Quote:
Originally Posted by fleury
Here's a question for the investors. When some of this crazy money falls out of speculative stocks, where will it go? I want to invest in that. I'm thinking the banks and other blue chippers?
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Here's two thoughts I had on this. Two options really:
1) The retail investor is here to stay in a big way - Robinhood, and the gamification of the tock market. Most retail does not do a whole bunch of DD, they follow the trend, couldn't care less about earnings multiples or other fundamentals. This will result in less focus on fundamentals and more on sector sentiment. Anything new and exciting that is headline driven will continue to see massive gains.
2) Retail money dries up (stimulus and low interest rates are not forever), bubbles pop, speculative stocks plummet and we see lots of value erosion in the retail side as they were the ones driving a lot of this. Institutions reassert themselves as market movers, the market becomes what it was about 5 years ago with fundamentals trumping all. Institutions are however forever changed with major pressure on the green movement, and social responsibility. This will be a big driving factor on where equity and capital goes.
I am leaning to number 2 more than number 1 but a medium in between is possible as well where retail asserts itself as causing enough volatility in the market and swing trading is likely a more profitable strategy than it ever was before.