Record Breaking Speculation

The stock market is at its most overhyped phase since the late 1990s tech bubble. Think back to how wrong the people were who claimed we were in an ‘everything bubble’ for the entirety of the record-breaking expansion in the 2010s. Now that you see the SPACs and IPO pops this year, you realize we weren’t in a bubble from 2010 to 2019. Those years set the scene for this craze, but they weren’t crazy in themselves. Here are some stats to back that up.

In 2020, 150 stocks with greater than $250 million market caps have risen over 200%. The most in any year from 2010 to 2019 was 42 in 2013. Furthermore, if you add up each year’s total in that period, you get 152. This year is a different animal. In the same manner, there have been 19 IPO this year where the stock doubled on the first day. The most from 2010 to 2019 was 6 each in 2013 and 2014. There were 25 in total in that 10 year period. As you can see from the chart above, the first day move on IPO day is getting closer to the peak in 1999. Ironically, one of the biggest IPOs in 2021 will be Robinhood. That is the top trading app for new retail speculators. 

Both retail traders and fund managers are all in on this market. The only difference is retail traders are doing better. As you can see from the chart above, the NAAIM fund manager exposure index is at 106 again. It has been above that level in 3 of the past 4 weeks. It has been above 100 for 4 weeks which is why the 4-week average is at a new record high. This data only goes back to 2007, but it’s still impressive. It means the average manager is the most leveraged long it has ever been. It would have been fun to see this data in the 1990s.

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Craig Newman 1 month ago Member's comment

Yes, the stock market is ALL speculation always was always will be. This is nothing anyone needs to concern themselves with unless they are investing money they can’t live with out. It will go down and then it will go up. You have whole generations of people conditioned to participate in this financial mechanism that are “institutionalized” haha. Your fear mongering and amplifying the fear mongerers. They obviously participate in the market. These people don’t give a shit about me or anyone else. So what is all this then?