Alert

LEARN HOW TO SET UP AND MANAGE A PORTFOLIO IN 4 EASY STEPS WITH DR. JIM SCHULTZ!

Desperation Speculation

Mar 19, 2021

By: Dylan Ratigan

Dylan’s Weekly Notes:

Speculation is healthy. It’s necessary. It’s fundamental to capitalism because without it, no prospective business would have access to the financing required to get an idea off the ground. Speculation is betting on someone or something because you believe their product or service meets a need people are willing to spend their hard earned money to buy. But what happens when there are no good ideas? 

There’s a difference between abundant opportunity speculation and desperation speculation. Opportunity speculation happens when the marketplace is flooded with good ideas so money is aggressively spread out and diversified across a spectrum of potential. Desperate speculation is what happens when common sense and reason lose out to greed and conclusions predicated on false syllogisms. 

It’s easy to get up in mania, especially when you’re surrounded by friends and family making quick money. Mom buys a SPAC and triples her money. Dad bought a meme stock, quadrupling his money. And grandma, well she bought bitcoin at $1000, just divorced grandpa and is now dating someone younger than you. You want a little of that. You might even believe you deserve some of that. But before you pull the trigger on something you don’t understand, ask yourself one simple question…. If asked, can you explain what you’re buying in just a sentence? If the answer is, no, maybe hold off a second. 

Whether they’re SPACs, NFTs, meme stocks, crypto currencies or whatever comes next, there is always a pool of people willing to throw money at an idea. Some of those ideas are great. They will pay off far beyond what was ever expected. They may even become defining moments for you. However, most don’t pan out and that’s why being somewhat discretionary in speculating is the difference between successful speculation and panhandling in a subway station.

If you don’t know what you’re ordering off the menu, you might find something new you like. Or you might be throwing away $50. If you’re speculating because there are so many good ideas out there and you hope to be part of one, great. But if you’re speculating because it’s what everyone else is doing and you’re just desperate to be one of the cool kids, well, you might want to begin scoping out high traffic subway stops.  

Be sure to catch Dylan Ratigan & Tom Sosnoff every Wednesday at 1pm CT for a new episode of Truth or Skepticism live on tastytrade.com.

Listen to previous episodes on Spotify, Apple Podcasts or on tastytrade.com.


Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Related Posts

tastytrade content is provided solely by tastytrade, Inc. (“tastytrade”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, transaction or investment strategy is suitable for any person. Trading securities can involve high risk and the loss of any funds invested. tastytrade, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors, and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastytrade is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparison, statistics, or other technical data, if applicable, will be supplied upon request. tastytrade is not a licensed financial advisor, registered investment advisor, or a registered broker-dealer. Options, futures and futures options are not suitable for all investors. Prior to trading securities products, please read the Characteristics and Risks of Standardized Options and the Risk Disclosure for Futures and Options found on tastyworks.com.

tastyworks, Inc. ("tastyworks") is a registered broker-dealer and member of FINRA, NFA and SIPC. tastyworks offers self-directed brokerage accounts to its customers. tastyworks does not give financial or trading advice nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastyworks’ systems, services or products. tastyworks is a wholly owned subsidiary of tastytrade, Inc (“tastytrade”). tastytrade is a trademark/servicemark owned by tastytrade.

Quiet Foundation, Inc. (“Quiet Foundation”) is a wholly-owned subsidiary of tastytrade The information on quietfoundation.com is intended for U.S. residents only. All investing involves the risk of loss. Past performance is not a guarantee of future results. Quiet Foundation does not make suitability determinations, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of Quiet Foundation’s systems, services or products.

Small Exchange, Inc. is a Designated Contract Market registered with the U.S. Commodity Futures Trading Commission. The information on this site should be considered general information and not in any case as a recommendation or advice concerning investment decisions. The reader itself is responsible for the risks associated with an investment decision based on the information stated in this material in light of his or her specific circumstances. The information on this website is for informational purposes only, and does not contend to address the financial objectives, situation, or specific needs of any individual investor. Trading in derivatives and other financial instruments involves risk, please read the Risk Disclosure Statement for Futures and Options. tastytrade is an investor in Small Exchange, Inc.

© copyright 2013 – 2021 tastytrade. All Rights Reserved. Applicable portions of the Terms of use on tastytrade.com apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastytrade’s podcasts as necessary to view for personal use.