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  1. Home
  2. / Investing

Who Knows When Any of This Craziness Is Going to End?

The best thing we can do is manage our risk and keep our portfolio from a position of blowing up when this does end.
By TIMOTHY COLLINS
Jun 09, 2021 | 12:20 PM EDT
Stocks quotes in this article: ASTS, WKHS, WWE, NKLA, RIDE

Let's not mince words.

I have no idea what's driving the randomness of these moves day to day.

Sure, one could argue we're seeing short squeezes. But that wouldn't explain why some short-interest names are moving while others are stuck in the mud.

Maybe we could argue structure. Small outstanding float names are pushing stocks.

But again, it's not every name with a tight structure or small float.

Mentions on Reddit definitely have an influence, but there's no guarantee there other. The same can be said for social media or CNBC.

Yesterday's big winner AST SpaceMobile (ASTS) is getting hammered today but Workhorse (WKHS) is still green. World Wrestling Entertainment (WWE) gapped up strong on the open and now sits higher by 17%. Because of, um, maybe a rumor somewhere. Nikola (NKLA) : We loved you yesterday but today not so much. But at least we can count on Lordstown Motors (RIDE) to let us down.

Seriously, my portfolio feels like I'm herding cats. Nothing is behaving like it should and if I don't get it under control soon my family room is going to get destroyed and I'm going to be left with nothing but worthless trash. That's my concern with chasing too much here. You're either in the right place and catch something big or play for a quick intraday flip and maintain a small runner overnight. Otherwise, you'll end up starting the day with hopped up kitties ready to go crazy in your portfolio.

One expectation I do hold is we are going to see more and more equity offerings from companies in the coming days. We, well, many of us, have gone from making stupid people famous to making worthless companies valuable. To be fair, I should say making companies overvalued. Many of them do have worth but we're detached from any fundamental measure. Smart executives will see this, acknowledge it, and take advantage of the market financially. And I honestly don't care if they raise cash to stick it in the bank or take a portion of the raised capital and buy Bitcoin or something like Ethereum.

I can't predict when this will end. It will likely be sudden and on some tangent item that ripples into speculation rather than something blatant or obvious. So, don't take it personal when someone is bearish on a meme name you're trading. Fundamentally and logically, they are probably correct in the long-term but not making any money in the short-term. As far as shorting this insanity, it's pretty much the same thing... insane. If you're going to do it, find a way to limit your risk because none of us know when any of this craziness is going to end. The best thing we can do is manage our risk and keep our portfolio from a position of blowing up when this ends.

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At the time of publication, Timothy Collins was Long ASTS diagonal call spread, WWE.

TAGS: Bitcoin | Investing | Markets | Stocks | Trading | Cryptocurrency

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