Falling Knives: Stocks the Market Punishes

Falling Knives: The Stocks Nobody Wants to Touch

Novo Nordisk, Netflix, Diageo, PayPal, Telefónica, IBM, Adobe, Porsche, MicroStrategy, Grifols, Tencent, General Mills, Kraft Heinz, Verizon, Caesars, Oklo, Klarna, Accenture, HRB, Manpower, Kyndryl, Mobico, Gerresheimer, Eli Lilly. This list is not an index; it is a graveyard of expectations. A tightrope walking exercise in the stock market that has lasted 223 days and starts with an uncomfortable confession: "I don't believe anything." Novo Nordisk's plunge, losing 23% against Eli Lilly's tirzepatide at 25.5% in the CagriSema trial, is just the tip of the iceberg in a season where the market decided that rising prices are suspicious and falling ones are opportunities.

Novo Nordisk's Plunge and the Generic War

The Danish pharmaceutical company went from being the market darling to becoming the perfect example of what investors call a falling knife. CagriSema data, showing a 23% weight reduction versus tirzepatide's 25.5%, was enough for the market to sentence: the war is not between Novo and Lilly, but against generics. "It seems the war is not between Novo and Lilly but with generics," summarizes one of the forum's most trinc voices. The reading is relentless: if the star drug doesn't beat its direct competitor, the punishment is justified. And yet, Eli Lilly does not fall. The asymmetry is puzzling.

The Falling Knife List: From Diageo to Telefónica

Diageo has been on the canvas for months, years. "It has broken through strong buying interest at the 2019 lows, the 2016 lows, and now faces the 2009 lows," warns a technical analysis that leaves no room for doubt. The British spirits maker has become the canonical example of free-fall without apparent bottom. Telefónica, meanwhile, is the recurring joke: "No matter when you read this, it's Telefónica." The Spanish operator embodies the paradox of value that never takes off, trapped between debt and competition. PayPal, with 29% share buybacks and a P/E ratio under 10, is the contrarian bet: cheap, profitable, and with $6 billion in repurchases. "Even with flat growth, it makes money," argues the bullish thesis. Kyndryl, the IBM spin-off, appears as a "top company" in cybersecurity despite dragging along an "accounting mess" nobody fully explains.

Hardware Up, Software Down: The Thesis of the Year

One of the most repeated predictions points to structural divergence: "Hardware +5%, Software -5%. It will be the trend of the year." Launched on January 2, the statement has been fulfilled with uncomfortable precision. Micron eats Salesforce. Applied Materials crushes Adobe. Small-cap SaaS companies, those promising disruption but delivering losses, "half die in four years." The diagnosis is Darwinian: software that doesn't generate cash goes extinct, while hardware supporting AI infrastructure revalues. The NVIDIA paradox, the company that assembled graphics cards for gaming and now capitalizes more than Intel, AMD, Motorola, and Texas Instruments combined, is the example everyone cites but nobody fully explains. "GPUs were invented for gaming, yes. To render graphics faster," recalls a sector veteran. Chance, first with Bitcoin and then with AI, did the rest.

Janus Strategy: Buying When There Is Blood

The method attracting the most trinc is summarized by a participant with crystal clarity: "Monumental drops, volume increase, narrow ranges, and fundamentals. That is the ideal situation where risk is very low and potential is enormous." The recipe, attributed to major value managers, requires patience and guts. Caesars, with Carl Icahn lurking and 20% potential upside, is the case study: "Carl Icahn is around so it's very cheap and alone, probably returns to splash at 11. These people only buy very low, at knockdown prices." The warning is equally clear: "Any day you'll see a big red candle of 20%. And not to correct, but for good hits of 70%."

Next Monday: Gloves On and Wait

The final stretch of the debate is tinged with macro caution. "On Monday this will fill with falling knives, put on your gloves gentlemen," warns one of the most active participants. Technical reading invites no optimism: "The SP500 had already been struggling sideways for months, lacking strength to rise." With oil at $120 and airlines in the crosshairs, the question isn't if there will be a correction, but when and of what magnitude. "When it starts, and falls hard from 4, it goes to 3 and touches 2.5," they conclude about IAG. The consensus, if it exists, is that the market has entered a brutal selection phase where only those with cash or patience survive. How many knives must you catch before cutting yourself?