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Discussion Starter · #1 ·
Maybe we can build a list of the craziest, most hyped, bubble stocks (or other securities) in this current market rally? Here's what I have

PLUG
TSLA
NIO
FCEL
ARKK
Bitcoin
Ethereum

And here are some performance statistics, sorted by 12 month return. Originally I was going to use % but the numbers are so huge that I decided to convert them to "multiples". For example NIO went up 17.7 fold, over 12 months ($1,000 became $17,700). The lowest performer on the list is ARKK which only about tripled in price, 2.8 times.

The winner over 1 month is PLUG.

I am not interested in owning any of these, but bubbles are fascinating to watch.

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Discussion Starter · #4 ·
I wouldn't worry about valuation... just list anything that's been going up like crazy recently.

Interesting ideas @doctrine

Personally I love the parabolic chart on PLUG. By "love" I mean, I'm fascinated by this insanity. And look at that volume! Plus... this is no penny stock. It's worth $30 billion! So crazy.

Volume today was 110 million shares. That's double the SPY volume! Absolutely unbelievable.

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Discussion Starter · #5 · (Edited)
Maybe I should clarify that I am not endorsing any of these, and I would never buy any of these, except for my $600 in bitcoin (gambling fun).

But Bitcoin is boring compared to these stocks. Take FCEL for example. It isn't a penny stock, not a micro cap. It's a large stock with very high daily volume and liquidity.

Here are the single day movements recently, rounding to whole percents. Each of these is one day!

Jan 5: up 6%
Jan 6: up 10%
Jan 7: up 22%
Jan 8: up 2%

Jan 11: up 3%
Jan 12: up 21%
 

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Discussion Starter · #7 ·
Here's a mid cap Canadian one! Same mania theme as many of the ones I listed above, and what Cramer is pumping.

Ballard Power, BLDP. It's up 74% over the last month, and up 279% in the last year (that's nearly 4X)
 

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Discussion Starter · #14 ·
Most of these stocks growing rapidly have the sales and earnings to support their valuations. The market determines the value of these companies after all and is reasonably efficient as in all news is impounded into the stock price. On Morningstar the tech sector is ~ 15% overvalued now, the market 10% . Not exactly a 'bubble'
You should buy them, Jimmy. As you've said before, why settle for index returns when with a bit of smarts and hard work, you can beat the index.

TSLA, NIO, FCEL, PLUG
 

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Discussion Starter · #16 ·
Same thing as why do you @james4beach buy the overvalued US and Canadian stocks when they are some of the most expensive markets based on their CAPE ratios? Why don't you buy Russian stocks instead?
One buys diversified indexes (or in a broadly diversified portfolio of stocks) to benefit from the equity premium and the market's tendency to rise over time due to the aggregate corporate earnings growth. That's investment.

One buys hot/mania stocks like PLUG to gamble and hope they will go up dramatically in the short term. It's an entirely different game. Looking at the price and volume action it's clear that PLUG and NIO are in a momentum/pumping kind of mania.

I think it's important to not confuse the two. Some people are aware that they're just gambling on PLUG, NIO, Bitcoin.

Some other people may mistake this for "investing".
 

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Discussion Starter · #19 ·
Maybe you should try and understand these stocks and how to value them first instead of just dismissing or mislabeling them. If you don't want to learn more about investing that is fine too.
Yes, I understand the stocks. There is manic, trend-chasing action on TSLA, NIO, FCEL, PLUG, at the moment.

The companies themselves may or may not be bogus. I'm saying that the current trading (price action) happening on them is very likely a bubble-like speculative mania. That makes it very hard to invest in them, because their prices are very likely distorted by this gambling activity.
 

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Discussion Starter · #24 ·
I want reactions, so let's post this.

Quiz question:

During the dot-com bubble of 2000, who had the biggest and the longest drawdown?
  1. US Large Cap (aka S&P 500)
  2. US Small Cap Growth
  3. US Small Cap Value
The answer... drum roll... US Large Cap aka S&P 500! It took more than 4 years to recover from its -44% drawdown after more than 6 years underwater. Small Caps took only 9 months to recover from their -32% drop, after 2-3 years underwater.
And what was the QQQ drawdown?
 

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Discussion Starter · #25 ·
PLUG
TSLA
NIO
FCEL
ARKK
Bitcoin
Ethereum
I'll add HMMJ to the list

The pattern is similar and they've gained steam around the same time. If you look at volume and price movements, you'll see that a new wave of enthusiasm hit most of the above in November, and has gotten increasingly crazy since.

Nice to see that marijuana stocks are popular again.
 

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Discussion Starter · #27 ·
What does QQQ hold? Large Cap.
Back then, it held one sector. It shows the danger of high concentration in a single sector.

No problem investing in some EVs / battery stocks, but all of these are basically one sector. If you diversify across more equity sectors, the danger of any one sector hitting you very hard is alleviated. That's the right way to put together a portfolio.

ARKK is not well diversified, by the way. It has a huge 10% weight in TSLA and also a lot of biotech. Very risky, could see huge drawdowns if things go badly.
 

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Discussion Starter · #32 ·
I had a question. is Tesla in a bubble? I ask because their stock price is up 1000% since march 20 of 2020 but if I look at earnings in yahoo finance from q4 2019 to q3 of 2020 their earnings dont show a 1000% increase. Although it does show that that is when tesla first became profitable. Am i using the wrong numbers? Or is it because Tesla is considered disruptive technology that has great potential for the future?
Nobody knows for sure, but I believe that TSLA, FCEL, PLUG and all these battery/electric related stocks are acting bubbly at least right now.

Longer term it might be a different story
 

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Discussion Starter · #47 ·
With the market in an optimistic mood today, it looks like the craziest stocks are getting ready to lift off!

The manic pre-market buyers are already loading up. PLUG up 5% pre-market, BLDP up 8%, and SPCE up 6%.

Will these stocks be up 10% or 20% today? lol, this market has become such an unfettered casino. The Federal Reserve has done this. Wild, fearless speculation going on.
 

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Discussion Starter · #66 ·
GameStop (GME), or how to become a millionaire within 6 months.
Yes, incredible move today.

So here's the question. Why would you bother with any dumb old index based investing technique, even TQQQ which will only make you a few percent a year.

Why bother with any of that when you can just buy GameStop and make all your profits in one day?
 

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Discussion Starter · #67 ·
Should be noted that all major media outlets, CNBC etc were talking a ton about GameStop yesterday. So overnight, many greedy speculators were waiting to pile into the stock today.

But you can see in BB that the speculating public completely gave up on their idea of pushing BB up again. So to really "trade" this kind of strategy, you would have to be very on top of which hot themes are in play. You'd have to monitor all the message forums, monitor the media, watch the options activity, and then actively adjust your trading.

It's not necessarily that easy to jump on GameStop. The same thing could have happened to BB. How would you know where to deploy your capital?

Wouldn't you already have been fully invested in TSLA, PLUG, FCEL, BLDP when the GameStop story appeared? This isn't so easy.
 

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Discussion Starter · #70 ·
Stock market lottery. Catch the rocket while it's rising before it starts dropping back into the ocean.
It's an interesting concept and I'm fascinated by stuff like this too. But it would be a whole art & skill in itself.

I've also invested through different phases of the market and I see another problem with this. This kind of approach might be working for the last couple of months, but we're in a very bullish market with speculative manias happening right now.

The market isn't always like that. Especially in a bear or sideways market, those kinds of things don't happen. I vividly remember times in the market in the early 2000s when it seemed like any potentially hot stock you looked at would immediately start crashing. The strength was non existent, and no speculators were willing to keep pumping things higher.

And the last time I remember seeing conditions like today's were maybe around 2004-2005.

So let's say it's feasible (today) to chase some bubble stocks as they shoot higher. These conditions are probably quite rare in the big scheme of things. So I don't see how you can really act on that for long-term investment.

I realize @MrBlackhill you said somewhere earlier (I think) that your focus isn't long term investment but short term gains? If so, this kind of thing might be up your alley.

But for me, I'm concerned with long term investment and getting steady returns over decades. I don't see any viable way to sit around waiting for conditions like these to occur. Does that mean I'd do passive investing in other periods, and then suddenly abandon all that and start jumping into speculative manias when they occur once every 10 years? Just doesn't seem viable to me.
 

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Discussion Starter · #79 ·
Matt Levine has a nice Bloomberg column discussing GameStop and Reddit.

He outlines this hypothetical, honest pump & dump where there is no deception, no fake news, no insider information.
  1. I show up on Reddit and say “hey let’s pump GameStop.”
  2. We all buy GameStop, knowing that we’re just doing it for the pump, with no real or fake catalyst for the stock to go up.
  3. It goes up, because we bought a lot of it.
  4. Other people see us doing this, read my Reddit post, know we are pumping the stock, and also buy it, because we seem to be having fun, and they like fun too.
  5. Eventually some of us get bored and start selling and the price collapses.

But nobody really knows what's going on with GME and BB. There could be more nefarious activity and the SEC could pursue it.
 

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Discussion Starter · #86 ·
Wow. AMC was already pumping after hours from $5 to $7, but it wasn't enough, so Musk tweeted "AMC Next." at 7 PM and then it continue up to over $8. AMC up nearly +66% after hours.

Is Musk trying to pump stocks out of their fundamentals so that TSLA's valuation seem fair?

Are we truly living in a new world of stock investing where social media influencers can so easily manipulate the market?
I think Musk is generally a bit crazy.
 
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