2021 was the very best year to Get Rich Dumb. I blame this on two things: boredom and a desire to get-rich-quick. The Fed was busy handing out their $1,200 stimulus checks (aka free money) that literally came with no string attached. And, with all the never-ending lockdowns this gave many people much more time on their hands. Put these two (very powerful) things together and you get one extra-large cocktail of market madness.
The Fed turned on the money printer to prevent a widespread economic recession. They pulled out all the stops to protect their economy, their people and their jobs. Oh, and their beloved stock market! This in turn not only propped up literally every single asset class (from Bitcoin to bricks ‘n mortar) but it put money into bored – and frankly desperate – hands.
So, let’s take a dive into five of the many dumb ways in which you could’ve made it Big during 2021 from meme stocks to joke coins. And trust me, this one’s no joke!
#1 Struggling firms
The first dumb way in which you could’ve made money this year was by investing into failing companies from the likes of GameStop and Nokia. These companies were so heavily shorted (no surprise there!) which made it all the more exciting spurring on a whole bunch of Redditers (from that WallStreetBets forum) to come together to try and cause a whole lotta pain to some of the guys shorting this stuff.
Now since all these companies are pretty rubbish, a whole bunch of hedge funds were busy shorting it. Aka betting on the share price going down. And until these Redditers came along, this trade wasn’t such a gamble.
These guys managed to cause a ‘short-squeeze’ i.e pushing up the prices of the most heavily shorted stocks in the universe – GameStop (and then the AMC sequel). The Little Guys ended up putting some of the Big Guys in some deep trouble. Some even had to get bailed out. It wasn’t looking good.
But in the end, the Big Guys enjoyed the last laugh. Robinhood suspended the trading of GameStop and AMC which meant that the Little Guys ended up losing big time. The once untouchable stocks that never stopped climbing kept crashing down to earth.
Yet had you been slick enough to have gotten in and out in the nick of time, you’d have made a killing. You could have got into GameStop on 4th Jan, after reading that WallStreetBets Reddit thread post of October 2020 and bought a whole load of the stock. You’d have sold this struggling videogame retailer when it hit an all-time-high of $327. Boom. Money made. Now wasn’t that easy?
But if stocks aren’t really your thing, don’t worry! 2021 had you covered. You could’ve made a ton of money trading joke coins like Doge or worse, Shiba Inu. Joke squared.
Let’s look at Doge.
#2 Dogecoin
Dogecoin (or should I say, Eloncoin) was initially created as a joke. Back in 2013, two software engineers (Billy Markus and Jackson Palmer) decided to create this payment system called Dogecoin.
But it was designed to actually make fun of all the wild crypto going on back then (and today!). This coin features the face of a Shiba Inu dog who, by the way, experienced record sales since the price of the coin spiked. It was the first ‘meme coin’ and it was quickly taken in by Elon Musk. And, as you can imagine, it was heading straight for the moon.
So, here’s how you could’ve made a real killing. Quite fitting, you buy on April fools’ day (because what better day to buy into a joke than the Day of Jokes). This is at $0.06. Meanwhile, Musk (its godfather) posts a bunch of tweets that send the currency flying to $0.72. If that isn’t crazy than I dunno what is.
But the craziness ain’t over yet, folks.
#3 Shiba Inu coin
The third way in which you could’ve made some real buck was by ‘investing’ into Shiba Inu coin. This coin was created in August 2020 by an anonymous fella who goes by the name of ‘Roshi’. This coin was basically intended to overtake Dogecoin and essentially be a ‘pump and dump’ scheme. This coin dubbed itself ‘Dogecoin killer’ and it instilled a whole lotta excitement in many people.
FOMO retail traders hopped onto this train, too. After all, they didn’t wanna miss out on the great wealth distribution! It surged in October 2021. Its value increased by 240% over the week but by beginning of November it fell, losing 50% of its value.
The coin listed at $0.0000000005. Practically zero. But, give it a year and it hit $0.00008. Some eye-watering stuff. Every dollar became over $100k. OUCH. But hey, least you can save yourself from telling your parents you made your entire fortune off the back a joke coin!
#4 Trump’s SPAC
Isn’t the world kinda boring (and quiet!) now that Dolald Trump is no longer Mr President? Well, don’t get too sad ‘cause he came back. In a slightly different guise. His media group (Truth Social) went public via a SPAC (a blank-cheque company).
The valuation of this company was based (solely) on Trump’s following and fans. Not based on traditional metrics like revenue, media content or, better still, a functioning website!
Well, anyway here’s how you could’ve made money on this not-quite-money-making company. You buy on 27 October (when it goes public) at $10.50 a share. And guess what price you sell it at? $100? Guess again! It hit $175 the next day. By which point you’re hella outa there.
#5 NFTs
NFTs (non-fungible tokens) literally blew up this year. And they’re still on fire. They’re basically a form of digital ownership for anything from giphs to jpengs. You may ask why on earth anyone would pay big money for the rights to a digital asset that pretty much anyone with WiFi can download?
Well, they’re bragging rights guys! If you own a whopper NFT, you get to brag about it since you’re the only one actually who owns it. And for some, it’s worth its weight in, well, NFT.
And while there were many ways you could’ve made money on NFTs none was better than the CryptoPunks. These funky pixel-like giphs literally sold for millions. I literally wonder who on earth is spending real money on this stuff. So, you could’ve picked one up for $20,000 and sold it for $1.2 million. Don’t mind if I do!
All in all, whether you’re looking at GameStop or Shiba Inu coin, they’ve come back down to earth because what comes up, must come down.
I bet you lot are all getting rich. But slowly. And that’s the way to go. Not by being lured into ‘pump and dump’ schemes or by utterly worthless meme coins. And while FOMO is a really powerful emotion (after all, it’s what brought all these folk together), it can cause us to do stupid things. Like trading nonsense.
So, while you may feel a little bummed you hadn’t quite Made it Big on all this stuff, be grateful that you weren’t the idiot. The last man standing. Holding the bag.
On that note, Happy Wealth Building dear readers!
Slow and steady does it guys, slow and steady.
Disclaimer: This blog is not investment or financial advice. It is my opinion only. This blog is not a personal recommendation to buy/sell any security, or to adopt any such investment strategy. Always do your own research before you commit to any investment.
Knead Your Dough 