Wall Street Is Now Dumping It's Junk On The Regular Investor | Lance Roberts

**Lance Roberts** (0:00)
We've got a market where Wall Street is bringing product to market as fast as they can. They're dumping all the crap that they don't want on their books onto the retail investors. The retail investors are going, hey, give me more. And they're like, great, I can finally get this off my books. And this is bonanza time for Wall Street. They're loving this. They're cleaning up their books, they're getting rid of all these crappy companies, they're going to go into the public market privately, et cetera, getting them sold off. But that is very late stage activity. So whether it's six months from now or a year from now, we're probably going to have another 2022 type environment. I would expect that. But it doesn't mean we can't make some money between now and then. I just think you need to be aware of the... If you're piling onto a lot of risk and really not paying attention to it, I think that's where your risk is.

**Adam Taggart** (0:51)
Welcome to Thoughtful Money. I'm Thoughtful Money Founder and your host, Adam Taggart, welcoming you back at the end of the week for yet another weekly market recap with my good friend, the Polyanna-ish portfolio manager, Lance Roberts.

**Lance Roberts** (1:04)
Yes, yes, I am here.

**Adam Taggart** (1:09)
Actually, I don't think Polyanna-ish is an adjective that really applies to you, Lance, but I was just trying to think of a word for the markets these days. They continue to be very happy hanging out here at or quite near all-time highs. Everybody thinks earnings are going to be great going forward. Market seems not worried at all about inflation, about the slowing economic growth that you've talked about. You, I think, still have some concerns about correction risk. Market doesn't seem to have any.
So, let's start there. I guess, I titled one of our thumbnails for, it was like two or three weeks ago, for one of these weekly recaps as Echoes of 1999, because you were talking about the return of just high level degrees of speculation in the market, which is still there. The more I look at this market, the more I'm feeling like I'm hearing Echoes of late 2021

**Lance Roberts** (2:11)
Some of that too. I mean, definitely, the meme stock chase is back. Bitcoin, cryptocurrencies, that whole chase is back. There's a very, very high correlation between cryptocurrency, or Bitcoin in particular, and the NASDAQ. So they just kind of move lockstep whenever there's a lot of exuberance in the markets, Bitcoin is doing well. So yeah, then that was very similar to what we saw in 2021, along with we had SPAC issuances back then. We've had a lot of IPOs this year already, and they've come out of the gate at least. CoreWeave, as a good example, did great, and then it lost a third of its value this past week. So, there's a lot of that going on, and again, there's nothing wrong with it.
Just because you've got speculation in the market doesn't mean, oh my gosh, the world's going to end, and we're going to have this massive crash in the markets. It just says that it does suggest though, that there's decent risk that you could have a decent correction at some point. You know, 5%, 10%, 15% would not be abnormal at all to work off some of that speculation. The other thing that worries me, though, is just younger people that are investing in the markets because they're just taking on a tremendous amount of risk. I don't think they really understand the kind of risks that they are taking on with their money. They think that pretty much it just goes up, it's fine, just buy everything, it just keeps going up. I'm going to keep making money, I'm going to get rich. I saw John Penn and I talked about a study that was out recently, and they were talking about Gen Zers, and their goal is to basically be retired by the age of 35 They don't think they should have to work longer than that. So they asked them, how are you going to do that? Well, not through a traditional job, I'm not going to get there. I'm going to have to do that through investing in the markets.
That's a function of this speculative greed that we built into the market, markets that typically, historically speaking anyway, has not worked out well.

**Adam Taggart** (4:09)
Well, not only is that speculative thinking, but I'm just sure that's bad math. I mean, how much do you have, as a Gen Z-er, how much do you have to make on whatever you're able to put into a meme stock, whatever, at this point? They can't have that much more than a couple thousand, maybe a couple of tens of thousands of dollars to get to retirement status by 35 What does your annual return have to be? It's got to be bononkers.