Happy Anniversary $TSLA Kid
Who knew the crazy road we were about to travel?
It’s hard to believe that at this point last year, the Dow Jones Industrial Average closed at all-time highs after a 15% rally off its October 2019 lows. Fast forward a year later - to the day - the Dow closed at all-time highs again. This time after a 20% rally from its October 2020 lows.
Statistically, it’s hard to ignore the similarities. For all of us that lived it moment to moment, we know the world is a different place. Yet, it doesn’t mean we won’t be skeptical of what may lie ahead in the markets and look back at 2020 for reference.
Over the coming weeks there will be dozens of articles written to commemorate last year’s epic Covid sell-off. CNBC’s Michael Santoli kicked off the anniversary this weekend with ‘A look at the state of the stock market one year since its pre-Covid peak’. As always, nobody is better at explaining and putting things into perspective than Michael.
Michael is quick to note one of the biggest changes...
“Another way that things have changed in a year is the headlong rush of smaller investors into the market, feeling invincible after making it through the crash and riding a near-80% rebound in the S&P 500.”
Personally, this was the biggest change I experienced. I am the father of one of those “smaller investors”. This week marks his anniversary in becoming an official “stock man”.
The Tesla Experiment
Most of you have heard the story before - some ad nauseam. It started as an innocent tweet about my son Kevin’s interest in buying $TSLA after its meteoric rise. I never expected it to morph into such a topical and entertaining story.
When it started, he was caught up in the euphoria of a rising market and a hot stock that appealed to him and his high school friends. So I gave into his curiosity, and new found financial interest in the stock market, and bought him a share of $TSLA.
I chronicled the journey on Ramp Capital’s 330ramp.com blog here with a follow up post here.
The point was to explore the highs and lows of speculative investing. Within weeks we hit every emotional peak and valley - mission accomplished!
What I didn't see coming was that he was ahead of the curve. His foray into the market was just a small sign of things to come. After the Covid collapse and subsequent stimulus checks, we saw a wave of “Kevins” come into the market.
Where We Are…
As this new wave of investors has gained credibility and influence in the current market cycle, I now go to Kevin for advice as to what is hot. It’s amazing how the tables have turned.
He frequently checks in with a list of hot stocks to watch. Where does he get this list you may ask? Good question! He’s on TikTok, Instagram, the Discord chat and is also a follower of Reddit’s WallStBets. One example of his list of hot stocks was this gem I chronicled back in November…
So upon writing this post, I decided to revisit this tweet. My head exploded after doing the math. Here are the highlights of his 14 picks…
Worst Performers - $AMZN +5.7%, $BRK.A +7%, CVS +12.5%
The Indexes - S&P 500 +7.5%, DJIA +10.6%
Best Performers - $SUNW +248%, $JMIA +152%, $BLNK +126.8%, $PENN +70%
All 14 stocks were up! His average gain was 64.65%.
What’s Next…
He wants to run my money, create his own hedge fund, get an agent and a regular spot on CNBC’s Halftime Report. I say this all in jest, but the kid, and many like him, are HOT. They have their pulse on what’s trending and moving markets. Some even think they are the ones moving the markets.
I keep hearing this will end badly. That this is yet another perfect example of the current bubble environment. Maybe, it is. I agree it won’t end well for some, but those of us with more experience need to guide the newer investors through the potential risk of a down turn. It won’t always be this easy, but it doesn’t mean you can’t enjoy the ride.
`
when does your son start a sub stack ;-).
It's such a wonderful story Jay! I think many of us that have had a career in the investment biz started exactly the same way as your son. The 'hot' stocks just varied depending on the decade!