Having a career that has spanned the Internet bubble, the attacks of 9/11, and the Great Financial Crisis, I’ve certainly gained a better appreciation for the expression “May we live in interesting times”.
That said, I never expected anything as “interesting” as a global pandemic, the worst GDP decline in modern history, mass protests across America, and the sharpest sell-off and quickest recovery in U.S. stock market history.
But now what? Personally, when I look around I see the signs of rampant speculation and investing complacency everywhere:
Bankrupt companies are routinely the highest gainers in the stock market;
The Put - Call ratio is at an absolutely extreme level near ten year lows (a sign of complacency);
In the last 10 weeks every single stock in the SP500 is up (not a great environment to be a short seller, though we’ve “batted” a lot better than 0 for 500);
Every taxi cab driver from Stamford to Wichita has a Robin Hood account and is minting it;
And the CEO of Barstool Sports (who has created a ton of value with his company) is doing end zone celebrations daily due to his trading prowess!
Time will tell how the story ends, but the signs are there. And as Warren Buffet famously said:
“In the short run the stock market is a voting machine and in the long run it’s a weighing machine.”