One thing, OK, one of many things, bred from the influx of new traders into the market combined with the hot chasing of small niche stocks is impatience. I don't care whether you take electric vehicles, non-fungible tokens, or even biotech.
For instance, think back to the numerous electric vehicle companies that have come public recently through SPACs -- special purpose acquisition companies. Many of these companies are pre-revenue names that are building out platforms, searching for partners, and focused on pre-orders and design; yet, despite investors and traders knowing this, I watched complaint after complaint shower social media about the lack of news or press releases from the companies.
Fast-forward to any company recently announcing an NFT initiative. We've watched the price spike initially, followed by a period of cooling off. During that time, I've heard from execs that are getting nasty notes essentially boiling down to "do something."
The irony here is that's the wrong move for the company.
The complainer doesn't care. They simply want a pop to sell the stock, but the company needs to do some actual planning and execution, not simply issue a fluffy press release saying little and meaning even less. If a company is going to grow and evolve in a new sector like NFTs or EVs, the moves need to be made with vision and with a plan. Smart investors will see through empty press releases. The stock will retrace sooner rather than later, and the company will be left with a broken stock. That's not a good thing for the company or the shareholders.
But some execs get caught in this game. They get caught watching the day-to-day action on the stock, letting the chirpy short-term shareholders get in their head. It's a mistake both by the shareholders and the company.
We've lost sight of the patience required to actually build upon new ventures and new initiatives. If a company announced a move into NFTs two days or even two weeks ago and you're selling in the hole because you've lost patience, you should have never been in the trade to begin with. More and more, I'm seeing lost sight on why an investor entered a name. The goal becomes to push for a barrage of press releases, no matter how useless, simply to flip the name.
We should want to see companies properly plan and execute. Trading is great. I do plenty of it. But real wealth is built over the longer term, finding a story has potential and management that can execute within a realistic vision rather than the headline snatching releases traders want to see so they can sell and move onto the next trade.
