Stop It with the GameStop

by Nick Hodge

I wanted to take a couple of minutes and talk about the market action that we've been seeing this week, given that social media — and the media in general — is in a frenzy about what's been going on with GameStop (NYSE: GME) and WallStreetBets.

I just wanted to take a second and tell everyone to calm the hell down and take a step back, and just realize that there's a lot of crazy things that are going on — and have gone on — in the market over the past year and over the past years... and that the market always continues to be the market.

So whether that's the crash we saw last March with the onset of the virus... or oil going negative last year... or frankly the fact that 40% of new IPOs don't make any money... or the SPAC bubble that we're currently in... 

There's been A LOT of wonky stuff in the market.

It's fully attributable to the government and Federal Reserve response since 2008. And since the onset of the virus with their bond buying and dovishness on rates that have led to the destruction of your dollar, which is down 12% in the past year — and the DXY continues to be in a bearish trend.

The market is continuing to go up at record highs because of the liquidity in the system and now commodities are starting to go along with it, as evidenced by copper at eight-year highs and palladium and the battery metals moving; lithium, for example, and rare earths.

I think that the action that you're seeing this week, despite the noise that you've seen about it, is just that — noise.

I don't think we've seen a true inflection point in the market. I haven't seen any major markets have any breakage as far as the bond market or rates or the dollar. The VIX this week didn't even get back to where it was last year in October and November, for example.

And so until I see a major trend change I think it's going to be back to more of the same. And that's energy reinflating, industrials starting to reinflate, stocks at record highs, commodities doing well.

I'm not changing my playbook. I'm not in this whole WallStreetBets thing, either. And you don't need to be. If that's your bag, that's fine. But I feel like that's stress-inducing and way too high risk to put a meaningful amount of capital that's going to ultimately not truly impact your way of life.

So just a bit of a calming message here amid the craziness of this week and the gamma squeezes and the AMCs and the GMEs that have been going on.

But just remember it's par for the course.

We're in an epic stock bubble fueled by cheap money and liquidity that is creating a chance for you to transfer wealth if you own the right equities and stocks related to commodities that are benefiting from this inflation and this transfer.

The GameStop stuff is just a symptom of it. It's not the end all, be all of what's going here in the market.

I hope that gives a little bit of a perspective and clarity of the situation for you.

Call it like you see it, 

Nick Hodge
Editor, Daily Profit Cycle

Nick Hodge is the co-owner and publisher of Daily Profit Cycle and Resource Stock Digest. He's also the founder of Hodge Family Office, the umbrella organization for his three premium services: Hodge Family Office, Family Office Advantage, and Foundational Profits. He specializes in private placements and speculations in early stage ventures, and has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world.

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