My Canaries in the Coal Mine are Dying…Quickly
I titled this post on June 10, 2020 and then my attention waned, so I didn’t get a chance to write about my experiences until today (5 days later). These market and investing headlines are pretty crazy given that the market was closed 2 of the 5 days since I titled this post:
Something interesting is happening out there in the markets, and it goes beyond the fact that for some reason no one cares that we still have double digit unemployment due to an international pandemic (or more likely it is a result of it). In the past 5 days 3 very real canaries in the investing coal mine of my life that just died.
- A family member, who has absolutely no business betting on broad macro trends (specifically interested in $NCLH) put together a slide deck presentation wanting to put the last of his liquidity into the stock. The thoughts behind the idea weren’t that off, and the fact that he went as far as to make a presentation was actually pretty impressive – it is that this individual has proven time and time again that the basics of personal finance evade him nevertheless to take the last of his liquidity during this time to bet on one company. To make matters worse, I am pretty sure I saw the phrase, “can’t lose situation.”
- A buddy from college, who has been in the rise and subsequent fall, of most of the great (and mini) bubbles in the last 20 years (mortgage business, MLMs, and currently unsecured business loans) called to start his own day trading company.
- We had 3 separate requests for penny stock bets in one of my investment clubs.
Any one of these three things in it of themselves, not a bit deal, but to have them all happen within a few days of each other (number 1 and number 2 happened the same freaking morning), is a odd to say the least. Throw that on top of the swings that seem to be happening daily, if not hourly, something feels wrong. I really don’t like market timing, but after 1 and 2 – I moved about 15% of my 401(k) into cash.
Then you have the headlines that have been going around, including Dave Portnoy of Barstool Sports Fame claiming he is the captain of of the market:
Every few years there are a new crop of investors that come along and rip Warren Buffett for being old and outdated because “things are different this time.”
Is this another time that Buffett will be proven correct?