AMC is a fun spectacle as the calm bull market progresses, attracting billions of investors
Traders on the floor of the New York Stock Exchange, June 4, 2021.
The market is big enough for monkeys and turtles, with plenty of room for the army of primate traders chasing a 2,000% gain in AMC Entertainment and the quiet majority gradually slipping money into equity funds to exploit a former steady economic expansion.
The self-proclaimed “monkeys” who helped AMC become bananas – making it by far the most actively traded show in the stock and options markets last week – followed Roaring Kitty’s run on GameStop there. months ago to become the Wall Street fixture and raise the same thorny questions:
- Does this reflect a dangerously speculative backdrop? (Not really.)
- Will this increase volatility across the market? (Maybe, if the memes stocks get even wilder and cause big losses among short sellers, but that’s not happening yet.)
- What does it reveal about the state of society? (No more than we already knew, stories travel at the speed of light and separate people into tribes.)
Much like Robinhood’s initial rash of purchases by armed amateur speculators last year, the video game-style viral action in AMC and unapologetic culture of retail traders Raising billions of new equity this year has generated so much tension and lip twitching among market watchers that it may have propagated a sense of caution more than contagious recklessness.
Monkeys can be restless and, at some point, will likely make their targeted stocks treacherously unstable with excess hot money. But market turtles are quite aggressive in their own way. This means that the flows to long-term equity funds have been huge and persistent throughout the year.
Over half a trillion dollars has been invested in stock ETFs and mutual funds this year, according to EPFR Global, representing 3.5% of all money accumulated in these portfolios since the dawn of time until December 31, 2020.