Meme stocks & Crypto: 2024 is the new 2021

It all started yesterday, when Keith Gill, a.k.a. Roaring Kitty, posted a meme on Twitter after being off social media for 3 years.

It was Helen of Troy, the face that launched a thousand ships. Dare I say, the tweet that launched a couple stocks.

He later posted a clip MCU fans know too well which ends with Thanos saying, “Fine, I’ll do it myself.”

He has since posted a few other clips on his twitter account.

After the tweet, Gamestop and AMC shot up 74% and 57% respectively yesterday and are both up about 120% in pre-market trading today.

AMC was trading at $3.29 a week ago and is trading at about $11.50 as I'm writing. Gamestop was trading at $25 a week ago and is trading at $67. A $1,000 "investment" in either stock a week ago would be about $3,000 today.

Who is Roaring Kitty?

If you're wondering who this person is, the answer is simple:

Before Gamestop became a meme stock in 2021, Keith believed Gamestop was deeply undervalued and bought over $53,000 worth of shares in September 2019. He later talked about Gamestop on his YouTube channel and on Reddit. In 2021, he was able to rally day traders on wall street bets, a popular sub-Reddit in an effort to squeeze GameStop short sellers.

If you're looking for an interesting read, consider the story of Keith Gill who played a role in the Gamestop mania and made over $30 million from Gamestop.

My Thoughts

I find this very interesting because meme stocks are called that for a reason. And for the stocks to once again be driven by... memes, is just fitting.

My next observation is, did no one consider that maybe his account was hacked? After all, the SEC was hacked this year.

But even if he was hacked, would the traders have cared? What if they were just waiting on the sidelines for any opportunity to pump the stock? Did the origin of the tweet matter?

Also, none of his tweets mentioned Gamestop at all. For all we know, he could be talking about literally anything else.

Finally, why now? It's not an anniversary or a special date by any means.

In this article , I called 2021 the financial year of the memes.

The return of meme stocks has made some draw parallels between 2024 and 2021. Similar to 2021, cryptocurrency prices have also been soaring this year.

I think what makes this recent surge more interesting than 2021 is, there's no stimulus. No stimmy cheques being thrown towards bets, no Fed money printer going brrrrrrrrr.

If anything, relative to where we were at the start of the year, the US Federal Reserve have gone a bit more cautious about the outlook for interest rates. This change should have some bearing on risk taking. But it hasn't.

Crypto has soared, meme stocks are back, and stocks seem to be holding up too.

If you remember in 2021, the music kept playing till it peaked in November and collapsed in 2022. Could history be rhyming here?

One interesting thing I've noticed this year is when meme stocks like these rally, bitcoin tends to fall. Could the venn diagram of people who punt in meme stocks and bitcoin be a circle? Could the same people just be shifting cash from one speculative "asset" to another? Or is this just plain old gambling.

Do you remember this $300 billion meme stock that made GameStop look like child’s play in 2022?

A company named AMTD Digital rose over 32,000% in 3 WEEKS. At its peak, the company was one of the 10 most valuable publicly traded companies in the WORLD. It was more valuable than Goldman Sachs, Intel, Alibaba and many other large companies you know.

The IPO price was $7.80 a share. The shares last traded at $3.63 a share at market close yesterday. Which represents an almost 55% decline in the share price since IPO. In other words, if you had bought $1,000 worth of shares at IPO, those shares would be worth about $460 today.

Not to fear though, the stock is up 16% in pre-market trading.

You know what they say about rising tides and boats

Conclusion

The question on everyone's mind is how long could this surge last? 3 weeks? 3 days? What do you think? Comment below your best guess.

One thing's for sure though, the winner in this gold rush are the shovel sellers.

If you need a reminder of why investing out of FOMO is bad for you , check out this article I wrote in 2021, in the heart of the meme craze.

In other news, Jim Simons, one of the greatest investors in modern history, died last week. His fund delivered >39% returns for 34 years.

His strategy involved trading on signals that wouldn't make intuitive sense. Think something along the lines of trading stocks based on the phases of Venus (the planet).

Perhaps the takeaway from all of this is if your view of financial markets makes too much sense then it is probably wrong.