Slack and Sloppy
Mar 25, 2021
Dylan’s Weekly Note:
I want you to take a minute and think back to the world before 2016. A world before Covid. A world before Donald Trump entered politics. A world before NFTs and SPACs. GameStop wasn’t an investment vehicle but instead just a crappy little store in the mall selling video games. Can you picture it? I can’t.
The whirlwind of the past five years might be unlike anything we’ve ever experienced before or will again. We’ve been so stretched, so dizzied by the pace, that we don’t remember how to appreciate a little calm. A little downtime. A little slack.
The noise of politics is lessening. In some ways it’s becoming boring. Vaccines are being pushed out, allowing us to at least flirt with a sense of normalcy again. Economically, we averted the worst potential scenario in large part because of stimulus checks. The irony might be that those same stimulus checks are morphing slack into sloppy thereby creating the next existential crisis.
I’ve been in this business for 25 years, largely observing and reporting. I’ve seen bubbles. I recognize irrational exuberance. In my adult life, I have never seen a more toppy market.
SPACs are not a panacea for wealth disparity. They’re just a way to raise money. NFTs are not even a real thing! Gamestop is not an $11B company! But when there’s slack in the system along with an insatiable appetite for alpha and Central Banks handing out cash, we get sloppy. We chase and assign unsustainable valuations which are destined to fall, leading to economic collapse, more federal bailouts and an opportunity to make the same mistakes all over again.
People, a little slack is okay. If your jeans are a little loose, you don’t have to binge eat. If there are no good movies showing, read a book instead of seeing a remake of a remake of a bad movie to begin. And if you have a little extra money you want to put to work, you don’t have to force it into something you don’t understand. Don’t get sloppy with a little slack.
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
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.
tastytrade is a trademark/servicemark owned by tastytrade.
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”).
tastyworks, Inc. (“tastyworks”) has entered into a Marketing Agreement with tastytrade (“Marketing Agent”) whereby tastyworks pays compensation to Marketing Agent to recommend tastyworks’ brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastyworks. tastytrade is the parent company of tastyworks. tastyworks and Marketing Agent are separate entities with their own products and services. tastytrade has different privacy policies than tastyworks.
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.