Pulse of the Market- 2021 in Review
I've been following the stock market for years (since 2007-2008 meltdown) but this year alone has had more storylines then the last 10 years combined. A month by month review of 2021 below:
January 2021: The Month of the Memes
The craziest month in stock market history. CNBC (mostly Jim Cramer) losing their mind, average everyday folks making millions, and brokerages turning off the buy button to save their companies from being liquidated. A real power shift occurred when individual investors figured out hedge funds were overleveraged in underwater short positions. Here is some proof I knew way back in September 2020 before WallstBets (email sent in October) that short interest was well over 100%.
February 2021: Bill Hwang’s YOLO
The craziest degenerate gambler in the market, Bill Hwang, was levered up by 10x on his $2 billion of capital to amass a fund worth over $20 billion before his fund’s inevitable collapse. Probably wasn’t very smart to YOLO into total return swaps, Chinese tech companies, and Viacom out of all things…
March 2021: WSB (WallstBets) Comes Back Into the Spotlight
After the mayhem in January, the morale on WSB was at all time low as Gamestop, AMC, etc fell from heavens and back to Earth. However, in WSB fashion, the never sell mantra of diamond hands worked as the Reddit favorites rocketed back with a vengeance.
April 2021: Laser Eyes Become Fashionable
If you went on Twitter anytime during this month, you saw pumpers, celebrities, etc changing their profile pictures to include laser eyes. Tom Brady out of all people marked the short term top of Bitcoin (plunging 50%+ from its highs) and that couldn’t be more fitting.
May 2021: A Dog Coin Makes it to SNL
This was the dumbest month as people on Tik Tok, Twitter, etc were calling for Dogecoin to $1 as Elon Musk joined SNL to pump a Dog coin to millions of viewers. Well it tanked down to as low as 15 cents after Elon made several jokes and said “Dogecoin to the Moon” a couple of times.
June 2021: Inflation is “Transitory”
The Federal Reserve Chairman, Jerome Powell, has printed so much money in 2020-2021 that he started to use the word “transitory” or not permanent to explain how his reckless monetary policy has allowed food, gas, consumer good prices to skyrocket under his reign.
July 2021: Robinhood’s ($HOOD) Pump and Dump IPO
As the stock soared on IPO day, executives were already selling shares after the CNBC pump. After the pump, Robinhood filed for a secondary share offering, cratering its price well below the initial IPO price, typical of the brokerage’s already tarnished image.
August 2021: JPEG Monkeys Take Over
NFTs (Non-Fungible Tokens) took the world by storm as kids were flipping pictures of monkey’s with laser eyes for thousands, if not hundreds of thousands of dollars. While this can be seen as a bubble for some, the underlying technology is only just being discovered.
September 2021: Oil Goes to the Moon
When there is less supply due to supply chain disruption, and rampant demand due to economies reopening after a prolonged shutdown, it creates a perfect storm for a rapid increase in oil prices. Oil had its highest close ever since October 2018 to around $78 a barrel.
October 2021: Trump’s SPAC, Shiba Inu, and Tesla’s Return to Glory
In typical 2021 pump and dump fashion, Trump’s SPAC pumped to over 12x at one point, Shiba Inu Coin pumped then dumped by 70% plus, and Tesla returned to an all time high of $1200 plus before an inevitable dump.
November 2021: Elon’s Twitter Poll
The richest man in the world and CEO of Tesla, Elon Musk, wanted to show politicians that a proposal to tax unrealized capital gains was illogical. So in Elon’s eccentric way, he let Twitter decide whether he should sell 10% of his massive Tesla stake worth billions.
December 2021: The Calm Before the Storm
As high beta tech companies return to the mean (trading at ridiculous 50x or more price to sales multiples), people are starting to realize FOMO and listening to Tik Tokers giving financial advice wasn’t the smartest move in the world. With a taper looming, and Jerome Powell being re-nominated as FED chair, will he finally kill this market for good? Only time will tell….
And that’s my year in review. Hope you all enjoyed the craziness as much as I did. Cheers to a new year of health, happiness, and hopefully some green retirement accounts! And thank you for the kind comments and interactions. This is just for fun to improve my writing but I do enjoy dialogue.