How Could Tax-Loss Harvesting Pressure RH While Wynn Resorts Rises in 2025?

TL;DR

RH’s decline could face added pressure from tax-loss harvesting, while Wynn Resorts entered 2025 with far stronger momentum. RH is down about 50% in 2025 and 71% over four years, whereas Wynn is up over 50% in 2025 and more than 100% from its April lows. Read on for the comparisons, year-end risk, and other stocks discussed.

Transcript

You got to be flipping my flapjacks. How about that public account? It seems like it's just stuck right now between that 3.8 and about $3.95 million number. It was good day here today up $34,000 in the public count. Some stocks making some massive moves out there. Some of the Jack Jackson stocks, MJ stocks like the Planet up 23% today. Avon up 16%.... Read More

Key Insights

• Tax-loss harvesting is a serious threat to beaten-down stocks late in the year, because investors and fund managers sell losing positions in November and December to write off losses against gains, which piles additional selling pressure onto already weak names.
• RH stock is down roughly 50 percent in 2025 and down 71 percent over the past four years, badly underperforming the NASDAQ Qs, which are up 49 percent, and the broader NASDAQ, up 60 percent over that stretch.
• Wynn Resorts is up over 50 percent in 2025 and over 100 percent from its April lows, far outpacing the NASDAQ and S&P 500 and even beating many stocks including Nvidia.
• Cannabis stocks (called MJ or Jack Jackson stocks) remain extremely speculative because government taxation and classification rules make it nearly impossible to compete with the illegal market on price, despite an estimated $75 billion legal market.
• The Planet is a cannabis company with roughly a $100 million market cap whose growth potential to 10x or 100x is repeatedly blocked because the government stays in the way at both the state and federal level.
• Shopify made a 6 percent move on news of a huge potential increase in its business model, and the stock now trades near $150 after being $25 in 2022.
• A stock falling 40 to 60 percent during a year when the market is doing well is especially alarming, because the same stock would likely be down even more if the overall market were weak.
• Starbucks closing 100 North American locations caused people to panic, but that figure represents only about 1 percent of the company's total store base, so the reaction may be overblown.

Questions & Answers

Q: Why is RH stock down while Wynn Resorts keeps rising in 2025?

The speaker contrasts their market performance rather than identifying a specific business cause: RH is down about 50% in 2025, while Wynn Resorts is up over 50%. Wynn is also up more than 100% from its April lows, while RH could encounter additional selling pressure from tax-loss harvesting.

Q: What is tax-loss harvesting, and why could it hurt RH stock?

Tax-loss harvesting occurs when investors sell losing positions to offset profits taken elsewhere during the year. The speaker expects investors and fund managers to examine losers such as RH, Cava, and UPS in November and December, potentially adding substantial selling pressure.

Q: How has RH performed compared with the NASDAQ over four years?

RH is down 71% over the four-year period discussed. Over the same period, the Qs are up 49% and the broader NASDAQ is up 60%, showing a sharp divergence.

Q: Why is a stock falling 40% to 60% during a strong market especially concerning?

The speaker argues that such declines are alarming because they occurred while the overall market was performing well. These stocks could then fall further when shareholders and fund managers sell losing positions for tax-loss harvesting.

Q: How has Cava stock performed since February?

Cava is down 58% since February. During that period, the S&P 500 is up about 10% and the Qs are up about 13%, making Cava another potential target for tax-loss selling.

Q: Why does the speaker consider all MJ stocks speculative?

The speaker explicitly characterizes every stock in the MJ space as speculative. Although nearly all of them rose between 10% and 30% that day, the excerpt presents those moves as a subject for further analysis rather than proof of lasting strength.

Q: How did Shopify perform, and what price comparison does the speaker make?

Shopify rose 6% on news described as having the potential to increase its business model substantially. The stock was trading around $150, compared with $25 in 2022.

Q: Were Starbucks investors overreacting to the announced store closures?

The speaker urges perspective on the announcement that Starbucks would close 100 North American locations. He says that represents about 1% of the company’s store base, suggesting the headline was smaller in proportion than the reaction implied.

Summary & Key Takeaways

• The public account sits between $3.8 and $3.95 million and was up $34,000 on the day. Cannabis stocks surged, with the Planet up 23 percent and Avon up 16 percent, while Shopify moved 6 percent, Celsius 4.5 percent, and PayPal 3.5 percent on a strong market day.

• Wynn Resorts is up over 50 percent in 2025 and over 100 percent from April lows, while RH is down about 50 percent this year and 71 percent over four years. Cava has dropped 58 percent since February even as the S&P rose about 10 percent and the Qs about 13 percent.

• Tax-loss harvesting will pressure losing stocks like RH, Cava, and UPS through year-end as investors and fund managers sell to offset gains. Cannabis stocks stay speculative because heavy government taxation and classification rules prevent them from competing with the illegal market on price.