According to Luke Lango, the investing landscape has undergone a significant transformation, entering a new regime where volatility is the norm, shaped largely by algorithms and high-frequency trading. Approximately 70% to 90% of daily U.S. equity volume is driven by automated trading, with recent market dynamics highlighting an alarming disconnect between stock prices and fundamentals.
Historically, the average holding period for stocks plummeted from around eight years in the 1950s to just five months today. As a result, traditional investing strategies may no longer suffice, with investors facing rapid market fluctuations and the need to adapt swiftly to maintain competitive advantage.
Lango emphasizes the importance of identifying stocks in “Stage 2,” which signifies a breakout and sustained advance. This stage has the potential for significant returns, as evidenced by stocks like Palantir Technologies and Carvana, which have experienced massive gains following their respective breakouts.
