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Meme Stocks

Observant1
edited July 25 in Other Investing
Social media speculators have recently turned several stocks into meme stocks.
These so-called "DORK" stocks are: Krispy Kreme (D), OpenDoor (O), Rocket Cos. (R) and Kohl’s (K).
Meme crazes occur during periods when investors exhibit great market enthusiasm.
The VIX fell below 15 on Thursday—its lowest in five months.
This is a dramatic decrease from early April when it topped 60.

"What comes next? Goldman’s research says exuberant times can get more extreme for a while.
Over a 35-year horizon, sharp rises in speculative trading have preceded above-average three-,
six- and 12-month returns for the S&P 500, after which the market has faltered."

"The return of meme stocks might fit that timeline again,
but it’s a warning to edge closer to the exits before the music stops."

https://marketsam.cmail20.com/t/d-e-sukhthd-duklntldl-r/

Comments

  • hank
    edited July 25
    Thanks @Observant1 for the post. I thought the point on the VIX noteworthy.
    -

    Opening lines from Bill Fleckenstein’s commentary tonight:

    ”The tractor beam was at work towing stocks higher once again, with the Nasdaq up almost 0.5% and the S&P about half of that. There was no news to impact trading, and it continues to be the case that the passive bid and mechanical flows just keep grinding the market upward.”


    From ”Mechanical Flows” - The Daily Rap for Friday July 25, 2025
    (Subscription Required)
  • hank
    edited July 30
    d

  • hank
    edited July 30
    Here’s an article that appeared on Bloomberg last week. I wasn’t able to obtain a clean link to it until Yahoo republished it.

    Yahoo Finance - “Return of Meme Stock Mania Has Traders on Alert for Market Froth”

    Related - I spent a lot of time today looking at BAMBX which has fallen off a bit the past couple months. All I could figure out is that it must be the market neutral portion dragging the fund down. About a quarter of the (mostly income oriented) fund is held in a “market neutral” sleeve that shorts “low quality stocks” and goes long high quality ones. It’s supposed to be an intricate balancing act and provide stability. But it looks like the meme craze may have upset the wagon. - “The best laid plans of mice and men often go astray.”

    FWIW - I’ve run comparisons to PONAX and CVSIX. Similar risk / return. BAMBX still holds a slight edge at 10 years, but lags shorter term.
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