As speculation has become in vogue as of late, I will engage in my own speculation, on the topic of speculation as well at what follows speculation. This is all speculative, of course, but I think it will age quite well and be good speculation rather than bad speculation. In fact, I’m so sure of myself that this speculation cannot really be called speculation at all, but until it is proven not to be speculation, and rather fact before fact, it will be seen as speculation and so I will call it speculation. And, on the small nonexistent chance that I am wrong, I will have covered myself quite nicely by saying what I’m saying is speculation and not fact, as being wrong about speculation is part of the game of speculation. With that said, I will now begin my speculative essay on speculation with regards to the nature of speculation.
Speculation is a valid form of activity in its proper context. That context is one where somebody who is intelligent and has some edge or knack for seeing things which are not easily seen can pre-emptively position himself to benefit from some event that has not yet happened. It is gambling, in that there are always unknowns and cloudy variables which make a speculative bet risky or uncertain in some manner, but the return on the bet being correct is disproportionate to the risks and uncertainties which might lead the bet being incorrect. Speculation is largely seen as an economic activity, and this economic speculation is the focus of this activity, but we all engage in speculation in our day to day lives with financial and non-financial choices, since we do not know all variables in life or our environment.
Economic speculation is something that should generally be left to experts and smart people who have some edge in some form. The general public does not fit this category; the general public is quite dumb, emotional, and led by their nose by external impulses which push them this way and that. It is not flattering, but the general public are pigs rolling around in slop and feces more than sentient beings with choices emanating from somewhere inside them. As such, it is a disturbing sign of some underlying societal issue when these pigs start focusing on speculation. That is what is now occurring.
To the general public, speculation is gambling. It is like going to a casino and betting at the roulette table. There are TA charts and blogs and podcasts that the general public interfaces with in the process of speculation, but these are all pretty much emotional and psychological justifications for behavior that is just gambling. These things help the general public tell themselves that they are not gambling -- that they are not trying to find an “easy fix” to money, that they are doing something respectable instead of degenerate and desperate.
The main issue with the general public’s increasing interest in “speculation” (gambling), whether that be in the form of stocks or now crypto-currency, is not the “speculation” (gambling) itself, but rather what is causing the increasing interest. There is an inherent risk factor associated with speculation that makes it something which most normal people averse to doing. This risk aversion, although it is overly strong in most people, is a natural and smart evolutionary trait that is prudent in its proper amount.
Most people are afraid to take any risks at all, so for speculation to rise in general popularity there has to be some fundamental problem causing them to throw caution to the wind. That problem is that the middle class is dying, and nearly everybody in it can sense this on a fundamental level. The traditional means to make a living with some dignity or self-respect have all but been removed for those without family members with connections to government or equally corrupt orgs. There are no longer easy slots to fill that allow for any decent standard or living, or more accurately those slots are quickly disappearing or being sectioned off to a lucky few. Everybody outside of protected clans knows that any security they have is going the way of the Dodo and will soon be extinct.
With job security and career dignity a thing of the past, people who are paying attention know that they cannot ensure any decent standard of living for themselves -- and especially not their children – if they continue living the status quo life pushed on them. Things might be hard now, but they’re going to get increasingly hard as time goes on. This is an anxiety or panic or fear generating realization, and in times of fear or panic, risk aversion begins to be overridden, and as this risk aversion is overridden, things like speculation become attractive. If you think you’re going to die if you don’t have a million dollars in the next hour and you only have half a million right now, the most logical course of action becomes going to the casino and betting on roulette. If you lose it doesn’t matter. If you win you survive. That is the logic and motivation behind the general public’s increasing interest in stocks and cryptocurrency, even though most of them don’t realize it yet.
As goes with degenerate gambling, general public speculation ends in varying degrees of disaster and ruin for most people who engage in it. This current and growing wave of speculation (really just gambling) will end in varying degrees of disaster and ruin for most people. Unfortunately, there is also the tendency for those who take unwise risks not to broadcast their unwise risks and the results of those risks, so as more and more people negatively impact their lives through degenerate and unwise gambling they call speculation, their outcome won’t be spread or pushed to warn people considering doing the same thing who will, on the whole, end up with the same negative outcome. Also, those who take risky and unwise bets that luck into being right will be focused on and serve to amplify the greed and misplaced hope for success which will further pull people on the edge into bad choices that they would otherwise refrain from choosing.
As with any game that is partially skill based and partially luck, the longer it goes on, the more that people who are actually relying on skill rather than luck will win. There will be large portions of the public who luck into good bets with crypto or stocks, but most of these people will stay in the game long enough that their gambling driven approach punishes them and all their initial winnings are redistributed to professionals who don’t make up the general public. We are still in the period where people are making bad bets that pay off enough that they think they’re making good bets, and this furthers interest in speculation for the general public, but eventually the odds will be ground out over enough iterations that nearly everybody in the general public is punished harshly.
Eventually, and this has not yet happened yet, the air of speculation that has turned everybody into a daytrader and the next Gordon Gecko or Jordan Belfort (who made their money through corruption, lies, and illegal behavior rather than gambling) will turn sour. Just as greed and dreams of success have filled the air to drown out the base level desperation that is coating everything and everyone in the middle class, realization that losing the speculation game is possible will eventually replace the greed and dreams of success. At that point, panic will set in and people will rush to exit markets and do whatever they can to close their positions. This will be quite ironic in its own way, as this is the time to generally buy stocks or cryptocurrencies, as things will become quite undervalued and people will be making poor decisions. Once again, the normal people who have tricked themselves into thinking that stocks or crypto will save them from their impending doom will self-harm in the form of leaving speculation entirely, and the people who are professional and actually speculating will benefit.
Greedy bubbles of speculation are nothing new, but this current bubble of speculation (which is just getting started even though it will pop before it bubbles to its full size) is motivated more by despair than greed. The greed is a gold leaf wrapping hiding the core, which is desperation. The desperation is not loud enough yet, it is not visible enough yet, but eventually it will be. Unlike other bubble pops, there is no functional or healthy economy to return to. There is no institutional integrity that will allow for people to pick up the pieces. Those who go bust in the market will quickly realize that even though they haven’t died from losing on their speculation (really degenerate gambling), they might as well be dead. This is when despair will really set in. This is where the implicit future becomes explicit, where the fears and misgivings about the future are realized and made manifest.
This is where drug addicts and explicit gamblers become the norm. This is the failure mode that doesn’t end. This is when the people who deluded themselves into thinking their stocks and crypto gambling was “fundamentals” or information based and honorable realize they were just gambling and either kill themselves, work some miserable job and live in poverty until they die, or self-actualize as a gambler and go to explicit gambling. The people who kill themselves or consign themselves to a life of a peasant with crushed dreams don’t matter, they have essentially removed themselves from the speculation equation, but the ones who self-actualize now begin to feed the beast that is the vice industry, specifically gambling institutions.
Once again, this final phase of public speculation manias, naked gambling, is fundamentally different than prior public speculation manias. Firstly, it is different because of the fact that there is no real path to recovery or gainful, dignified employment. This makes the naked gambling more sticky and drawn out than in other times. Lastly, and more impactful, is the fact that gambling has been digitized and can now be accessed from home. Furthermore, states across the USA where this speculation bubble is really taking root and blooming are all beginning to loosen their restrictions on or legalize digital gambling. Over the coming years and decades, most of the losers of the public speculation mania, and there will be tons, will turn to gambling and other forms of vice that afflict those with no hope.
As such, if you want to speculate, buy stocks like Penn National with strong public figures that are doing online gambling in the USA and will take the lions-share of the people who get their hopes and dreams and futures crushed by their speculation (really degenerate gambling) in the coming months, years, and decades. This is not financial advice, and if you want real financial advice then just work on something real and create value, then slowly put money into crypto and stocks and forget about them for a few decades. It is also not moral advice, as making money from vice industries probably puts a karmic curse on you and your children and their children that isn’t worth whatever you make. There is no good future coming and the current bull markets and speculation mania is going to end in tears and pain. The best thing you can do is disengage from it unless you have some unique perspective and intuition and are willing to lose everything. Protect your future and invest your energy into actual projects and endeavors that produce value. Everything is only going to get harder, most people aren’t going to have a good life, every second you waste daydreaming about riches or becoming the next Wolf of Wall Street is years of work that your grand-children will have to do to have any dignity in life.