Bubbly Market

The GameStop stock mania swept the market and the media in the past week. It seems the entire world jumped into this frenzy by buying the GME shares, then it crashed as soon as the couple of brokerage started restricting the buy orders of this stock. I’ve participated into this “raid against the Wall Street” with the fun money. It didn’t go well but that was fun.

The US stock market is at the all-time high again.

Is the market in the bubble? I think so. See all the frenzy on the meme stocks, penny stocks, SPACs (blank-check companies), cryptocurrencies, and precious metals. The retail investers are clearly the force in the market. There are a lot of pump-and-dump, and probabaly many frauds as well.

Will it burst? Yes, definitely, every bubble bursts.

When it will brust? No idea. I won’t be surprised if there is a 10–20% correction tomorrow.

However, the stocks aren’t expensive when they are compared to the risk-free assets. The ERP in Feb 1st is 4.76%. So, my investment has no change. I am keep investing into the market.

Originally posted on February 7, 2021