13 Dec 2021

Despite accounting for just 2.3% of the overall index, Tesla accounted for 86% of the amount spent on call option premiums for the top 50 stocks in the S&P500.

Adding the lack of breadth in the option market we are seeing shocking broad market breadth according to a Goldman study, against the backdrop of new All Time Highs (ATH) on Friday, I am super bearish just call me Dr Bearman.

Another reason why I am excited to get short is that everyone has capitulated there are no more shorts left in the market. Everyone is banking on more Santa gifts. I am always early I prefer to buckle up instead of missing out.

Speaking of shorts I spotted John Paulson from Big Short fame filing for an expensive divorce. A pity there are no short derivatives on the divorce market. In today’s divorce friendly society I don’t think there would be any market makers. By the way if anyone figures out a way to hedge divorce let me know I am interested. That is in making a market, not getting a divorce. However, after a weekend of home chores it does have a certain attraction.

I think Robinhood is such a symbolic stock on so many levels. Robinhood the folklore story is etched into our collective unconscious and such a rich symbol to lead a new army of traders was quite fitting. Before you get too excited look how Robinhood has fared since its IPO. Ouch with a high in the 70s and currently trading at 20, I think Robin has stolen from the wrong people.

To conclude today’s letter with a little more mania to top out the everywhere bubbles market, we need to look at the Tulip Mania and understand that this is not a 1600’s phenomenon but a 2000’s phenomenon as well.

At the height of the bubble, tulips sold for approximately 10,000 guilders, equal to the value of a mansion on the Amsterdam Grand Canal. At the height of the market, the rarest tulip bulbs traded for as much as six times the average person’s annual salary. With NFTs — or non-fungible tokens — things like tweets sold for $2.9m or a video by Beeple, sold for $6.6 million. With the 100 – 1000 multiple rises this year of some crypto tokens I think you can easily change the name Tulip for dozens of token names.

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