Foreword
This is a quick note, which tends to be just off the cuff thoughts/ideas that look at current market situations, and to try to encourage some discussions.
Just watched (really just listened) a great video summing up the year, and how investors should really think about their portfolios.
As usual, a reminder that I am not a financial professional by training — I am a software engineer by training, and by trade. The following is based on my personal understanding, which is gained through self-study and working in finance for a few years.
If you find anything that you feel is incorrect, please feel free to leave a comment, and discuss your thoughts.
Watch this
Josh Brown’s End of the Year Chartapalooza!
For this who are too busy/lazy to watch the whole thing, here’s a little glimpse which starts at 38m 38s (direct link):
So I think there was like this widespread mental illness amongst people who were like 16 years old, men, young men, who were like 16 years old and 35 years old, where in the last couple of years, they like discovered the markets and they followed a lot of people who were unqualified to be followed, and they did a lot of things that were inadvisable, and some of those things in the early going were like working, so they kept going, or they used margin, or they graduated from buying a stock to buying a stock on margin to buying options, like the, all of that stuff had to get wiped away. Like it, it had to, it was very unhealthy, it was like this young male, toxic energy of like, you know, I don’t need to learn anything, I don’t need to listen to you, I don’t need a job, I just need to wake up and trade shit on my phone.
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And it hasn’t been replaced by anything, there’s like a vaccum now. What are these people doing? We know they are not trading. Look at Robinhood, common stock, look at Coinbase, we know they are not trading, that’s the one thing we know for sure. We don’t know how many of them started reading books, god forbid, and like actually learning about investing and actually, like, came to the ephiphany that like people have done this before?
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So, it’s fine, it’s fine though, like because nobody comes into this smart, and you have to lose money to learn how to not lose money, like, it’s, it’s a progression. So we don’t know what’s gonna take its place, I don’t think, erm, that somebody’s gonna go from crypto to 60/40 indexing, it’s probably going to be a step in between and maybe that’s like the value stock rally now. Maybe that’s like people realizing like oh you mean you can buy like an oil stock, and they don’t make semiconductors, and it, stuff actually goes up?
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It’s not a smart vs dumb thing, it’s like you have to do this for a while, to understand how it works, and what the stakes are. So, er, I don’t know where the puck goes next, but we’ll see if we get a wizened class of investors out of this.
https://www.youtube.com/watch?v=L6fC1r_QsLE&t=2318s
Janky Thoughts 