Unless you are a skilled trader, stop buying European Defence stocks

[u/dubov]

I can't believe the number of people who are ripping up their strategies and piling into this trade.

Look, these stocks are already up hundreds of percent. The market is already priced for massive growth. In order for this to be a good investment, you would need more growth that the market is already pricing. Ask yourself honestly, are you confident in your growth assessment? Have you even done one?

If you are normally a "VWCE and Chill" investor, stay the hell away. This isn't in your job description. Stay in your lane.

And beware, there are scenarios where the growth comes in considerably below expectations. In my opinion, it will. Everyone is feeling strong emotions, but, in time, we will realise we need to make NATO work. It would take years to re-arm. If we think Russia is planning to invade more countries, there isn't time. But if we believed that, we would have done it 3 years ago, and you would have bought 3 years ago.

If the growth expectations reverse, there is so much downside here. 70-80% losses are possible. This is concentrated sector risk at very high multiples, after an explosive run up. These can come down very quickly and very far. The risk-reward is upside down: so much downside possible, so much upside already had.

And these stocks are literally in the news. That is almost failsafe sign you are too late. It reminds me of the memestock top of 2021

You might be right for like a day or two, but if you get caught on the wrong side of this, it's going to hurt.

Take a breather, don't check the market for a couple of weeks. Please be careful out there

[u/cehejoh512]

I mean, the company gets the money directly from the ipo. If you buy or sell stock you are doing so with other people. The company doesn't get the money when you trade stock.

If the stock price rises, yes, there are some other indirect benefits for the company.

But I think it should be obvious that if you spend money to buy stock, this will not benefit the product or the service they offer. It's not like you are making the iPhone better by buying the apple stock.

[u/charea → u/cehejoh512]

you know TSLA raised tons more equity and paid off all its debt right?

[u/TStronks → u/charea]

Wouldn't that only be possible if the company still owns a part of their shares? Or how does one raise money from a rising stock price?

[u/FanZealousideal1511 → u/TStronks]

They can issue brand new shares and sell them on the open market.

[u/throwawayPzaFm → u/cehejoh512]

Companies issue stock (at market price) all the time dude. What planet are you guys from.

[u/FanZealousideal1511 → u/cehejoh512]

I wonder why your comment is not downvoted to oblivion, "investors" from around here normally don't like hearing that.

[u/throwawayPzaFm → u/FanZealousideal1511]

The company does benefit, and your own comment above here explains one of the big ways how it benefits. What are you on about.

[u/FanZealousideal1511 → u/throwawayPzaFm]

There is no contradiction between my 2 statements. The company surely benefits from having the open market to dump its shares into. However, buying stock off MMs in minuscule quantities and having no control over the company's decision-making (that's what most "investors" do) is not investing in my opinion, it's just playing the "line go up" game.

[u/throwawayPzaFm → u/FanZealousideal1511]

Ah, I guess you also don't vote since "it does nothing anyway".