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Watch this episode:
In this episode, Joe and Mike will talk about:
How Robinhood is being used as a platform for dumb money to manipulate markets.
Companies continue to go bankrupt, but why isn’t it affecting Wall Street?.
Encrypted digital currency and why it’s important?
Another day, another conversation in what looks like a twisted episode of the Twilight Zone. We have large amounts of businesses, small and large, going belly up. The oil industry seems to continue to falter, the Fed continues to print indiscriminately, COVID-19 cases are up, protest and riots now seem to be the norm, and the list goes on and on. One subject we want to touch upon is the current state of the financial markets.
So recently, CEO of Barstool Sports, Dave Portney, has started to daytrade while live streaming for all to see. Dave has been able to influence the price of stocks because of his massive following, even though he has done a terrible job trading. This is currently the trend of what seems to be the era of “dumb money” fueling the markets. ”Dumb money” is a term used in the investing world to identify investment groups or trends that lack financial acumen or infrastructure compared to hedge funds and other institutions. Usually “smart money”, which defines investors like Warren Buffet or Bridgewater Associates, are the ones who usually influence markets. So much so, that when they pull out resources, they can crash the markets. In this case since the last crash in March, “smart money” has played a small role in the markets.
Now, with all the hubbub about how “well” the markets are doing, “dumb money” investors, like your average Joe, are manipulating the market. Not necessarily on purpose, these investors are throwing in all types of money to take advantage of a rise in the stock market. Platforms like Robinhood, have allowed many groups of people, like millennials, play the market. And since the population has gotten an influx of easy money, i.e. stimulus checks and unemployment in combination with extra time on their hands because of quarantine, we have a new casino game within the markets I like to call “Stock Market Roulette”. This trend has created a new phenomenon, where companies that declare bankruptcy, like Hertz, see their share prices increase, instead of going into $0. Even wilder, because of this, Hertz is banking on the idea that they can make more money from this phenomenon by issuing $500 million in stock!
The worry about all of this “dumb money” trading, is that it doesn’t represent what truely is going on in the economy. Once, the market corrects itself and takes a dip, the real worry might set in. Once novice investors see their investment accounts take a dive, they will start selling at high volumes, making matters worse. The overreaction will lead to a freefall nosediving effect that we haven’t seen before and will lead to the worst financial crisis we’ve ever seen.
Since reputable investors expect a huge economic crash in both the markets and monetary system, the best options to protect your assets might be looking into precious metals and cryptocurrency, particularly Monero. With so much turmoil going on around the world like political persecution, cyberhacking, and other issues, monetary privacy is key for protecting your identity and assets. We will take a deeper look into Monero and how it might be the perfect cryptocurrency you may never heard of. Stay tuned for more in our new episode...
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Authors: Joseph Rapisarda & Michael Figueroa 
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