The Degenerate Economy…Here Come Supply…
When demand is insatiable, supply is created.
In January, I explained why we were in ‘ludicrous mode’ for the ‘degenerate economy’.
Ludicrous mode indeed. But, if you had told me the portfolio/index would be up another 17 percent (now 144 percent in 2 years) after the dumbest bear market in history and a war with Iran, I would have gladly sold some stocks in January.
I have been explaining all the reasons why this ‘speculation as entertainment’ and ‘degenerate economy’ was happening the last few years, but now supply is coming fast to feed it.
Some examples…
SPAC’s are back doing $MSTR ( ▲ 2.68% ) ‘treasury’ clones with Bitcoin, Ethereum, Solana and other coins. My friend Pomp just raised $750 million to buy Bitcoin for his SPAC – which he did today at $103,000 (ticker $CCCM ( ▼ 4.09% ) )
Polymarket is raising $200 million north of $1 billion for their prediction market casino/exchange. Look for Kalshi to raise next (they are Robinhood partners). Look for Y Combinator to do a whole class of 100 Polymarket/Kalshi/Degenerate Economy startups at some point this year.
It used to be just Wall Street that could create this supply but now you have Pump.fun (we are investors through a fund investment) and 1,000 copycat apps to create a memecoin. I could create a Howiecoin tomorrow and join the supply party but it is not my style.
Instead, to celebrate this coming supply, I will book some profits in my ‘degenerate economy’ index today.
Today I sold some Robinhood ($HOOD ( ▲ 7.51% ) ), Reddit, Coinbase, Draftkings and Roblox. Not that long ago nobody wanted to own Robinhood at $15 (now $80). I shared here that I was buying some Robinhood at $30 during the Trump tariff bear market month and so $80 a few months later feels good to me.
** Here is the portfolio – The changes should show up tomorrow so the positions and position sizes will look borked today.
Guessing when this new mania will be met with enough supply to drown the demand is not something I know how to do so I am just being a prudent conservative old man here. I know I am not a good enough investor to keep doing 70 percent a year picking stocks.
