In the 1630s, it was tulips. In the 1990s, it was Netscape and Pets.com. Later, as we all know, it was housing. Today, the warning sign flashing “danger,” signaling that the stock market has lost its mind, is GameStop.
And what’s really worrying is that Dow 30,000 is all about this sort of irrational exuberance. Yes, we laugh at $300 GameStop, but is Tesla really worth $880 a share? It isn’t just Robinhood traders working in concert who are driving up company valuations; it’s hedge funds and Wall Street banks research departments and large mutual funds. Because even as we face record unemployment and a slow economy, they can make money that way.
Author: Charles Gasparino
Publication Date: 27 January 2021
Publication Site: NYPost