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September 27, 2018, 10:29:06 PM |
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The economist John Maynard Keynes wrote: “The game of professional investment is intolerably boring and over-exacting to anyone who is entirely exempt from the gambling instinct; whilst he who has it must pay to this propensity the appropriate toll.”
Ever since the crisis, the message to investors has been to embrace the “intolerably boring” style: Index. Rebalance. Diversify. Rebalance again. Reduce your fees. And don’t be so foolish as to think that you, sitting at home, could ever hope to win by picking individual stocks. Investors who have internalized this message have done phenomenally well in the post-crisis years, amid a long and steady—even dull—bull market.
But the gambling instinct can be repressed for only so long. And lately we’ve seen the emergence of strange new bubbles And, yes, I’m talking about crypto and cannabis. The wild trading in shares of Canadian marijuana company Tylray Inc in September—in which its market value briefly exceeded that of American Airline Group—felt a lot like last year’s Bitcoin frenzy. Despite their different paths, the crypto and cannabis bubbles are unmistakable siblings.
Spend a few minutes on Reddit pages devoted to Bitcoin, cannabis, or trading, and you can see the overlap and similarities of the communities. According to TD Ameritrade Inc., trading in pot stocks is overwhelmingly done by millennian-aged males. The stats for crypto look the same.
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