The Magnificent 7 stocks (MSFT, NVDA, AAPL, AMZN, GOOG, META, AVGO) show unique long and short investor behavior. Investors allocate capital more evenly on a dollar basis, overweighting smaller stocks and underweighting larger ones. Short interest and investment advisor holdings are highly correlated with float percentage.

The seven stocks—MSFT, NVDA, AAPL, AMZN, GOOG, META, and AVGO—provide insights into both long and short exposures, with similar patterns observed across other segments of the market.

Key variables include the percentage of shares held by investment advisors, short interest as a percentage of float, and overall market capitalization.

The percentage owned by investment advisors is highly correlated with the float percentage, suggesting that investors may be shorting stocks held by these advisors or taking both long and short positions in the same names.

As a result, stocks can be ranked from “more interesting” to “less interesting,” appearing in both long and short categories.

Both long and short interest metrics are negatively correlated with size. In percentage terms, smaller-cap stocks receive relatively higher allocations, while larger-cap stocks receive less.

The dollar value of positions tends to fluctuate less than market capitalizations, indicating that investors allocate capital more evenly on a dollar basis rather than by market weight.

Long and short investors do not strictly follow a cap-weighted approach. Instead, they employ a strategy that lies between cap-weighting and equal-weighting—overweighting smaller stocks and underweighting larger ones.

The Magnificent 7 stocks reveal that long and short investors do not strictly follow a cap-weighted approach. Instead, they employ a strategy between cap-weighting and equal-weighting, overweighting smaller stocks and underweighting larger ones. Monitoring allocation strategies and short interest is crucial for informed investment decisions.

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