Excessive OptimismA quick post about Stelco. I have seen some accusations about Short Selling and market manipulation causing the stock to go down. While any stock may be sold short at any time, we are looking at a short interest of less than 2%. More likely reason is that Management stated they will ride the curve for HRC prices and would not hedge. All stocks are priced on future expectations. Look at West Fraser, if it was priced on the past 12 months' performance at its historical P/E ratio, it would be $300 and not 100. But we need to look past the recent supply chain issues and demand spike giving short time record profits and at the core business and future expectations. Stelco is operating in an industry why the companies are expanding supply. What we have seen is that while September and October are only 1 and 2% off the HRC highs, it looks like Q1 has dropped by 20% in the past two weeks. And we know that since MGMT will not hedge, this is straight revenue deterioration that will go to the bottom line. And this will impact Net Income by much more than 20%. It could have cut Q1 Net Income by 50% as Stelco does not breakeven until $750/ton. Last time we saw Q1 HRC prices this low was in May and June. The stock was trading at the same price then. Yes prices are still high but with them falling 20% in Q1 and Q2 just within the past two weeks, would anyone wager that they won't go any lower? BTW the other companies have also been hit - not to the same extent but they are also down 15-20%. The advantage they have is they are mostly US-based. Any instrastructure bill will first allocate money to US companies before opening it up to Canadian companies.