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this post was submitted on 01 Aug 2024
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Investors pump money in a bunch of companies so the chances of at least one of them making it big and paying them back for all the failed investments is almost guaranteed. That's what taking risks is all about.
Sure, but it SEEMS, that some investors are relying on buzzword and hype, without research and ignoring the fundamentals of investing, i.e. besides the ever evolving claims of the CEO, is the company well managed? What is their cash flow and where is it going a year from now? Do the upper level managers have coke habits?
You’re right, but these fundamentals don’t really matter anymore, investors are buying hype and hoping to sell a bigger hype for more money later.
Seeing the whole thing as Knowingly Trading in Hype is actually a really good insight.
Certainly it neatly explains a lot.
Also called a Ponzi scheme, where every participant knows it's a scam, but hopes to find some more fools before it crashes and leave with positive balance.
If the whole sector turns out to be garbage it won't matter which particular set of companies within it you invest in; you will get burned if you cash out after everyone else.