The trading quirk fundies are exploiting to profit from CBA's gravity-defying rise
WAM's Matthew Haupt says he has "never seen anything like this before", with CBA shares exhibiting an unusual pattern almost every trading session.
It is the bank stock that keeps defying gravity but as short sellers circle on Commonwealth Bank, one Australian fund manager has found a way to reliably print money on the stock almost every day.
Wilson Asset Management lead portfolio manager Matthew Haupt said while CBA's $240 billion valuation is "nuts", the daily price action is so reliable that the fund has found a way to keep pulling hundreds of thousands of dollars out of it every session.
"So what happens is it opens and then from around 10:30 [or] 11 o'clock it just goes on this 45 degree path [up] for the whole day," Haupt told an investor audience at the Livewire Live conference in Sydney on Tuesday.
As the stock heads into the match, 30% of volume – and sometimes as much as 40% – get traded, according to Haupt, often adding $1.5 billion to the company's swollen market cap as superannuation and passive index funds buy on the close.
