# Stocks Everyone Hates: Jonathan Boyar on Buying What the Baskets Dumped

Source: Realpha Blog (blog.getrealpha.com)
Original article and charts: https://blog.getrealpha.com/en/blog/compound-2026-09-25-people-hate-these-5-stocks-but-they-ll-be-wrong-wi/

> Notes from the 2026-09-25 episode of The Compound and Friends. Value investor Jonathan Boyar on why only 23.2% of large caps beat the index over ten years, how AI-driven basket selling creates dislocations, and the line between a broken stock and a broken business. Educational, not investment advice; individual stocks carry risk.

Published: 2026-09-25
Locale: en
Tags: value investing, contrarian, US equities, market sentiment, podcast notes


![A long warehouse aisle at dusk, shelving receding into depth, one worker with a clipboard standing under a single shaft of skylight](/covers/compound-2026-09-25-people-hate-these-5-stocks-but-they-ll-be-wrong-wi-cover.png)

> The truly brave are those who, when something falls on them without warning, do not panic, and when they are wronged without cause, do not rage.
>
> —— Su Shi, "On the Marquis of Liu" (Northern Song, c. 1061; my translation)

On 25 September 2026, The Compound and Friends brought back Jonathan Boyar of the Boyar Value Group to talk about companies the market currently hates. The show cited Adam Parker's data: over the past ten years only 23.2% of large-cap US stocks beat the S&P 500, and over three years 27.7%, with the rate falling steadily since 2002. In the same year, Goldman Sachs' most-shorted basket rose 40% while a long-quality, short-junk book lost 23%. Boyar's read is that much of this year's damage came from mechanical basket selling rather than deteriorating businesses, so the opportunity sits in names where the stock broke and the business didn't. The condition: you have to tolerate three to five years of looking different from everyone else, and as he said himself, you can be right on the fundamentals and still watch the stock keep falling.

## What the episode covers

Stock picking is two generations of family business for Boyar. His father started in the 1970s, when the game was cigar butts — buy a declining business the market has punished past all reason and take the last puff. That world is gone, Boyar says, because the edge came from nobody owning a calculator and having to visit the New York Public Library for filings.

He was last on during the software selloff, when he was bullish on Salesforce; the company later partnered with Anthropic and the stock recovered. The hosts opened by teasing him about it, and he volunteered first that not everything worked. This time he brought a list called Fresh Looks: names from his 200-stock universe that deserve a second look. Fourteen so far this year, and the common thread is heavy multiple compression against a business that is fine to improving.

## The points worth keeping

**Buy and hold isn't a strategy on its own.** Boyar rejects the premise. Holding is the result of good stock picking, not the method. Buy a strong business at a reasonable price, then keep asking two questions: is management executing, and is the multiple still sane. His example is one Buffett admits to — not selling Coca-Cola at 60 times earnings in 1998, which then lagged the index for years. A great business and a great price are two separate tests.

**There just aren't many winners.** 23.2% over ten years, 27.7% over three, declining since 2002. The hosts' explanation lands for me: money flows to where it's treated best, and it's treated best by the strongest companies, so most stocks trailing the index is structural. To pick stocks in that world you need concentration and you need to survive ugly stretches. Boyar said he felt like a moron watching Microsoft fall from 579 earlier this year.

![Two horizontal bars, each filled less than one third of the way, show the share of large-cap stocks that beat the index: 27.7% over the past three years and 23.2% over the past ten; below them a line sloping down from upper left to lower right shows that this ratio has been falling for years.](/figures/beat-index-ratio-en.svg)

**Quality bailed out nobody in 2026.** McDonald's is down 29% from its February peak, and on return on equity it screens as a quality business. A drawdown like that last happened in the dot-com bust. Boyar gave a presentation earlier this year asking whether there was a quality bubble, with Cintas and Costco on the slides.

**A high starting multiple kills you from both sides.** Nike is the cleanest case: earnings down several years running while the multiple keeps derating, so the stock does worse than the fundamentals. The hosts described it as something you can't see coming until you're already inside it. Nike also wrecked its own distribution — telling Foot Locker to get lost, chasing direct-to-consumer through nike.com, opening an Amazon store then backing out. Boyar's position: you could make money from here, but there are easier ways.

**Basket trading produced the year's dumbest selling.** When AI assistants that cancel your subscriptions launched, Goldman's consumer-inertia basket got dumped wholesale. Planet Fitness, fine. The New York Times down 7.2% in a couple of days makes no sense — that's a loyal audience and a business that's on fire. Schwab was in the basket too, as if people forget they have brokerage accounts until an agent reminds them. Nobody is thinking, Boyar said; it's programmatic.

**Fund structure amplifies it.** Capital now flows to pods inside multi-strategy platforms, and those teams run on short leashes — down 5% and risk management tells you to cut exposure. So the people best placed to buy a dislocation are forced sellers instead. One host painted it: the trader says "should we take advantage of this?" and the risk manager says no, get flat now and start putting the photo of you and your daughter at the pool into a cardboard box.

![A large frame holds six blocks standing for one theme basket, with The New York Times and Schwab marked to show they do not belong there; below the frame a thick arrow points down, standing for the whole basket being sold at once.](/figures/basket-sell-pressure-en.svg)

**Businesses customers hate tend to punish shareholders.** Asked what he nearly bought and passed on, Boyar named StubHub, with the rule that you avoid businesses consumers hate. Then a host told the story: he listed playoff tickets on two platforms at once, both sold, he couldn't deliver, and he ate the cost. StubHub never told him — it let the same ticket sell seven times and billed him around $9,000. That isn't a bug, he said. It's a profit center.

![Beside a downward drawdown scale hang two vertical ropes: the one for multi-year capital runs all the way to the bottom, while the one for a platform pod snaps at minus five percent, and a dashed line below shows the price still falling.](/figures/short-leash-forced-seller-en.svg)

## Going further

### "I'm down 30%. Do I cut or hold?"

The line the episode draws is broken stock versus broken business, and the hard part is that both look identical — a chart going down. The separation lives elsewhere: in the company's own numbers. On Uber, Boyar noted guidance hasn't moved since January, growth is running 20–30%, free cash flow is heading toward the ten-billion mark, and the CEO and CFO have been buying stock personally. Price fell, business didn't.

Nike is the other side: several years of falling earnings, self-inflicted channel damage, stronger competitors than ever. Same downward line, one of them bleeding, the other just ignored. When I ran my own holdings through this, the uncomfortable part was finding names where I could describe the price action but not one thing that changed in the operations — which means I never built anything I could check an answer against.

![The top row shows two boxes holding price lines that fall in exactly the same shape, and the bottom row lists two opposite sets of operations: on one side guidance flat, cash flow rising, buybacks at home, and on the other earnings falling, channels broken, rivals stronger.](/figures/stock-broken-vs-business-broken-en.svg)

### "I bought quality. Why am I losing money?"

Coca-Cola answers half of it: at 60 times, the business quality can't save you. Nike answers the rest — when the multiple is high, one stumble sends earnings and multiple down together, and you multiply two negatives. Pool Corp is the same play: revenue compounded 27% annualized through the Covid years, the market paid 55 times for a compounder, demand was pulled forward, and the stock went from north of 500 to 167. Boyar wrote it up at $20 in 2009, wanted to revisit for years without it getting cheap enough, finally wrote it this summer, and watched it fall further.

![On the left a tall wide rectangle stands for earnings of 10 times a multiple of 30, giving 300; on the right it shrinks into a short narrow rectangle for earnings of 7 times a multiple of 15, leaving only 105, and the gap in area is far larger than the drop on either side alone.](/figures/earnings-times-multiple-en.svg)

What strikes me is that the risk in a quality company sits inside the price you pay, and that moment doesn't hurt. The pain arrives two years later. Which is why "this is a great company" can't function as a reason to buy.

### "Everyone's selling. Is that an opportunity or a trap?"

The usable question from this episode is: who pressed the button. If an entire basket is being dumped on one theme and a few names obviously don't belong there — is an AI assistant really going to negotiate with every individual homeowner on Airbnb — then the seller wasn't looking at companies. On Booking, Boyar got specific: many of the small boutique hotels don't even have websites, the platform holds the operator relationships, EU travel regulation is thick, and none of that transfers to a chatbot. He also pointed out that ChatGPT launched instant checkout in September 2025 and dropped it by March; Google and TripAdvisor tried earlier.

![On the left a chatbot block, on the right a completed booking, and between them three walls: platform and owner relationships, EU travel rules, and small hotels with no website; three arrows bouncing back to the left are labelled with the failed attempts by ChatGPT, Google and TripAdvisor.](/figures/booking-moat-layers-en.svg)

The trap sits in the same passage. Asked for a catalyst, Boyar had no single one — "people finally realizing AI isn't going to kill the business" is the best he offered, which says nothing about timing. He also conceded 15 times isn't the floor. So whether this reasoning is usable depends on whether you have the three-to-five-year patience, and not on how elegant the argument sounds.

## Worth a look

- The Compound and Friends, 25 September 2026, with Jonathan Boyar
- The Adam Parker data cited in the show on the share of stocks beating the S&P 500
- Boyar's Fresh Looks series and the Boyar Research Substack
- Chris Mayer, *100 Baggers* — Boyar cites his work on the dangers of trimming
- To see basket selling in raw form, pull September daily charts for the New York Times, Booking and Airbnb side by side

## One thing to take away

One idea: **tell apart "it broke" from "people stopped wanting it."** Every clever judgment in this episode reduces to that single cut — Nike is the first, Booking is the second, the charts look the same, the responses are opposite. The difficulty is that a crowd walking away from something looks exactly like the thing falling apart.

Here's something I've tried, with nothing to do with stocks. Pick one thing you gave up in the last three months — an instrument you half-learned, a friend you stopped calling, a course you paid for and skipped — and write two lines. First line: which specific part actually broke. It has to be concrete, like the schedule never fit, or your back couldn't take it, or they'd already stopped replying. Second line: who was standing nearby saying it wouldn't work, including the voice in your own head. If you can't fill in the first line, you're probably looking at the second kind.