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Can You Predict the Future of Predictive Markets?

by Fred Fuld III

In 2026, the world of prediction markets has moved from the fringes of the internet to the center of global finance.These platforms are essentially information exchanges where users buy and sell contracts on the likelihood of real-world outcomes. If you think a candidate will win an election or a tech giant will hit its earnings target, you buy a “Yes” contract. If the event happens, the contract pays out; if it doesn’t, it expires worthless.

The beauty of these markets is their accuracy. Because participants have “skin in the game,” the price of a contract serves as a real-time, crowd-sourced probability that often outperforms traditional polling and expert analysis.

Here is a breakdown of the primary prediction market platforms available today.

1. Kalshi

The Regulated Heavyweight Kalshi is currently the dominant player in the U.S. market. It operates as a federally regulated exchange overseen by the Commodity Futures Trading Commission (CFTC). This regulation allows it to offer a high degree of trust and seamless integration with U.S. bank accounts.

Availability to US Citizens: Fully Available. Kalshi is a U.S.-based company and is legal for residents in most states (though some states like Massachusetts and New Jersey have recently challenged or geofenced specific sports markets).
Event Types: Known for “macro” events. You can bet on Federal Reserve interest rate hikes, inflation data, Box Office totals, Rotten Tomatoes scores, and—most famously—elections. In late 2025, they expanded significantly into sports event contracts (e.g., NFL, NBA).

2. Polymarket

The Crypto Giant Polymarket is the world’s largest decentralized prediction market. Built on the Polygon blockchain, it uses the USDC stablecoin for all transactions. After being restricted in the U.S. for several years, it began a regulated comeback via a new legal framework in late 2025.

Availability to US Citizens: Limited / Phased Rollout. As of February 2026, Polymarket is returning to the U.S. through a regulated channel. While many U.S. users are still on waitlists, the platform is increasingly accessible compared to its previous “offshore-only” status.
Event Types: Unrivaled variety. Polymarket covers everything from global geopolitical conflicts and crypto price movements to pop culture “memes” and scientific breakthroughs. If it’s being talked about on the internet, there is likely a market for it on Polymarket.

3. PredictIt

The Political Laboratory PredictIt is a project of Victoria University of Wellington and serves primarily as an educational and research tool. Because it operates under a “no-action” letter from the CFTC (though this has been the subject of intense legal battles), it has strict limits on how much a single person can invest.

Availability to US Citizens: Fully Available. It is specifically designed for the U.S. market, though it has a $3,500 position limit per contract to keep it focused on research rather than institutional speculation.
Event Types: Politics only. PredictIt does not offer sports or weather. It focuses exclusively on U.S. elections, Supreme Court rulings, and legislative outcomes.

4. Robinhood (HOOD) & Interactive Brokers (IBKR) [ForecastEx]

The Traditional Entrants In the last year, major traditional brokerages have entered the fray. Robinhood now offers election and event contracts directly in its app, often routing orders through Kalshi’s infrastructure. Interactive Brokers launched ForecastEx, a dedicated exchange for economic and climate-related predictions.

Availability to US Citizens: Fully Available. These are standard U.S. financial institutions.
Event Types: Mostly focused on “serious” data: Economic indicators (CPI, unemployment), climate data (global temperature averages), and major political milestones.

While prediction markets are powerful forecasting tools, they are not “safe” investments like savings accounts. Because they are binary (paying out either $1 or $0), they carry unique risks that combine the volatility of tech stocks with the “all-or-nothing” nature of sports betting.

As of early 2026, these are the primary risks you face when trading these markets:

1. Regulatory & Legal Risk

The “legal status” of these platforms is a moving target. Even if a platform is federally regulated, state-level challenges remain a major hurdle.

State-Level Shutdowns: In early 2026, several states (including New Jersey and Maryland) issued cease-and-desist letters to platforms, claiming they bypass state gambling laws. You could find your account geofenced or restricted with little notice.
Tax Uncertainty: The IRS has not yet issued formal guidance on whether prediction market gains are “capital gains” or “gambling winnings.” This could lead to unexpected tax liabilities or penalties if you misreport your earnings.

2. Insider Trading & Information Asymmetry

Unlike the stock market, where insider trading is a strictly enforced crime, prediction markets often rely on insiders to move the price toward the “truth.”

The “Whale” Effect: Large traders with deep pockets or non-public information (e.g., a political staffer who knows a bill will fail) can move the price before you have a chance to react.
Enforcement Risk: On February 5, 2026, federal prosecutors in New York signaled they would begin charging traders who use “material non-public information” with wire fraud, moving toward a stricter enforcement era.

3. Liquidity & Execution Risk

Liquidity refers to how easily you can enter or exit a trade without significantly changing the price.

The “Exit” Problem: In “thin” markets (low volume), you might buy a contract at $0.60, but when you want to sell, the best buyer is only offering $0.50—even if no news has changed.
Slippage: If you try to place a large bet on a niche topic (like a specific scientific discovery), your own buy order might push the price from $0.30 to $0.45, instantly destroying your potential profit margin.

4. Platform & Technical Risk

Because many of these platforms use “Web3” or hybrid infrastructure, they face unique technical vulnerabilities.

Oracle Failure: A “Yes” or “No” payout depends on an Oracle (the data source that confirms the outcome). If an Oracle is hacked or provides ambiguous data, your funds could be locked in a dispute for months.
Account Security: In late 2025, a major breach of a third-party authentication provider highlighted that even if the “blockchain” is safe, the login screen might not be.

5. Manipulation & “Noise”

Prediction markets can be susceptible to intentional distortion.

Wash Trading: Some participants may trade back and forth with themselves to create the illusion of high volume and interest.
Propaganda Bets: Political campaigns or wealthy donors have been known to place massive bets to make their candidate look more likely to win in the media, creating a “narrative” that isn’t backed by actual data.

Keep these risks in mind before dipping your toe into predictive markets.

Disclosure: Author didn’t own any of the above stocks at the time the article was written. No recommendation are expressed or implied.

Is Stock Market Margin Debt Too High? Will It Case a Crash?

by Fred Fuld III

You may think that investors use a lot less margin debt than in the past because of the increase in the use of put options to play the downside of stocks and ETFs.

However, margin debt has grown from $701 billion to $1.23 trillion since 2023.

Margin debt as a percentage of market cap of the stock market has gone from 1.6% to 2.3% $1.23 trillion over the last three years.

Tracking margin debt as a percentage of market capitalization is a classic “canary in the coal mine” for market analysts. Because the NYSE and NASDAQ combined represent nearly the entire US equity market, researchers often use the Wilshire 5000 or the S&P 500 as a proxy for total market cap.

Historically, FINRA (which took over reporting from the NYSE in 2008) provides the most reliable data starting from 1997. Below is a reconstructed table showing the approximate margin debt as a percentage of total US market capitalization (proxied by the Wilshire 5000 or S&P 500) over the last 30 years.

Historical Margin Debt vs. Market Capitalization (1996–2026)

Year	Approx. Margin Debt ($B)	% of Market Cap	Market Context
1996	~$100	1.1%	Pre-Dot-com buildup
2000	$278	2.6%	Dot-com Bubble Peak
2002	$130	1.3%	Post-bubble bottom
2007	$381	2.5%	Pre-GFC Housing Peak
2009	$173	1.6%	Post-GFC bottom
2014	$465	2.1%	Steady recovery
2018	$554	2.3%	Trade war volatility
2021	$935	2.0%	Post-COVID Peak
2023	$701	1.6%	Interest rate hike cooling
2024	$899	1.8%	AI-driven rally
2025	$1,225	2.2%	New Nominal Record
2026*	$1,230+	2.3%	Current cycle highs

*Data through early 2026 based on recent FINRA January reports.

Key Observations

The 3% Ceiling: Historically, margin debt rarely exceeds 3% of the total market capitalization. When the ratio approaches or exceeds 2.5%, it is often viewed as a “yellow flag” indicating over-leverage and high speculative fervor.
Nominal vs. Relative Peaks: While the current 2026 nominal debt is at an all-time high (exceeding $1.2 trillion), the percentage of market cap is still lower than it was at the peak of the 2000 and 2007 bubbles because the total market value has grown even faster.
Forced Liquidation: The danger of high margin debt isn’t the borrowing itself, but the “feedback loop” it creates during a downturn. As stock prices fall, margin calls trigger forced selling, which further lowers prices and triggers more margin calls.

Disclosure: No investment recommendations are expressed or implied.

Do Companies that Pay Their CEOs One Dollar a Year Perform Better?

by Fred Fuld III

While the “one-dollar CEO” was once a popular trend among Silicon Valley elite (like Larry Page and Mark Zuckerberg), it has become a rarer breed in the 2020s. Most CEOs who famously took $1 salaries have either stepped down or shifted their compensation structures.

Steve Jobs is often credited with popularizing the modern “$1 CEO” trend. After rejoining Apple in 1997, he famously took a $1 annual salary for 14 years until his resignation in 2011.

While his salary was a single dollar, his performance—and the stock’s performance—was anything but nominal.

Apple’s Performance Under the $1 Salary (1997–2011)

When Jobs returned, Apple was weeks away from bankruptcy and trading at split-adjusted prices that are today measured in pennies. By the time he stepped down, he had transformed it into the most valuable company in the world.

Stock Growth: Apple’s stock (AAPL) grew by approximately 6,700% during his tenure.
vs. S&P 500: During that same period, the S&P 500 returned roughly 4.5% per year (heavily suppressed by the Dot-com bubble burst and the 2008 Financial Crisis). Apple averaged a staggering 33.6% annual return.
Revenue: Apple’s annual revenue exploded from $7.1 billion in 1997 to $108.2 billion in 2011.

Was he actually only making $1?

While the salary was symbolic, Jobs was compensated in other massive ways that aligned his wealth with the company’s success:

Massive Stock Ownership: Jobs held about 5.5 million shares of Apple. He didn’t sell a single share between 1997 and 2011, meaning his “paycheck” was effectively the billions of dollars in value added to his holdings.
The “Bonus” Jet: In 1999, Apple’s board gave him a $90 million Gulfstream V private jet and reimbursed him for all expenses related to it.
Disney Stock: Jobs was also the largest individual shareholder of Disney (following the sale of Pixar), which paid him millions in dividends annually—far more than any CEO salary could.

The Verdict on the $1 Salary

Jobs is the ultimate success story for this model because his $1 salary signaled a “sink or swim with the shareholders” mentality. He took the dollar when the company was failing to prove his commitment, and he kept it when the company was winning to show that his motivation was the product, not the cash.

Most modern CEOs who try this (as seen in the 2025 performance data) haven’t quite managed to replicate that “Jobs Magic” in terms of raw market outperformance.

However, a few notable examples still exist or have recently committed to this path. Here is how they and their stocks have fared over the last year (ending early 2026) compared to the S&P 500, which returned approximately 16.3% in 2025.

The $1 CEO Club: Performance vs. S&P 500

Company	CEO	2025 Stock Performance	vs. S&P 500 (+16.3%)
Tesla (TSLA)	Elon Musk	+19%	Outperformed
Airbnb (ABNB)	Brian Chesky	~ -5%	Underperformed
Yelp (YELP)	Jeremy Stoppelman	-32%	Underperformed
Gloo (GLOO)	Scott Beck	N/A (New for 2026)	N/A

Key Company Breakdowns

Tesla (TSLA): Elon Musk remains the most famous member of this group. While his base salary is $0 (or the California minimum wage, which he does not accept), his actual compensation is tied to massive performance-based stock options. In 2025, Tesla’s stock was a roller coaster—dropping significantly in Q1 before rallying on the launch of its robotaxi network to end the year up 19%, slightly beating the broader market.
Yelp (YELP): Jeremy Stoppelman has maintained a $1 salary for years. Unfortunately for shareholders, 2025 was a difficult year for Yelp. Despite high gross margins, the stock tumbled 32% over the last year as it struggled with slower customer spending and a transition toward AI-driven local commerce services.
Airbnb (ABNB): Brian Chesky famously reduced his salary to $1 during the pandemic. While he receives other forms of compensation (like security and travel), his base remains nominal. The stock saw modest volatility in 2025, ending the year down roughly 5% as the travel sector normalized after the post-pandemic boom.
Gloo (GLOO): A newer entry to the list, Gloo announced that its CEO Scott Beck would slash his salary to $1 starting in February 2026 to signal confidence in the company’s “faith-tech” platform despite recent net losses.

Is the “$1 Salary” a Good Sign for Investors?

The data suggests that a $1 salary is not a guarantee of stock success. While it aligns the CEO’s wealth with shareholders, it often indicates that the executive is already a billionaire (like Musk or Chesky) or that the company is going through a “turnaround” phase where cash preservation is critical. In 2025, the $1 CEO group largely underperformed the S&P 500, with Tesla being the lone standout.

Disclosure: Author owns AAPL and TSLA. No investment recommendations are expressed or implied.

Stocks Going Ex Dividend in February 2026

The following is a short list of some of the many stocks going ex-dividend during the next month, which can be helpful for traders and investors interested in the stock trading technique known as “Buying Dividends” or “Dividend Capture.” This strategy involves purchasing stocks before the ex dividend date and selling them shortly after the ex-date at a similar price, while still being eligible to receive the dividend payment.

Although this dividend capture strategy generally proves effective in bull markets and flat or choppy markets, it is advisable to exercise caution and consider avoiding this strategy during bear markets. To qualify for the dividend, it is necessary to buy the stock before the ex-dividend date and refrain from selling it until on or after the ex-date.

However, it is important to note that the actual dividend may not be paid for several weeks, as the payment date may not be until two months after the ex-dividend date.

For investors seeking a comprehensive list of stocks going ex-dividend in the near future, WallStreetNewsNetwork.com has compiled a downloadable list containing numerous dividend-paying companies. Here are a few examples showcasing the stock symbol, ex-dividend date, periodic dividend amount, and annual yield.

Five Star Bancorp (FSBC)	2/2/2026	0.25	2.53%
Papa John’s International, Inc (PZZA)	2/9/2026	0.46	5.23%
Starbucks Corporation (SBUX)	2/13/2026	0.62	2.64%
Amgen Inc. (AMGN)	2/13/2026	2.52	2.82%
Microsoft Corporation (MSFT)	2/19/2026	0.91	0.85%
T-Mobile US, Inc. (TMUS)	2/27/2026	1.02	2.16%

To access the entire list of over 100 ex-dividend stocks, subscribers will receive an email in the next couple days with the full list. If you are not already a subscriber, you can sign up using the provided signup box below. Don’t miss out on this valuable information, and the best part is that it’s free!

Dividend Definitions

To better understand the dividend-related terms, let’s define them:

Declaration date: This refers to the day when a company announces its intention to distribute a dividend in the future.
Ex-dividend date: On this day, if you purchase the stock, you would not be eligible to receive the upcoming dividend. It is also the first day on which a shareholder can sell their shares and still receive the dividend.
Record date: This marks the day when you must be recorded on the company’s books as a shareholder to qualify for the dividend. Typically, the ex-dividend date is set two business days prior to the record date.
Payment date: This is the day on which the dividend payment is actually made to the eligible shareholders. It’s important to note that the payment date can be as long as two months after the ex-date.

Before implementing the “Buying Dividends” technique, it is crucial to reconfirm the ex-dividend date with the respective company to ensure accuracy and avoid any unexpected changes.

In conclusion, being aware of the stocks going ex-dividend can be advantageous for traders and investors employing the “Buying Dividends” strategy. WallStreetNewsNetwork.com provides a convenient resource to access a comprehensive list of such stocks, allowing individuals to plan their investment decisions effectively. Remember to stay informed and consider market conditions before employing any investment strategy.

Disclosure: Author may have positions in some of the above at the time the article was written. No investment recommendations are expressed or implied.

Insider Buying: A Smart Investment Strategy

by Fred Fuld III

When investors look for a “buy” signal, they often turn to the people who know the company best: its own executives and board members. While analysts look at balance sheets from the outside, insiders see the daily operations, upcoming contracts, and cultural shifts that won’t hit a public report for months.

As legendary fund manager Peter Lynch famously noted: “Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.”

The Advantages of Following “Skin in the Game”

Buying stocks with strong insider activity offers several distinct strategic benefits:

Asymmetric Information: Insiders have an “information advantage.” They understand the nuances of their industry’s cycle and can identify when the market has overreacted to temporary bad news.
Alignment of Interests: When a CEO buys a significant amount of stock with their own cash, their personal wealth becomes tied to the stock price. This aligns their incentives with those of retail shareholders.
Signaling Undervaluation: Heavy insider buying often occurs when a stock is “beaten down.” It serves as a loud signal from management that they believe the current market price does not reflect the company’s intrinsic value.
Predictive Power in Small Caps: Historical data suggests that insider buying is particularly predictive in small-cap and mid-cap stocks, where fewer Wall Street analysts are providing coverage.

Companies with Recent Strong Insider Activity

Here are four companies that have seen notable insider conviction as of early 2026.

Asbury Automotive (ABG)

Asbury Automotive is one of the largest automotive retailers in the United States, operating a vast network of dealerships and service centers. With a market cap of approximately $4.81 billion, the company currently trades at a relatively low P/E ratio of 8.63. While Asbury does not pay a regular dividend, it has been aggressive in its share repurchase programs.

Recent Activity: Over the last 12 months, the company has seen notable conviction from institutional insiders, including a massive purchase of roughly $10.6 million (46,952 shares) by Abrams Capital Management. While there has been some selling by officers for tax and compensation purposes (roughly 22,000 shares in the last year), the net volume of shares bought on the open market remains significantly higher than those sold.

Anterix (ATEX)

Anterix is a specialized telecommunications company focused on providing private LTE network solutions, particularly for the utility sector. It has a market cap of roughly $475 million and a P/E ratio of 5.11. The company currently does not offer a dividend.

Recent Activity: Insider sentiment at Anterix has been overwhelmingly positive. In late 2025, CEO Scott Lang made multiple open-market purchases totaling over $170,000. Overall, in the most recent 100 recorded trades, insiders have purchased roughly 2.44 million shares compared to only 307,000 shares sold, indicating a heavy bias toward the “buy” side as the company hits new operational milestones.

Universal Safety (UUU)

Universal Safety Products is a micro-cap player in the safety technology space, known for its smoke and carbon monoxide detection systems. The company has a market cap of $11.5 million and trades at a very low P/E ratio of 4.0. In late 2025, the company made headlines by paying a significant one-time special dividend of $1.00 per share following a successful asset sale.

Recent Activity: Director Milton Ault III has been on a buying spree throughout the end of 2025. In December alone, he executed nearly a dozen separate purchases, totaling hundreds of thousands of dollars. Within the last three months, insiders have bought over 108,000 shares while recording zero sales, a rare “clean” signal of management confidence.

WW International (WW)

Commonly known as WeightWatchers, WW International is currently navigating a major business pivot toward the clinical weight-loss and GLP-1 medication space. It has a market cap of approximately $236 million. Its P/E ratio has been volatile due to recent losses but is currently projected at roughly 13.0 for future earnings. The company does not currently pay a dividend.

Recent Activity: Despite a challenging stock price environment, insiders are stepping in. Director Carney Hawks recently purchased 29,057 shares at an average price of $22.14, a total investment of over $643,000. This purchase significantly outweighed the minor selling of 469 shares by the company’s controller during the same period, suggesting that the board sees a disconnect between the current price and the company’s long-term pivot.

The Verdict on Insider Signals

When you look at the raw numbers, a pattern emerges: for these four companies, the volume of shares being purchased by insiders significantly exceeds the volume being sold. In the case of Universal Safety, the signal is a “unanimous” buy with zero selling. For Anterix and WW International, the sheer dollar amount of the recent buys suggests that leadership is willing to back their turnaround strategies with their own personal wealth.

Disclosure: Author didn’t own any of the above at the time the article was written. No recommendations are expressed or implied.

January Bounce Follow-up

by Fred Fuld III

Last month, I came up with a list of half a dozen stocks that might benefit from the January Effect.

The January Effect is the historical tendency for stock prices, especially small-cap stocks, to rise in the first month of the new year due to depressed prices from heavy selling in the previous month of December.

The selling is due to investors wanting to take tax losses before the end of the year.

The stocks I came up with had the following criteria:

• Stocks down over 75% for the year
• Selling below book value
• Selling below cash per share
• Market caps above $65 million
• US based

The list below show shows the company name, the stock symbol, and the industry:

Atyr Pharma	ATYR	Biotech
Korro Bio	KRRO	Biotech
New Fortress Energy	NFE	Oil & Gas
Pliant Therapeutics	PLRX	Biotech
Vivid Seats	SEAT	Internet
Teads Holding	TEAD	Internet

Finally, the results below shows what would happen if you had sold the stocks on January 5, the first trading day after New Year’s week, or January 9, if you had waited until the end of that first full week of the year to sell:

	12/16/25	01/05/26	% incr.	01/09/26	% incr.
Atyr Pharma	0.73	0.75	2.74%	0.73	0.00%
Korro Bio	7.78	7.91	1.67%	9.42	21.08%
New Fortress Energy	1.08	1.14	5.56%	1.18	9.26%
Pliant Therapeutics	1.23	1.25	1.63%	1.35	9.76%
Vivid Seats	6.49	7.33	12.94%	6.96	7.24%
Teads Holding	0.66	0.68	3.03%	0.63	-4.55%
AVERAGE % INCR.			4.59%		7.13%

Not too bad a return for a three to four week holding.

Disclosure: Author didn’t own and doesn’t own any of the above. No investment recommendations are expressed or implied.

Stocks Going Ex Dividend in January of 2026

However, it is important to note that the actual dividend may not be paid for several weeks, as the payment date may not be until two months after the ex-dividend date.

Cisco Systems, Inc. (CSCO)	1/2/2026	0.41	2.10%
Morningstar, Inc. (MORN)	1/2/2026	0.50	0.92%
Keurig Dr Pepper Inc. (KDP)	1/2/2026	0.23	3.30%
Intuit Inc. (INTU)	1/9/2026	1.20	0.66%
Phillips Edison & Company, Inc. (PECO)	1/15/2026	0.1083	3.65%
Horizon Technology Finance Corporation (HRZN)	1/16/2026	0.11	20.92%
Scholastic Corporation (SCHL)	1/30/2026	0.20	2.77%

Dividend Definitions

To better understand the dividend-related terms, let’s define them:

Before implementing the “Buying Dividends” technique, it is crucial to reconfirm the ex-dividend date with the respective company to ensure accuracy and avoid any unexpected changes.

Disclosure: Author may have positions in some of the above at the time the article was written. No investment recommendations are expressed or implied.

Top Financial Scam Books for the Holidays

If you are looking for some great reading for the holidays, or maybe a great gift for your investor friends and relatives, here are some books on financial scams that are well worth reading. Many of these came out a few years go, but are timeless. Enjoy!

American Kingpin: The Epic Hunt for the Criminal Mastermind Behind the Silk Road by Nick Bilton
You have probably heard of the Silk Road but do you know anything about the guy behind it? How he started it, how it grew beyond his or anyone’s wildest dreams, and how money and power can corrupt. It also corrupted some members of law enforcement. An amazing story and a book that reads like a page-turner mystery.

Billion Dollar Whale: The Man Who Fooled Wall Street, Hollywood, and the World by Tom Wright & Bradley Hope
If you have seen the Wolf of Wall Street movie, but you don’t know where the money came from to make the movie, you need to read this book! How billions were swindled with the help of a major investment banking company. The parties were unbelievable, and included such guests as Leonardo DiCaprio and Paris Hilton. The jewelry was unbelievable. The yachts were unbelievable.

Alligator Blood by James Leighton
An Australian in his 20s goes from delivering pizzas to becoming one of the richest people in Australia from online poker. What happens next …

Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice by Bill Browder
A timely book these days. How the author made a huge amount of money trading Russian shares, and the dark consequences of doing so.

Black Edge: Inside Information, Dirty Money, and the Quest to Bring Down the Most Wanted Man on Wall Street by Sheelah Kolhatkar
About, Steve Cohen, SAC Capital, insider trading, government investigators, and billions of dollars in profits.

The Buy Side: A Wall Street Trader’s Tale of Spectacular Excess by Turney Duff
Autobiographical story of sex, drugs, hedge funds, and lots of money.

The Spider Network: How a Math Genius and a Gang of Scheming Bankers Pulled Off One of the Greatest Scams in History by David Enrich
Have not read this yet, but it’s on my next non-fiction book to read. 4.5 stars on Amazon.

Happy reading!

This page contains affiliate links.

6 Interesting Tax Selling Stocks for a Possible January Bounce

by Fred Fuld III

One long-standing seasonal investment approach is the strategy of buying stocks near year end that have fallen sharply over the prior twelve months and have been pushed even lower by tax-motivated selling. This tactic is rooted in the observation that many investors sell losing positions in November and December to realize capital losses, either to offset gains elsewhere in their portfolios or to reduce taxable income. The resulting wave of selling pressure can temporarily drive prices below levels justified by a company’s underlying fundamentals.

As the calendar year draws to a close, this tax-loss selling can become somewhat mechanical. Portfolio managers and individual investors alike may sell simply because the stock is down, not because new negative information has emerged. In smaller or less liquid stocks, this effect can be especially pronounced, with prices sagging into the final weeks of December as sellers overwhelm a limited pool of buyers. For contrarian investors, these conditions can create opportunities to purchase shares at depressed prices.

The thesis behind the strategy hinges on what is often referred to as the “January effect.” Once the new year begins, the incentive to sell for tax reasons disappears, and in some cases investors even buy back stocks they sold weeks earlier. At the same time, fresh capital flows into the market in January from year-end bonuses, retirement account contributions, and new allocations by institutions. This shift in supply and demand can lead to a rebound in stocks that were heavily sold in December, producing short-term gains for investors who bought during the year-end slump.

However, not every beaten-down stock is a good candidate for a January bounce. The most promising situations are often companies that are down substantially for cyclical or temporary reasons rather than due to permanent impairment of the business. Distinguishing between stocks that are merely unpopular and those that are fundamentally broken is critical. Investors who apply this strategy typically look for balance sheet strength, ongoing profitability, or clear catalysts that could improve sentiment once selling pressure eases.

Risk management is an essential part of this approach. Because the strategy is partly based on market behavior rather than long-term fundamentals, the anticipated bounce may be modest or may not occur at all. Broader market conditions, unexpected news, or continued deterioration in a company’s prospects can overwhelm any seasonal effect. As a result, many practitioners treat year-end tax-loss buying as a tactical, short-term trade rather than a buy-and-hold investment.

There are six stocks are interesting possibilities for a January bounce. They all have the same characteristics, as follows:

• Stocks down over 75% this year
• Selling below book value
• Selling below cash per share
• Market caps above $65 million
• US based

The list below show shows the company name, the stock symbol, and the industry:

Atyr Pharma	ATYR	Biotech
Korro Bio	KRRO	Biotech
New Fortress Energy	NFE	Oil & Gas
Pliant Therapeutics	PLRX	Biotech
Vivid Seats	SEAT	Internet
Teads Holding	TEAD	Internet

In summary, buying stocks near year end that are deeply down and further depressed by tax-loss selling is a contrarian strategy that seeks to exploit temporary price distortions. When successful, it can benefit from the easing of selling pressure and renewed demand in January. Like all market strategies, it requires discipline, careful stock selection, and an understanding that seasonal patterns are tendencies, not guarantees.

Disclosure: Author didn’t own any of the above at the time the article was written. No recommendations are expressed or implied.

Stocks Going Ex Dividend in December 2025

However, it is important to note that the actual dividend may not be paid for several weeks, as the payment date may not be until two months after the ex-dividend date.

Wendy’s Company (The) (WEN)	12/1/2025	0.14	6.63%
NVIDIA Corporation (NVDA)	12/4/2025	0.01	0.02%
QUALCOMM Incorporated (QCOM)	12/4/2025	0.89	2.12%
Alphabet Inc. Class C Capital Stock (GOOG)	12/8/2025	0.21	0.26%
Phillips Edison & Company, Inc. (PECO)	12/15/2025	0.1083	3.66%
Horizon Technology Finance Corporation (HRZN)	12/17/2025	0.11	19.76%
Xerox Holdings Corporation (XRX)	12/31/2025	0.025	3.60%

Dividend Definitions

To better understand the dividend-related terms, let’s define them:

Before implementing the “Buying Dividends” technique, it is crucial to reconfirm the ex-dividend date with the respective company to ensure accuracy and avoid any unexpected changes.

Disclosure: Author may have positions in some of the above at the time the article was written. No investment recommendations are expressed or implied.