I’ve been actively involved in the stock market for many years now and given the market’s current state of craziness, I thought it would be fun to list out all the reasons I’ve heard or read so far for the market’s continued rise.

  • The Fed (see printing money)
  • Psychological reasons (which may be the most correct)
  • YOLO
  • FOMO
  • Buy the dip, it will always go back up
  • Cheap debt
  • Stock buybacks (not so much now)
  • Short squeeze cycles (look it up)
  • Individual (or retail investors), think Robinhood
  • Gamblers looking for their fix since they can’t go to casinos
  • There is no alternative (TINA)
  • Our glorious King Trump
  • V-shaped recovery
  • Vaccine coming in the fall
  • COVID-19 will just “disappear”
  • The market is forward looking
  • The market is not the economy
  • The economy will be roaring in a couple months
  • Increased Options trading, there are professionals and then there are those on Robinhood… yeah, that will go well.
  • Free trade executions, hugely responsible for all the retail traders
  • Rainbows and Unicorns
  • A whole bunch of other more complicated theories that are difficult to explain unless you are familiar with the terms

It’s absolutely fascinating watching the retail traders who have jumped into the market for the first time. In this environment.

If you are a newbie trader or investor in this environment, it really is gambling. All the things that used to drive the traditional market (like financial fundamentals) have flown out the window. And it was already happening before COVID-19, but it’s even more apparent now.

Bottom line is, no one knows what is happening at the moment and why the market is doing what it’s doing.

There is one thing I think people should pay attention to however; there is a huge amount of “smart” money sitting on the sidelines because they don’t want to touch this market with a ten foot pole.

And I still maintain my opinion (which was my opinion before COVID-19 even started), the current market is like a thick forest which hasn’t been allowed to burn for a 100 years;

When it finally goes, it’s going to be bad.