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What made the small cap market go apeshit in 2020

Posted on 6/5/23 at 11:05 am
Posted by BabyTac
Austin, TX
Member since Jun 2008
12057 posts
Posted on 6/5/23 at 11:05 am
I know Covid hit and the retail investor grew, but small fry investors don’t pump stocks like the NIO, FSLY, DFKG, TDOC etc up to huge peaks.

I’m just curious what was going on around that time to spark such a huge delta? Can it happen again.
Posted by boogiewoogie1978
Little Rock
Member since Aug 2012
16950 posts
Posted on 6/5/23 at 1:01 pm to
An injection of "free" money looking to invest in higher upside.
Posted by Upperdecker
St. George, LA
Member since Nov 2014
30543 posts
Posted on 6/5/23 at 1:04 pm to
Casual investing taking off with Robinhood and comparable apps in 2019-2021 was a huge part in that. Retail investors had a massive appetite for risk. And yes the free cash infusions and lock downs from Covid played a part in that. But also being at the peak of a 12 year bull run had people saying “stocks only go up” and even economists spouting essentially the same thing in Modern Monetary Theory
This post was edited on 6/5/23 at 1:06 pm
Posted by UltimaParadox
Huntsville
Member since Nov 2008
40831 posts
Posted on 6/5/23 at 1:18 pm to
I would not underestimate the impact of all the retail injection during that time.

However, the cheap money (low interest rate) environment led people to take on more risk.

Everyone FOMOed into extremely risky positions such as ARKK, which people was crowning ole Cathie the next Warren Buffet. In reality she was just the next JANUS Fund.

I am sure another bubble will happen down the road, that I am sure of
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