From Tiny Bubbles To Frothy McBubbles

I can’t stop thinking about yesterday’s ‘Momentum Monday‘.

Like I said..almost EVERYTHING is working and yesterday was even better.

I changed my Twitter handle from ‘Tiny Bubbles’ to ‘Frothy McBubbles’ yesterday after the market closed.

You can make fortunes during a bubble, but now that we are in one, the key will be managing your escape once it ‘pops/crashes’.

You alone are not some market genius right now. Have a look at why you feel so smart:

I have had more five and ten baggers in the stock market in the last year than my previous 30 all-together. It is one thing to invest as an angel in a start-up and expect a ten bagger over 5-10 years, but another to get one in the public markets over 12 months (without applying leverage).

This is NOT all about the rise of the ‘new’ Robinhood investor alone. Chuckie McSchwab (Charles Schwab) has been basing for TWENTY years and just now breaking to all time highs and $100 billion market cap.

So Howie…What The F*#k Gives?:

I like this explanation for the current market from ‘The Rotation Report‘:

The liquidity backdrop in global markets is amazing. Since everyone who needed capital infusions could get as much money as they needed immediately, the Gamestop situation has turned into a net positive for stocks.

More people were talking about stocks thus more people telling their friends about the money they’re making and attracting more intense interest to the market while stirring up envy and greed.

Right now it’s all about how much risk you can lever up. Microcaps have outperformed the S&P 500 by 22% year to date.

Where is the ‘froth’ you ask? More from The Rotation Report:

So Howie…What is a person to do?

1. Do not go to Canada!

As my friend Frank (a fellow Canadian) pointed out to me yesterday…’Trudeau’s new Canadian travel restrictions are mind boggling. It would be inconceivable to try telling Americans that they can’t come back into their own country without spending $2,000 to be held in a hotel against their will. At least I hope so.’

2. Hold Your Bitcoin? I am.

Again, from my friend Frank:

Less than 50 days ago, Tesla became one of the S&P 500’s biggest components.

As of today, 0.013% of the roughly $12 trillion that tracks the SPX is indirectly invested in Bitcoin.

As you celebrate your winnings, think about what this might be telling us. I don’t know, but it would seem the decentralization / anarchy movement seems to been gaining momentum.

3. Try to enjoy the stock market gains as the market breadth does still remain strong and this strong breadth is generally a good sign for continued strength in a wide range of stocks.

4. Have an exit plan.

Hope this helps.