The whole WallStreetBets situation. If we weren't in a bubble already... Man, it's almost too much. Hadn't I seen it, I wouldn't have believed it. Unless I read it in a book – that way it all gets less real, and more believable since it happened so long ago. We all know humans are capable of some amazing collective delusions, but to actually live through it – it's a weeeeird feeling.
Hadn't even realized that "finance reddit" was a thing. Now they seem to rule a part of the stock market, at least for a week or so.
I've learned something from seeing this. If one attempts to short a runaway bull market, then one must do ones best in the extremely difficult task of trying to time it somewhat. To do that, one needs to take phenomena such as these into account.
Possible increase in margin buying is another such phenomena. Maybe we'll see another wave of margin buying (one of course occurring in 1920s, but also in 2000, possibly causing the bear market rally of that year)?
If valuations are this extreme already, and if the surrounding/underlying conditions (FED supplying money like a rich kid's dad, gov'ts expanding fiscal as well, etc. etc.), why not even more extreme? Why not S&P500 avg. P/E of 60? 80? 100?
Seems cards are dealt in such a way to permit such a development, though the huge uncertainty that covid still is, and possible (probable) disillusion with the post-covid world, should discourage it.
But financially, nothing really sets any restrictions in the very short term. Were now in autumn of '99 or spring of '00, or somewhere in between – only question is where, and when it all ends.
I could see a war between shorts and longs continue for a few weeks/months, longs winning for a while, a month or two, helping to create that stratospheric end-of-bull-market surge, while the last shorts eventually will have the last laugh.
In all likelyhood, I myself was way early going in the short direction. (And then I still refrained way longer than I wanted...)
You can't calculate mania, or schedule when it will end, but you can take into account your own tendency to underestimate it...
I'll make sure to stay very solvent way longer than the market can stay irrational.
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Nya, Dollarvalue, hope you're not beating yourself up about missing this last mad part of GME (: Foreseeing such things are almost impossible, and you've gained so very much already – don't get greedy ;-) |
