Hello, everyone – I want to chime in on the latest phase of the speculative market mania, which includes the GameStop price explosion. This is extremely unhealthy.
People from all walks of life, who know nothing about finance or investing, are jumping headlong into speculation.
People from all walks of life, who know nothing about finance or investing, are jumping headlong into speculation.
The latest speculative mania is the result of trillions of dollars worth of liquidity being pumped into the markets.
The same phenomenon occurred in the early stages of Germany's hyperinflation. Almost everyone was playing the market.
recision.files.wordpress.com/2010/12/jens-p…
The same phenomenon occurred in the early stages of Germany's hyperinflation. Almost everyone was playing the market.
recision.files.wordpress.com/2010/12/jens-p…
I'm a tremendous proponent of everyday people learning about finance & investing (and earning healthy returns), but this "central bank-Robinhood-Reddit"-dominated speculative mania is bad, bad news.
It's like the Roaring Twenties or late-nineties dot-com bubble on steroids.
It's like the Roaring Twenties or late-nineties dot-com bubble on steroids.
My advice to everyone right now - from amateur traders to professionals - is go read Benjamin Graham's classic "The Intelligent Investor."
In that book, he explains the differences between speculating and investing, and why you should favor the latter.
amazon.com/Intelligent-In…
In that book, he explains the differences between speculating and investing, and why you should favor the latter.
amazon.com/Intelligent-In…
Via social media, I can see so many young people, who had absolutely no interest in finance or markets a few months ago, talking about the latest stock they're "investing" in via Robinhood.
Unfortunately, merely buying a stock is not "investing"...the vast majority are gambling.
Unfortunately, merely buying a stock is not "investing"...the vast majority are gambling.
Gamestop is a horrifically horrible investment - at today's prices or even hundreds of dollars cheaper. It's wildly overvalued.
Yes, the Redditors engineered a short-squeeze. But do they have an exit strategy? Many are treating it like a video game.
Yes, the Redditors engineered a short-squeeze. But do they have an exit strategy? Many are treating it like a video game.
I still hold my belief that today's monetary & bubble mania is going to end in complete chaos.
It's not going to fall straight down, but just go haywire and break (see below).
I believe that the latest market insanity is all part of that process...
It's not going to fall straight down, but just go haywire and break (see below).
I believe that the latest market insanity is all part of that process...
https://twitter.com/TheBubbleBubble/status/1087784349599186946
I'm still a staunch skeptic of mainstream risk assets (in these times).
I've said all along that I only believe in hard assets & alternative assets (see below), and they've all done very well in recent years.
I've said all along that I only believe in hard assets & alternative assets (see below), and they've all done very well in recent years.
https://twitter.com/TheBubbleBubble/status/1131971143139811331
This post below is from a Facebook friend and is a perfect example of what I’m talking about.
Everyone wants in on the market action - they think the market is a money-making machine. Just buy random assets & they magically go up. It’s the shoeshine boy phenomenon of the 1920s.
Everyone wants in on the market action - they think the market is a money-making machine. Just buy random assets & they magically go up. It’s the shoeshine boy phenomenon of the 1920s.
From a contrarian perspective, this type of behavior is extremely worrisome.
No, I don't blame small traders and investors, though I wish they would prioritize education over turning a fast buck.
I blame central banks for unleashing this mania.
No, I don't blame small traders and investors, though I wish they would prioritize education over turning a fast buck.
I blame central banks for unleashing this mania.
https://twitter.com/TheBubbleBubble/status/1355605995775533063?s=20
Why am I so concerned? Because it's not going to end well. Many people are going to get burned.
I'm worried about the stability of our society. I also don't want capitalism to be blamed when this ends in disaster.
This mania is the fault of central banks, not capitalism.
I'm worried about the stability of our society. I also don't want capitalism to be blamed when this ends in disaster.
This mania is the fault of central banks, not capitalism.
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