$DOGE and the New Age Trader
This article is a two parter. It’s important to understand the why before I get to the juicy stuff I want to talk about. Time’s are changing and with change comes opportunity.
Part One: Market Change
Have you ever read, “Who Moved My Cheese?” It’s a great book that focuses on change. People are afraid of change because it takes them from that sweet comfortable spot that they’re currently in and throws them into the abyss of the unknown. Change can be hard to face and even harder to accept. Most people are pretty stubborn and it’s hard to convince them that change can be a good thing sometimes.
The market changes every day. We see stocks go up and down, monies exchanged from one hand to the next. One thing that hadn’t really changed until recently though has been the world of investing.
Investing in the previous decades always seemed dull and boring. You put your money here, let it relax and simmer and watch the wonderful magic of compounding happen. Occasionally something big would happen in the market. Insert Dotcom bubble.
When I was younger I always envisioned a stock trader like a recluse held up in their office sporting nothing but whitey tighties with a cigarette hanging out the side of their mouth. There’s an old school PC and on the monitor a commodities chart is up. Whose buying all those oranges!?
It’s no secret. Time’s have changed, especially for the world of investing. We don’t have to get our stock broker on the line to place orders - we can do that right from the palm of our hand. You don’t have to order catalogs of data (that’s already borderline outdated) just to understand a company. We are fortunate to be alive and trading in the age of the internet.
If you’re like me, you’re probably subscribed to multiple investor centric subreddits and follow a few Twitter traders here and there. You might have noticed that these once stable communities have started to slowly evolve and align more with the ideals of the new-age trader.
I see a lot of complaints from fellow redditors arguing combatively that these young traders are pouring money into shit companies that have yet to make a profit. There’s countless posts about why these companies should not be invested in and how they’re going to fail. I don’t necessarily disagree but we can’t ignore the fact that money really is getting poured in to these shit companies.
The Days of Buffet & Bogle are behind us. I’m not saying this trading style is ineffective because value investing definitely has its place in the market. What I’m saying is you either adjust to the change that is happening or you remain stubborn and miss a lot of opportunity that’s swimming within your reach right now.
Seriously, from one trader to another: Invest some time and effort into what is happening right now and try to see around the corner for what’s next. I don’t think I’ve ever seen or read about this much opportunity available on a daily basis. It’s a plentiful time that surely won’t last forever so it’s important to make some moves quick.
As the stock market becomes overextended it’s important that you don’t have all your money attached to it as well. When the eventual pullback or bear market comes you want to feel proud that you took action ahead of time to evenly disperse your hard earned cash across multiple investment avenues.
Now, with that said….Let’s get a little crazy shall we?
Part Two: Dogecoin: The People’s Currency
I know what you’re thinking….”Is this dude about to pump the Doge?” Hear me out..
Two years ago if anyone mentioned Dogecoin around me I would have laughed in their face. Investing in an alternative coin designed to be a meme centered around a highly emotional dog with Napoleon syndrome? Nah dawg…That shit isn’t for me. In 2020, like most of you, I had a lot of extra time. I decided it might be a good idea to start exploring other investments outside of the stock market. I wasn’t fully convinced of crypto in the years past but I started to see the trend coming back and one thing is for certain: I didn’t want to miss this train to Cashville a second time.
Crypto can be quite confusing. There’s stable coins, alt coins, coins attached to the dollar and various other “coin families”. What the hell is going on? Maybe we’ll save that for another article. Today I want to focus solely on Dogecoin.
First, we need to ask ourselves these questions:
Do I believe Dogecoin is the currency of the future? No.
Do I think Dogecoin will be around in twenty years? No.
Ten years? Likely not.
Will I become a millionaire from Dogecoin? Extremely doubtful.
Is Dogecoin going to a dollar? Jesus, I hope so…
You’re probably wondering, why is this guy interested in this and the answer is simple: Momentum.
Momentum can do wondrous things in the investment world specifically within the markets. Remember earlier when I said people were pouring money into shit companies? It’s momentum. GME made a lot of people rich but it couldn’t have been possible without the momentum behind it. The same goes for cryptocurrency in general. If crypto didn’t have the momentum that it has, I seriously doubt Bitcoin would have ever reached a quarter of the levels it’s at currently.
I’m extremely attracted to momentum when it comes to the stock market. I utilize momentum based indicators to help catch price waves and if you’re trading options without understanding momentum than you’re just a crazy person - and this is coming from the guy writing an article about Dogecoin!
With Dogecoin specifically, if you haven’t noticed, there is quite a bit of momentum building behind it. We have the ludicrous tweets by our Lord and Savior Elon Musk and on the other side we have Mark Cuban who seems like a really rationale guy. I like Musk. I’m a fan of his work but let’s face it - he’s a loose cannon who loves to stir up shit and cause trouble. I didn’t buy Dogecoin based on Musk…I bought it based on Cuban. Let me explain.
If you’ve seen Shark Tank you’ll know Mark Cuban likes to take risks but he hates snake oil and products that take advantage of the average Joe and Jane. One thing I’ve gathered over the years is that Mark Cuban genuinely seems like he wants to help people succeed and bring them out of this “work till you die and have nothing to show for it” type of lifestyle. He also knows a thing or two about business.
Cuban understands that COVID has hampered the attendance of future NBA games. He knows that all sports teams will see a decline in attendance for quite some time. He also knows that the general public just went through Hell and most people living paycheck to paycheck can’t afford to enjoy the luxuries that life has to offer. Who can afford to go to a basketball game when you can barely afford rent? His decision to accept Dogecoin, in my opinion, is for a very targeted audience and it’s not the people who have the disposable income to attend live events.
Assumptions can be dangerous but I can assume that Mark Cuban is smart enough to understand the stock market is changing and with crypto being introduced into the wide world of investing this opens up a lot of opportunity. He likely understands that this new age trader isn’t going to be trading the typical currencies and commodities that traders of the past dipped into. They’ll be on their phones, eyes locked into bright neon colors trading digital currencies at two in the morning.
A large portion of this population are the hustlers of the gig economy. These individuals live paycheck to paycheck with a reward of being their own boss. Most of these individuals don’t have 401ks and company benefits. What they have is each other. The internet has created the new age trader. The internet is momentum and the internet, whether we like it or not, is guiding this audience to take stranger risks than what other generations have been comfortable doing in the past.
Dogecoin is a lottery ticket. I believe Cuban himself even said this. It’s so true though. Who plays the lottery? Poor people. They buy into the hope, and have that “just in case” mentality. These people watched Bitcoin go from nothing to everything. Most sat on the sidelines kicking themselves that they didn’t get into the hype and upgrade themselves and their family into a better life. Dogecoin is about hope. It’s that “just in case” coin.
By accepting Dogecoin, Cuban provides legitimacy for the coin. He’s helping to make it worth something. He’s providing hope to this targeted audience that if this momentum continues the coins that they paid very very little for will someday be worth quite a lot. He’s also providing an avenue for this audience to spend those coins. The same coins that they didn’t even pay pennies for. It’s easy to convince yourself to spend something like that over hard earned dollar dollar bills ya’ll.
An Angel investor may invest into 100 companies, 95 of which will fail miserably. However, those 5 companies that survive more than make up for all those failed ones. For me, Dogecoin is one of those 100 investments I’m looking to strike gold with. The money that I personally allocated for Doge is something that I am completely comfortable losing. It’s something that I can toss into an account and forget about. I earned that luxury through profits earned in the stock market.
Doge gets a lot of shit but the individuals who refuse to accept it are the traders of the past. I’m not saying it’s a sure thing but I am saying if something does happen with Doge this investor isn’t going to be on the sidelines.
Hopefully you enjoyed this insight and thoughts on Dogecoin and the new age of stock trading. If you enjoyed it please help us out by liking the post and subscribe to our email newsletters so you don’t miss out on future insight. If you have any questions or comments please drop them below and I will respond as soon as possible.