I'm not a bear. I still think this market has legs. BUT, there are undoubtedly signs of excess beginning to form.
These Teenagers Know More About Investing Than You Do - WSJ
I remember in '21 when kids in school were buying NFTs, crypto, meme stocks - in 2024, it's big tech. That's where the bubble lies. The general market isn't crazily overvalued. Yes, there are pockets of excess but most "boring" companies seem about right. I suppose you can buy these companies now and hope for multiples to expand across the board...
Generally, when youngsters are attracted to the market, it's not because they understand the market. It's the greed that's drawing their naive minds in. I watched it first-hand just three years ago. The other thing about kids that age is they're unbelievably arrogant. The truly believe that they are destined for glory without doing any work. I suppose we all get our comeuppance at some point.
It's worth pointing out I wasn't much cleverer - I just didn't have any friends and I was an overthinker so I saved myself from losing money (in 2021). I was paper trading from 16 until 18-and-a-half and I wasted so much time focussing on the economy, charts, news articles...
If you read my posts from 2021, you'll realise that I was definitely trying to "get in" on the hype. I just didn't know anything about anything. And my strength was that I realised that I knew little so I lingered back for a while.
(I visibly cringe when I read some of my older posts. I was just copying Burry and other contrarian investors without any thought. Funny enough, the more time goes on, the less I agree with his picks.)
These kids are going in blind and I wish the parents were more intelligent. They shouldn't encourage this without some hard lessons. My dad quizzed me for about a year before he considered me ready to buy any shares. And, upon reflection, I was probably a few months too early.
My conclusion - financially stupid parents raise financially stupid kids. Maybe the parents should teach the kids about saving, budgeting and how to spend money before getting into the murky realms of investing. |
