June 10, 2021 Sign Up

By Overheard on Wall Street

"You are never too old to set another goal or to dream a new dream."

Good morning! On its bid to become the Amazon for video games, GameStop named two Amazon execs as CEO (Matt Furlong) and CFO (Mike Recupero). (Looks like we really headed to the moon folks) In other meme stock news, some of the recent gainers came crashing down: AMC (-10%), Clover Health (-24%), Kodak (-12%), Bed Bath & Beyond (-7%), while it was WWE's turn to take off for the moon, with an 11% gain.

Fun Fact of the Day: There is a stock ticker $YOLO, which would have been a great ETF for meme stocks but unfortunately the homies over in the Cannabis industry have called dibs on it. 

Intern szn is also in full swing, so if you think a young 'un would benefit from reading Short Squeez, forward them this email or send them this link.

1. Story of the Day: FOMO Economy

Have you recently bought a meme stock or a cryptocurrency because you heard someone made a fortune on it? Or invested in something after hearing a friend bought it and did absolutely no research yourself? If yes, you are a victim of FOMO (fear of missing out) investing. 

Phrases such as "Buy the f*cking dip," "Have fun staying poor," "Diamond Hands," and "OK boomer" have become commonplace. Gen Z and younger millennials don't want to invest in "boomer" stocks, they want to get rich quick and with the current state of the markets (meme stocks, cryptocurrencies, etc) they are basking in their something-for-nothing mentality.

FOMO investing has been fueled by the pandemic, where we had nothing better to do than sit at home, save or get stimulus money, and watch what other people are doing. Investing apps such as Robinhood (20 million users) exploded during the pandemic, and retail investors now make up 24% of US Equity trading volume, up from just 10% a decade ago. 

Reddit, Twitter, TikTok and Discord channels are exploding with investment advice, and social media influencers are pumping new crypto schemes daily, and followers are dumping their savings so they don't miss out on the latest get-rich-quick coin or meme stock. (From Snoop Dogg to Lana Rhoades, everyone's pumping something these days)

Short Squeez Takeaway: Even if you are a sophisticated investor, it's hard to block out the noise when it's around you 24/7. It is tempting to imagine that one great investment could help you buy a house, buy a diamond ring for your significant other, or wipe out your entire student loan. It would be interesting to see how long FOMO investing can last though. Rise in interest rates and inflation could make boomer investments like bonds more attractive but we are willing to bet our entire Dogecoin portfolio that Gen Z investors would rather throw money into crypto scams before they even think about investing in treasury bonds.

2. Markets Rundown

• S&P and Nasdaq both retreated as investors eyed a key inflation report due Thursday
• Cryptocurrencies bounced back slightly after El Salvador became the first country to make Bitcoin legal tender

Movers & Shakers

• (+) MicroStrategy ($MSTR) +12% after its Bitcoin bond sale.
• (+) Workhorse Group ($WKHS) +8% after being swept up in meme stock trading.
• (–) Dish ($DISH) -7% after a research analyst downgrade.

3. Top Reads

4. Book of the Day: Richer, Wiser, Happier: How the World’s Greatest Investors Win in Markets and Life

Have you ever wondered what secrets the super wealthy investors are hiding? In Richer, Wiser, Happier, the author (William Green) takes us through a journey profiling the secrets of some of the world’s best investors like Warren Buffett, Charlie Munger and John Templeton.

The book is full of inspiring stories such as when back in 1939, John Templeton (creator of the Templeton Growth Fund averaging over 15% per year for close to 4 decades) picked a basket of around 100 stocks that were trading below $1 and invested $100 in each of them.

Templeton had the guts to do this right as the US was heading to war and insurance companies were banned from investing in stocks because they were deemed too risky. Templeton didn’t care. He ended up making 5x on his investment. Sixty years later in 1999, he shorted a basket of technology stocks loved by most investors. His profit totaled $90 million dollars.

Green writes “They can teach us not only how to become rich, but how to improve the way we think and reach decisions.”

5. Daily Visual: Devices US Wearable Device Owners Have

Source: Insider

6. Daily Acumen: Future Proof Yourself

Due to increasing technological changes, our careers have changed a lot over the years. We’re being asked to change locations more than ever and move between different jobs, tasks and skills more often.

Changes in the workplace are happening faster and long term job security is becoming a thing of the past. How are you going to future proof yourself and stay relevant?

It’s important to stay flexible and be able to evolve with changes in the world as they happen. It’s a good idea to focus on solving people’s problems instead of focusing on a job description. It’s too easy to create a sense of identity around a particular role.

The world is changing too quickly and you want to be open to learning new things. Listen to and understand what people’s problems are because only then will you be able to focus on developing the solutions and continue to stay relevant in the workplace.

7. Memes of the Day

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