Quotes and Chart of the Day: Takes Me Back

Man! Reading this morning’s WSJ article “Robinhood, Three Friends and the Fortune That Got Away” so takes me back to the late 90s!

Here’s some snippets:

“Mr. Garcia, a 32-year-old school photographer, made more money in a few days from the market than a month’s work at his day job.”

““What color lambo you buying?” he texted his friends Mike Norkin and Alex Ela, also photographers, joking about market riches delivering six-figure Lamborghini sports cars. “I’m buying three,””

“On a typical day, the three men exchanged at least 50 group texts and held several video meetings to discuss investments. They logged their account balances on a shared spreadsheet. In the evening, they played online videogames together, swapping out usernames to reflect various stocks they liked. They saw other gamers doing the same.”

““When you’re in ‘Call of Duty,’ there’s a rush when you win your match, and you’re doing well,” Mr. Garcia said. “With Robinhood, you’re seeing your account go up, and it’s that same euphoric feeling.””

“Many rookie traders, accustomed to sharing birthday photos and daily online musings, showed few qualms about making investments based on what friends shared in group texts or what strangers posted on Facebook. As much as anything, their investing is a social activity.”

““Do u have more than 1k on RH,” Mr. Ela texted Mr. Garcia, asking about the balance of his Robinhood account. “If so I recommend using margin.””

OMG! Believe me, that’s terrifying!

As for the rest of the above story, it gets ugly, but not as ugly as you might think, or as it could’ve gotten.

The three gents (well, two of the three for sure) came to their senses as the economy began to reopen and their respective careers came back to life. However, the retail trading bubble has yet to burst — so I’m hoping they don’t get sucked back in. But, having once tempted fate and “survived”, the risk, alas, is high, I’ve seen it…

Here’s from my Feb 6 post:

“Honestly folks, it’s been just over 20 years since I’ve seen this much fervor over stocks. And we’ll lump certain cryptocurrencies (same fervor, new target) in there as well…

Like back then, I’m fielding questions from folks on stuff they’d never dream of considering under normal market conditions; it’s just that they know somebody, or know somebody who knows somebody, who’s making a killing! Just like 1999!

Of course there’s Reddit, but I know of small custom chatrooms where friends share stock tips; then abuse one another when somebody’s tip hasn’t moved within a day or two after delivering it… Just like 1999!

I know of situations where folks quit well-paying jobs to trade full time. Just like 1999!

Employers have told me of employees coming to work and bragging about the thousands they’re making in their early morning trading sessions… Just like 1999!

And there’s much more…. Valuations, call volumes, euphoric sentiment readings, volatility, margin debt, on and on… Just like (in many cases more so than) 1999!”

And here’s 1999 + 3 years (Nasdaq 100 Index):


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