What does 'true bottom-fishing' really mean?

Continuing from yesterday. Yesterday, Waller’s speech triggered a rise in gold prices; today, the unexpectedly strong nonfarm payroll report caused gold to fall. Tomorrow, if Iran backs down, gold might surge again. Who controls these surface-level variables? Why can such variables influence prices? Through what transmission chain do they affect assets? Within this chain, is there a deeper, more fundamental element—one that cannot be arbitrarily altered by human intervention? Can I directly hold that element—or at least hold the asset closest to it? ① Non-arbitrarily alterable From the perspective of the stock market, the most immutable elements are physical assets such as ports, mines, and rivers. Put differently, if a listed company ceases to exist, a corresponding piece of the physical world disappears—making such assets irreplaceable and thus possessing the strongest degree of irreversibility. Regardless of who becomes U.S. president or how the elderly Fed officials draw their dot plots, my ports and mines remain where they are. A step up are monopolistic licenses—typical examples being financial-sector licenses—or companies that have established network effects, such as telecom operators. Also included are land and hydroelectric power stations. Further up are industries meeting essential demand, such as hog farming: large-scale human acquisition of animal protein relies heavily on livestock farming, and pork remains, for the foreseeable future, the largest source of animal protein. ② Resistance to disruption From an investment logic standpoint, these companies exhibit strong resistance to disruption. Fluctuations on the demand side mostly affect profitability—but the core foundations of the business remain largely unchanged. In fact, upon retrospective analysis, the optimal buying points for many companies often occur precisely when their foundational strengths remain intact—even though profits have hit rock bottom. ③ Attractive valuation Therefore, we must seek out companies whose fundamentals remain sound despite depressed share prices. The crux lies precisely in this undamaged foundation. Take a port operator as the simplest example: the listed company publishes core operational data monthly—including cargo throughput and container volume. We can simply use the sum of cargo throughput over the past 12 months to gauge the company’s operational capacity.

What does 'leverage' mean in the stock market?

Using individual stock options as an illustration: options inherently possess leverage, satisfying some investors’ desire to ‘achieve outsized returns with minimal capital.’ However, unlike margin trading, securities lending, or leveraged mutual funds, options leverage operates somewhat differently. With over-the-counter (OTC) individual stock options, investors need only pay a small premium to gain exposure to a much larger notional value of underlying stock. Fundamentally, both stock margin financing and OTC individual stock options involve leveraging—i.e., expanding available capital. Yet OTC individual stock options offer greater leverage and comparatively lower risk. The famous Archimedean quote—‘Give me a lever and I will move the Earth’—aptly captures the immense power of OTC stock option investing. The relationship between option premium and leverage ratio is not fixed; rather, it depends on the specific terms of the option contract and prevailing market conditions. The leverage ratio is calculated by comparing the option premium to the option’s notional value. As shown in the excerpted quotation table below: assuming a notional principal of RMB 1 million, a 3% option premium implies 25× leverage; a 5% premium corresponds to 20× leverage; and a 7% premium represents 15× leverage. Currently, option premiums for one-month stock options typically range between 3% and 20%, translating into leverage ratios generally spanning 10× to 33×. Leverage characteristics of options: For example: investing RMB 1 million directly in stocks yields RMB 100,000 profit if the stock rises 10%; whereas purchasing call options for RMB 100,000 yields the same RMB 100,000 profit if the underlying stock rises 10%—meaning the option itself appreciates by 100%, equivalent to 10× leverage. Finally, options serve as a lower-cost vehicle for leveraging. Regardless of the channel used to obtain leverage, investors invariably face interest-rate costs.

Orion (OEC) Stock Rebounds as Specialty Margins Revive Leveraged Thesis

Aug 7, 2026

Orion Engineered Carbons (OEC) stock rose 16% after Q2 2026 results showed recovering specialty carbon black margins and positive free cash flow. Despite leverage concerns, the rebound highlights potential stability amidst weak rubber demand.

Sahm

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Orion S.A. Receives Consensus "Strong Sell" Rating from Brokerages

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