“Foolish Consistency” In Today’s Markets

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The American poet and writer Ralph Waldo Emerson once wrote, “Foolish consistency is the hobgoblin of small minds.” While the stock and risk mania has continued throughout 2020 and into 2021, as evidenced by sky-high valuations in much of the tech arena (i.e. FAANG stocks) and the record number of IPOs in 2020 (480 in the U.S. and during a pandemic no-less), we have certainly seen “foolish consistency” while investors continuously suffer from the “fear of missing out.” The evidence seems endless. Look no further than Tesla’s TSLA market value well-above $700 billion, which now exceeds “the world’s top ten automakers’ stock values combined, even though those companies produced 140 times the number of cars that Tesla did last year,” according to strategist Fred Hickey. Hickey also highlights the popular ARK Innovation ETF nearing $18 billion in size, which is double the size from the previous quarter! Naturally, its largest holding is Tesla. While reminiscent of the dot.com internet era of the late 1990s, the ultimate parabolic mania has been in the cryptocurrency darling Bitcoin, as the pervasive irrationality has seemed to hit a peak.    NEW YORK, USA - DECEMBER 16: Charging Bull Statue is seen at the Financial District ...read more...