Remember the good old days of the 1990s? Back in the day, you could drive your Saab 900 to Bed Bath and Beyond to get some towel racks on your way to the AMC movie theater to watch “Toy Story,” all the while being connected to work by the snazzy BlackBerry clipped onto your belt. Maybe later, if the kids behaved themselves, you could swing by the GameStop store to buy them a game for their Sony PlayStation.
Those days seemed well in the rearview until COVID hit and the Robinhood-Reddit-Wall Street Bets monster rose up—seemingly out of thin air—to turn asset valuation on its head by snapping up equity in stocks referred to as “meme stocks.” Now, also-ran companies that many of us thought were already on the ash-heap of history have become juggernauts steamrolling professional traders on the wrong side of the new reality.
This piece may sound like a frustrated old-school investor acting like grandpa Simpson shaking his fist and yelling, “You rotten kids!” And maybe that is right, but I’m really not sure we’ve seen a break from reality this large before. Perhaps the “dot-com” bubble, but back then we were transfixed with all the new technology and its possibilities. Of course, there were many crazy start-ups that had no business being public companies, but many of the “dot-com” stocks were just too early, as they had not figured out how to monetize many good ideas. What we are seeing now, however, is stocks like Blackberry being driven up seemingly for nostalgia’s sake.
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