Tough Love for the “Degens”
I try to catch all the stupidity in the investment world, but I can’t get everything. I’m not trying to be harsh, just giving a bit of tough love. It’s like coaching kids: you give positive reinforcement, but sometimes a swift kick in the pants is necessary.
Today, I learned a new term from a Wall Street Journal story: “Degen” traders. These self-proclaimed degenerates are swarming the stock market, driven by a risky trading style that’s roaring back in popularity. These amateur traders make audacious bets on stocks and cryptocurrencies, often based on jokes and memes rather than conventional investment strategies.
We covered this trend not too long ago, calling it financial nihilism. The term “Degen” is used as a noun, adjective, or verb among young men, tracing back to “degenerate gambler.” It embodies an ethos that values bold market bets and dismisses traditional financial advice. The motto seems to be: “You only live once, so why bother with traditional financial advice?”
The article describes how these traders use online aliases and chat rooms to brag about buying obscure digital tokens, meme stocks, and highly speculative options contracts. When I started in the business, you had to be qualified to trade options. That’s not the case anymore, and it leads to market volatility and disconnects. But for those who handle their finances properly, these are just short-term blips. As JP Morgan said about market sell-offs, “stocks return to their rightful owners.”
These gamblers might get lucky occasionally, but it won’t end well for most. Take Keith Gill, the trader behind the GameStop frenzy. He made a fortune, but the CEO of GameStop is also cashing out as the stock soars. Gill has a YouTube live event today, and his followers will probably buy more, even though GameStop’s earnings are terrible, and they’re diluting their float by selling more shares.
To all the young traders out there: everything in life that has meaning, value, and worth involves work, time, and effort. There are no shortcuts. This is why so many fail. Wealth comes from building it over time, through smart investing and not chasing fads. By dollar-cost averaging and avoiding panics, you’ll achieve financial security and be ready for opportunities in life.
To the degens and gamblers, my advice probably sounds like a foreign language. But it’s the truth.
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