We Have Reached The Silly Phase Of The Bull Market

Particularly galling – at least to me – is that some portion of this speculation was funded by taxpayers. Some of those stimulus checks Congress sent out – $290 billion of them – ended up in Robinhood or ETrade accounts. A recent WSJ article quoted an out of work 22-year-old woman who put a portion of her stimulus check into her Robinhood account:

It was basically free money, so, you know, I decided to play around with it,” she said. “You might lose some, you might win some. It’s like a gambling game.

She doubled her money trading stocks so now she’s shifting to options because “you can make a pretty good amount of money in one day”.

“It was basically free money” pretty much says it all I think. For a lot of people, those stimulus checks were just “free money”, a windfall which they treat differently than the money they actually had to work for. Why not take a shot on a lottery ticket like Hertz or Chesapeake? What have you got to lose? You’ve got a stimulus check funded brokerage account and your enhanced unemployment benefits last until the end of July. How much do you want to bet those benefits get extended? Does anyone believe there won’t be another round of checks? In an election year?

These young “investors” are just as cocky as the dot com day traders back in the day. In the comments section of the same WSJ article I cited above, a 35-year-old said of veteran investors:

Maybe they just lost touch with the general public or don’t know enough about technology to properly invest in this new digital economy. Either way, stop making excuses.

I heard that in 1999 too, that anyone who wasn’t buying into the madness that was the dot com boom just didn’t understand. They were old fogies who didn’t understand the “new economy”. Only it turned out that the new economy was a lot like the old one where revenue, profits, and solid balance sheets turned out to be fairly important.

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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