Everyone Thinks They'll Get Out in Time
Nothing so undermines your financial judgement as the sight of your neighbor getting rich.” – JP Morgan
Today’s note is just a compilation of three stories I find entertaining. Each reminds me that, for many people, the line between investing and gambling is very blurry.
A developer gave an AI agent named Lobstar Wilde money and social media access. A meme coin was created that fed additional money to the AI. The AI got rich off the token and accidentally sent $450,000 to a random stranger on Twitter.
That stranger sold the $LOBSTAR tokens, crashing the price, which made the AI lobster go even more viral, and the price rose again. According to CoinMarketCap, there are currently over 12,000 holders of the coin, and the current value of $LOBSTAR is around $4,000,000 (down from a high of roughly $14,000,000).
Polymarket is a cryptocurrency-based prediction market where users can place real-money wagers on almost any event imaginable. One of those wagers is that Jesus Christ will return before 2027.
According to the platform, there is a 4% chance of his return.
These odds (and this bet in general) don’t make sense until you realize there is also a derivative market where people place wagers on how high they can get the odds of Jesus’ return to climb.
Most of the money on the yes side of the trade doesn’t truly believe Jesus is returning. They simply think other people will bid up the price so they can get out at a profit before the deadline.
Any IPO on Nasdaq that is raising less than $15 million is pretty much a pump and dump scheme. And there are a lot of them. Last December, Barron’s published this article with the details. Over 230 offerings below $15 million apiece have occurred on Nasdaq since 2023. Last year, eight were halted by the SEC, and over 20 of the new issues fell more than 60% in a single day.
I suspect there are plenty of smart people who hold $LOBSTAR, bet on Jesus, and buy micro-cap IPOs. But, as I’m often reminded, being a smart person and a smart investor are often two very different things.
Personal note:
My kids’ spring break was this week. We used the time off to take a cruise with my parents.
I’ll be back in the office on Monday.
Thanks again !