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Wall Street Bets: Making Waves or Creating Bubbles

Daniel Laboe
·2 min read

The markets are running ramped with young money-hungry investors & traders who don't have time to learn market fundamentals or even technicals and are riding euphoric waves. A Reddit blog called Wall Street Bets (WSB) is where over 1.8 million self-proclaimed 'degenerates' come to find the hottest stocks and option plays.

This is a big portion of the fresh money coming into the markets from retail investors, and it's going right into speculative plays. I'd just call it gambling.

It's interesting that these 'traders' don't care at all about the stock's valuation. They buy calls with no other catalyst than someone on this blog telling them to do so, and the funny thing is that it works more often than you would think. You just don't want to be left holding the bag at the peak.

GameStop GME just added 3 new board members on Wednesday, and the WSB's 'degenerates' (along with an institutional short-squeeze) drove the stock up 60% (100% at one point) because they have been waiting for any hint of bullish news about GME to catalyze a buy.

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The new generation of investors and their trading strategies is reminiscent of the dot-com bubble, where blogs and chat rooms about stocks popped up left and right. The markets are euphoric right now, and I would be careful with any new positions, especially in the tech sector.

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