To The Moon

The $S&P 500(.SPX)$ just notched a fresh record. $NVIDIA(NVDA)$ and $Micron Technology(MU)$ are tagging new highs.

Your first instinct? 'Too late,' 'wait for the dip,' or 'it can't go higher.'

Here's the counterintuitive truth backed by 20 years of data: new highs are not a ceiling—they're a signal. A landmark study from The Journal of Finance shows stocks near their 52-week highs tend to keep outperforming, while 'bargains' far from their highs often keep lagging.

If you're hesitating to buy strength right now, this read is for you. 👇

🔗 Don't Fear the 52-Week High — Julian Klymochko"

📌 Key Insights

• Stocks near their 52-week highs tend to keep outperforming; those far from highs tend to keep lagging

• Academic research (George & Hwang, 2004) proves the 52-week high factor delivers 1.06% monthly alpha (ex-January), crushing traditional momentum

• Accelerate's 20-year live data: Top quintile near highs returned 10.0% annualized vs. 1.9% for the bottom quintile

• Why it works: Behavioral anchoring causes investors to underreact to good news near highs, creating gradual price adjustment—and alpha for those who aren't afraid

🧠 The Psychology: 3 Mental Traps Keeping You on the Sidelines

💡 Key Insight: The hardest stocks to buy are often the ones the market is telling you are working.

📊 The Academic Evidence

George & Hwang (2004), The Journal of Finance:

Key Takeaway: Proximity to the 52-week high dominates and improves upon traditional momentum signals. Future returns forecasted by the 52-week high do not reverse in the long run.

🔬 The Behavioral Explanation

When positive news hits:

• Retail investors see the stock near its 52-week high and think "too expensive"

• Result: Underreaction to good news, causing gradual—not immediate—price adjustment

• Your Edge: This slow adjustment creates a sustained momentum window

Translation: Other people's fear of heights is your source of alpha.

📈 Live Data: Accelerate (2006–Present, North America)

💼 Practical Application: How to Use This

✅ Long Candidates

• Look for: Improving fundamentals + price near/breaking 52-week highs

• Focus on: Trend sectors (AI infrastructure, cloud) with reasonable valuations

• Example: Dell Technologies (DELL) — AlphaRank 100/100

  • Not just a PC company anymore—key "picks and shovels" player for AI infrastructure

  • ISG segment booming on GPU server demand

  • Trades at 11.1x EBITDA, 57.4% return on capital

  • Reduced shares outstanding by 6.3% over past year

❌ Short/Avoid Candidates

• Avoid: Deteriorating fundamentals + persistent weakness far from highs

• Watch for: Cyclical downturns, negative guidance, rising debt

• Example: Algoma Steel (ASTL) — AlphaRank 0.1/100

  • Highly cyclical Canadian steel producer

  • Negative EBITDA guidance, lower shipments, tariff costs, rising debt

  • Classic "cheap for a reason" value trap

⚠️ Risk Notes

📝 One-Liner for Investors

"Waiting for a pullback" might be the four most expensive words in investing.
When fundamentals are improving and the market is voting with its wallet, a 52-week high isn't a ceiling—it's a confirmation signal. The data doesn't lie: over the past 20 years, buying strength has beaten buying weakness by 8 percentage points in annualized returns.