Blue Owl, Red light. How the ROAR Score made investors smarter than OWL stock bulls.
It's not about "right or wrong." It is about investing with a defensive mindset, not just "how much can I make".
You manage money for decades, and you tend to see things that make you go “ah, that again.” I’m talking about the notorious, but apparently still very relevant market cycle that repeats itself over and over again.
Good idea (private credit)
Solid businesses with talented people analyzing and investing in that idea
Liquidity-driven market makes everyone want to get a piece of the action
High yield is the “hook” to get retail investors to jump in with both feet
It works for a while, and the “BUY” ratings from Wall Street are ubiquitous
It goes too far, and many retail investors end up losing.
In this case, it was Blue Owl (OWL), though there are many others in the space. OWL is the second largest holding in ETF symbol BIZD, which owns a basket of “Business Development Companies (BDCs).
That cycle above is playing out as we speak. And ROAR was there to warn about it. Here’s its path the past 12 months, with the past 60 days shown above the price/ROAR Score line.
On the left side of that lower price line, we can see that the trouble signs started about a year ago. OWL was off its peak level, but still around $20 a share.
Blue Owl turns red. And the ROAR score did too.
Since that time, OWL has had fleeting rallies. But my concern is always the major trend. And that was down. Even if OWL had reversed course, the point of ROAR analysis, and why I worked with PiTrade to create this investor tool, is not to focus too much on this or anything else in the past.
It is to let investors and traders know they now have something different. ROAR is meant to be used as part of your investment analysis. The same way that a low P/E stock is not automatically a “buy.” ROAR, like P/E and other ratios and also technical indicators, is part of the puzzle.
In the case of OWL, and its broader industry, ROAR simply did its thing: it warned us that while return is always possible, the risk of going after it was high. And has been from $20 a year ago, to $11 now.
If ROAR can help avoid big loss, is it worth trying it for free?
Here’s where to find this new risk analysis and portfolio creation tool as well as my other work.
Where to find Rob on the Web
🏠 ETFYourself.com – My primary home for tactical research and personal portfolio moves.
🛠️ ROAR.PiTrade.com – The interactive research portal and portfolio construction tool.
PiTrade.com - Copy trade Rob’s model portfolios through this Robo Advisor
📈 Barchart.com – Read my weekly column on technical analysis and market primers.
🎓 Seeking Alpha – Home of the Sungarden Investment Club for live interactive sessions.