In some respects, this time really is different. Diamond rush desperation distrust series#I worry that the same forces diminishing modern politics - partisan divisions, pervasive distrust, social media echo chambers, misinformation, cancel culture and conspiracy theories - are seeping into the investing world, where they’re warping capital allocation, inflating a series of bubbles and challenging the ability of regulators to protect investors and the markets. These movements can be fun and empowering, but financial super-fandom can quickly become toxic. Footballer Tom Brady has launched his own NFT collection. Sometimes that connection is overt: From Christmas Day the home of the L.A. Some of the biggest investing trends have become an extension of personal identity, akin to your religion or your sports team. It’s no longer enough to admire a company or asset and buy the stock or token. And so they ignore nosebleed valuations and buy the dip.īut something’s changed too in the culture of investing. “Stocks only go up” isn’t just a wry catchphrase: Essentially it’s been the lived experience of young investors this past decade. The aggregate money supply has increased by $21 trillion since the start of 2020 in the U.S., China, euro zone, Japan and eight other developed economies. The short explanation for all this feverish activity is that thanks to central bank and government stimulus, far too much money is sloshing around in the financial system. In 1929 shoeshine boys gave out stock tips today’s teenagers ask their parents to open a crypto trading account on their behalf. adults have invested in crypto, according to Pew Research Center among twenty-something men, that proportion is closer to half. equities trading, according to Bloomberg Intelligence.Īn estimated 16% of U.S. At the peak in January, retail investors accounted for almost one quarter of U.S. Investors have poured an astonishing $1 trillion of cash into equities funds in the past 12 months, or more than the combined inflows of the past 19 years. (In December the home of WallStreetBets, Reddit Inc, announced it had filed confidentially for an IPO) became two of the year’s biggest initial public offerings: At the peak they were valued at $59 billion and $75 billion. 1Īnd because there’s no gold rush without pickaxes, retail brokerage Robinhood Markets Inc. soared as much as 2,450% and 3,300%, respectively, when Redditors coordinated online to punish hedge funds that were betting on the companies’ demise. and cinema chain AMC Entertainment Holdings Inc. Struggling video games retailer GameStop Corp. A non-fungible token artwork (NFT) - in this case, a JPG file by an artist named Beeple - sold at a Christie’s auction for $69 million. Cryptocurrencies, the bulk of which have no intrinsic value, were at one point collectively worth more than $3 trillion.
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