Analysis: Debacle at Archegos throws excessive risk-taking into spotlight – Reuters

Analysis: Debacle at Archegos throws excessive risk-taking into spotlight – Reuters

NEW YORK (Reuters) - Highly leveraged Archegos Capital's downfall is the latest signal of investors' hunger for risk-taking being far from satiated even after a run that has lifted the S&P 500 index around 80% in a year.FILE PHOTO: A person walks past 888 7th Ave, a building that reportedly houses Archegos Capital, amid the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., March 29, 2021. REUTERS/Carlo Allegri/File PhotoThe impact of the hedge fund's troubles seems to have been limited so far to a handful of stocks - from ViacomCBS and Discovery to the shares of investment banks who dealt with the fund, such as Credit Suisse - without rippling out into broader markets.Yet, there are other signs that the mood has turned exuberant in recent months, leading to potentially excessive risk-taking across asset classes.Among those are the market's robust appetite for special-purpose acquisition companies (SPACs) and the popularity of cryptocurrencies such as Bitcoin. And an 850% rally in the shares of GameStop, fueled by retail investors with the help of options on sites such as Reddit's WallStreetBets.“My guess is we are going to see a whole series of these examples and we