Where can you make yourself right? This concept is really what the meme stock and the cryptocurrencies and even the non-fungible tokens is about, making you, and your gang of democratizers right about the direction of individual assets. Whether it be the celebration of non-U.S. tender assets this weekend in Miami, or the elevation of AMC (AMC) , the movie theatre company, or the coming earnings of GameStop (GME) this Wednesday, these events are about taking on the establishment, but more important, taking things up that wouldn't go up without them.
Take AMC with $5.4 billion in long term debt and $4.9 million in theatre rent. Last week it raised $580 million through a stock sale of 8.5 million shares. Before that it sold $230 million in stock to a hedge fund where both profited pretty much instantly. The stock, which would normally be crushed by the sales actually roared higher as the crowd of meme stock investors just kept buying and buying. Why not? First, Adam Aron, the CEO, is doing everything right, and I mean everything, to not only pay down debt but grow his movie theatre business, including free popcorn to shareholders. Given the inflated price of popcorn, this perk might actually matter.
Second and far more important, the shareholders who liked AMC at nine love it at $50 because they are overwhelming sellers like nothing I have ever seen. Three weeks ago I warned sellers to step away and let the throng, which is my new name for meme buyers, take AMC up. The higher it goes the more likely that Adam Aron can pay down debt - which is accretive - and buy every chain in the country. To have a monopoly on theatres given Aron the heft no one has ever had. You almost have to do what he wants or else you might never be able to introduce a movie again other than to small movie houses that survive, mostly, at the grace of some rich people, often in the form of charity.
GameStop is not really different. The buyers just simply make the sellers look like chumps no matter what GameStop says about its quarter, which may actually be good given all the new consoles introduced. If I were Ryan Cohen, the putative saviour of the chain, I would say nothing other than there is a plan to expand and takeover some industry-crypto-we don't know? Again, the sellers will disappear because why bother to sell. It's pretty much always worth it to stay long like it did with Tesla (TSLA) and Amazon (AMZN) .
Given that no one has ever seen anything like this it is reasonable to believe that it can stay like this and that the institutional money that was in either stock is long since gone. If that's the case buyers can simply continue to make themselves right as long as everyone stays together.
Let's also make it clear: If you so much as intimate that it is worth taking profits, there will be a world of hurt that visits you, particularly on your twitter feed. It is often repulsive and unreadable but it would make anyone who is thinking of saying something about taking some off the table think again.
Crypto is easy. The number of people who have become crypto millionaires by just holding some form of the alternate currency is so palpable that there's really an unshakeable throng here, too. Again, what good does it to sell. As long as there is a curious alternative, like an unquenchable appetite for our country to keep printing dollars, it makes sense to pretty much everyone as a hedge. I believe in it and think that 5% of your capital should be in an alternative currency, either Bitcoin or Ethereum.
NFT? Rich people have adopted it so less rich want in. Is there a two way market? Why should there be? There are only buyers and no sellers are needed to complete a buy which is much more of an investment than a trade. Do I think these are good investments? Do I think paintings are good investments? Sure. Same with NFTs.
I think it is vital to have one of these simply because it is good to ride the throng. Just as good as riding a stock. Not all, but one. You just have to take your pick. I am agnostic.