WallStreetBets Rebellion Rally Is A Bubble That Will Burst, Peter Boockvar Warns
- Bleakley Advisory Group chief investment officer Peter Boockvar calls the Reddit-fueled rebellion rally a “parabolic bubble” in the CNBC interview.
- In a research note, Boockvar warns that mania trades into GameStop Corp. (NYSE: GME) and American Airlines Group Inc (NASDAQ: AAL) will ultimately go bust.
- “Let’s break down the investment strategy: Find the most shorted stocks, buy calls, write about it, buy the stocks and jam it higher,” said Boockvar.
- The prices of these securities far exceed the underlying value of companies.
- Boockvar said that markets’ history shows that bubbles start the same way and then pop right “back to where the stock started from.”
- He also blamed Fed’s loose monetary policies for the rise in speculation, though he admits that the policy was not intended to help “investors get drunk on dangerous trades.”
- “We have to understand that the purpose of essentially free money via zero rates and QE is to encourage risk-taking. It is meant to scare money out of a savings account, a CD, or T-bill and into riskier assets. It thus encourages riskier behavior on purpose,” he added.
- According to Boockvar, the euphoria is touching dot-com-bubble euphoria levels.
- Price Action: In the pre-market session on the last check Friday, GME is 97.3% at $382, and AAL is up 14.1% at $20.65.
- Related News: How WallStreetBets Is Fueling A Rally In Silver Stocks
Latest Ratings for GME
| Date | Firm | Action | From | To |
|---|---|---|---|---|
| Apr 2021 | Ascendiant Capital | Downgrades | Hold | Sell |
| Mar 2021 | Wedbush | Downgrades | Neutral | Underperform |
| Mar 2021 | Telsey Advisory Group | Maintains | Underperform |
View More Analyst Ratings for GME
View the Latest Analyst Ratings
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