of the continuing decline…
Dougie Kass
I have covered most of the balance of my Tesla at $369.55 for a +$25 profit overnight.
Position: Short TSLA (VS)
Redbook Sales Remain Very Solid
Redbook sales* in the week of October 16th decelerated but remained very healthy at +9.7% y/y growth, after hitting +10.4% the prior week, which was the best since 2022, well above the 2025 average of +5.8% y/y.
*Redbook sales are same-store sales across a panel of large general-merchandise retailers, such as department stores, discount chains, apparel retailers, drugstores, and warehouse clubs.
Let’s Get Chai(er)!
Chief Administrative Law Judge Derek Julius’ cannabis decision was a singular victory for the industry (and rescheduling).
Here are some examples of responses from some learned cannabis observers:
I added to $MSOS and $MSOX on the news.
I will have more later on the space…
Position: Long MSOS common (VL) and calls (VS), MSOX (S)
BofA Sees Heavy Institutional Selling Last Week
BofA says their clients sold US equities last week (-$9.1B), led by institutions in their 10th-biggest selling week in BofA’s data since 2008.
October is typically institutions’ heaviest selling month as mutual funds harvest tax losses ahead of their 10/31 fiscal year-ends, and BofA says institutional single-stock sales this month, relative to market cap, are already the largest of any October in its data, with two weeks still to go.
Retail sold after two weeks of buying, and hedge funds for the first time in five weeks.
