The Profits Driving Market Narratives and Hyperbole
“Spencer bought NIO a few days ago, and he is already up 35%”
The quote above is a friend’s text describing his 15-year-old’s investing prowess. When asked if Spencer realizes NIO Company (NIO) is worth about twice the Ford Motor Company (F), the reply was the equivalent of a blank stare.
Spencer, and many new investors/speculators, both young and old, are currently enamored with stocks.
Most of these new entrants are passive. Passive investors and speculators are taking center stage. As they do, they diminish the role of active investors. By default, this means that liquidity and capital flows become paramount to investing strategies. At the same time, fundamental and technical analysis fall by the wayside.
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