Another worthwhile watch from the SPAC king Chamath
https://twitter.com/silvermanjacob/status/159505980620064358...
It seems insane to me these people dump on retail and their followers and continue to stand up in public.
https://twitter.com/silvermanjacob/status/159505980620064358...
It seems insane to me these people dump on retail and their followers and continue to stand up in public.
But next time it’s going to be perfect. The establishment will be foiled and everybody on our side will have diamond hands. So get in now, be early on the next wave, buy now before everyone else discovers this, etc. Rinse, repeat… SPACs, penny stocks, crypto, MLM pyramids, it’s all the same story.
My concern with your perspective is that it ultimately leads to the conclusion that the only way to prevent these situations is to prohibit retail investors from participating in certain types of investing.
This kind of thinking is what has led to modern America, where individuals are unable to invest in their friend's barbershop unless they meet certain net worth requirements or have worked on Wall Street.
AKA, bag holders. Towards the end of this last cycle, I even heard a couple of the bag creators use the term openly.
If money can move faster than business, weird things happen.
On the micro level everyone should invest all their capital in the stock sector that provided the highest returns last decade / year / quarter / day. Nobody never took a class in school that said to list your possible investments and select anything except the highest return, all things being equal. The problem is on the macro level that sector may not be undercapitalized so dumping the entire financial market into whatever won last time, guarantees a bump followed by crash.
Carried to an extreme, imagine a stock market so fluid that every penny of capital in our entire civilization flowed all at once every morning at 9am to the company that provided the highest return yesterday, on the assumption that high returns yesterday means high returns tomorrow. It would be epic to watch, but would not be a very functional financial market.
Lets say SPACs are a $10B sized market. And they had essentially $0 investment a couple years ago, a very underserved undercapitalized market. The first investor willing to risk it, can pick the best deal in the entire market, and make absolutely insane returns. The problem is the rest of the world financial market sees that insane return percentage and here comes a tsunami of $100T. It's not going to turn out well when that amount of cash impacts a market that's only $10B in size.
-- P. T. Barnum