Messianic. That's the word I have been searching for when it comes to parts of this market -- and messianic has got me worried, because these are pieces of paper and not much more.
What do I mean by messianic? It means to me that there's a cohort in this market that thinks it's a sin to sell anything and, when you do, you are betraying a cause. That's what I am seeing right now with the blinding light of cryptocurrencies, any cryptocurrencies, and it is beginning to make me wonder if some of these followers are on a mental quarantine, especially in their ability to ignore any sign that perhaps enough may be enough for now.
We first saw this messianic behavior when the WallStreetBettors started embracing stocks. We saw an intense tug of war between those who wanted the stock of Gamestop (GME) to go to the moon on a rocket ship and then there were others who dug in their heels, betting the darned thing had to go down. It was epic, and bettors broke the shorts and profited handily.
They succeeded, because they demanded fealty, fealty to the false idol Ryan Cohen, the co-founder of Chewy (CHWY) , a successful direct-to-consumer pet business, who bought a big stake in the company and joined the board.
They cheered his every move, they even cheered his silence and when they broke the shorts the stock climbed to $400 before sellers at last appeared. The sellers were apostates, even at those exalted levels. Don't I know it, I called in from my hospital bed, ripping out my catheter to have some dignity and told people to take something off the table, anything.
For that I was branded a fool, a knave and a mountebank, because I didn't see Ryan's vision, not that it was available, and I have been on the wrong side of "yolo" ever since.
When I wanted the company to sell stock to fix its balance sheet, I took it on the chin from all sides with a Twitter mentions column that was filled with invective and ad hominem attacks. How dare I suggest that the company should sell some stock to pay down debt and fix its balance sheet. And then, today, when they paid down debt and fixed the balance sheet, the move was met with cheers, because of the Great Man Theory, Cohen being a great man who can do no wrong even if it was something I suggested that was very wrong, because it came from, well, me. That's messianic.
We saw it in the struggle to keep AMC (AMC) alive, with angry opprobrium toward Adam Aron, who decided to save the company on the backs of true believers who demanded, Mel Gibson like in "Braveheart," to hold. It's hard to hold if a CEO is asking for authorization of another 500 million shares, but hold they must for a greater AMC, or at least the stock, because like chain Gamestop in itself, the actual movie theaters seemed meaningless to the AMC co-religionists.
But, now, messianic behavior may have been taken to new heights with admonitions that only true morons would sell any cryptocurrency, not just bitcoin, but Ethereum and even the made up Dogecoin, because they didn't get the cause. You disagree with the orthodoxy, you run the risk of being excommunicated. Hence the back-and-forth I had with David Faber today about "where are the sellers?" We couldn't believe that, together, we couldn't recall anyone coming on air saying they were a seller of anything crypto.
Which brings me to Coinbase (COIN) . You know I like this. I think it can go up to $600, the target the best analyst on Wall Street, the ax, Lisa Ellis from Moffat Nathanson. But you know my principal worry is that this new god would be so powerful all of the true believers to sell whatever was necessary to buy except crypto, whether it be of the bitcoin or the Ethereum or even the much-hyped Dogecoin. Yes, Crypto gods forbade sales and their servants obeyed and seemed to sell everything else to have enough money to buy this very good company's stock.
I have said endlessly there would come a time where we would at last have a deal so large that it would absorb and even overwhelm the market in its power of persuasion and I think we have found it with Coinbase.
Now, not for a moment, am trying to smash this new idol. I think it is the best way for institutions who can't own crypto to get exposure. It covers the waterfront of crypto.
But I think the lack of sellers of bitcoin itself has gotten totally messianic and I now believe, even though I own some and have been reluctant to sell myself, that we are really worshiping greed. And, unlike in the movies, greed is not good.
When you get messianic, you forget what's around you. Maybe you are a single-issue buyer - just crypto, or non-fungible tokens or just GameStop - and you tend not to see what's all around you.
But I approach stocks with my eyes open and the idols cannot prevent things from going wrong that can hurt their cause, things like the price of oil, which must remain tame and stay around $60 lest it wake up the real devil of inflation that, will cause the pressure to be on the Fed not to keep rates down the moment we get a couple of strong employment numbers. The weak ones allow Powell the luxury of staying easy. A spike in oil will drive producer prices much higher if some other prices, like those of plastic and lumber, don't start coming down. You cannot have oil be the leader. It's one with no followers and as much as I like Pioneer (PXD) and Chevron (CVX) , I don't want this group to be on fire. Its the most false of gods.
I said on Tuesday that we were selling stocks for my charitable trust, because I was worried that we were overbought and because there could be too much new supply from underwritings and not enough sellers of crypto, causing everything else to be sold.
I am not a bearer of doom. I saw some terrific things happen Wednesday. Goldman Sachs (GS) reported a number that could be an harbinger for $40 a share, something take that $337 stock to $400 and it would still be inexpensive at ten times earnings. Charlie Scharf, the CEO of Wells Fargo (WFC) , told a bad enough story that there's plenty of upside as he works his magic to make the bank better than it used to be. I know, low bar, but we will take it.
And, again I think that Coinbase is a real company with real controls and real customers, millions of them, and I am not, for a moment, smashing it, but I can't deify it. That's just wrong. Institutions selling for Coinbase, individuals selling for single issue stocks, or for any crypto currency or nonfungible token - which gives you a digital something that you hope you can get someone else to buy, they are all putting pressure on stocks.
And right now, the non-believers don't have enough money to buy stocks unless they are put on sale.