Cannabis, Crypto, And The Psychology Of Gambling
Bloomberg Businessweek|October 1, 2018

For some, investing isnt about grinding out a rate of return. They crave stories

Pat Regnier
Cannabis, Crypto, And The Psychology Of Gambling

The economist John Maynard Keynes wrote that “the game of professional investment is intolerably boring and over-exacting to anyone who is entirely exempt from the gambling instinct; whilst he who has it must pay to this propensity the appropriate toll.” Ever since the financial crisis, the message to investors has been to embrace the “intolerably boring”: Index. Rebalance. Diversify. Rebalance again. Investors who internalized this message have done well in a long, steady—even dull—bull market.

But the gambling instinct can be repressed for only so long. Lately we’ve seen the emergence of strange bubbles. And, yes, I’m talking about crypto and cannabis. The wild trading in shares of Canadian marijuana company Tilray Inc. in September—in which its market value briefly exceeded that of American Airlines Group Inc.— felt a lot like last year’s Bitcoin frenzy. Spend a few minutes on Reddit pages devoted to Bitcoin, cannabis, or trading, and you can see the overlap and similarities of the communities. According to TD Ameritrade Inc., trading in pot stocks is overwhelmingly done by millennial-aged males. The stats for crypto look the same.

To understand these bubbles, it helps to compare and contrast them to what we saw in the late 1990s. It’s called the dot-com bubble, but it was really an optimism bubble. Everything seemed to be going right in those days. People believed peace was about to break out in the Middle East and that China’s entry into the World Trade Organization would begin an inevitable transition toward freedom and democracy. They didn’t just pile into tech stocks. They piled into everything. Another hot area was fuel cell companies, with speculators betting on an era of zero-pollution vehicles. (I know this, because I was one of them.)

This story is from the October 1, 2018 edition of Bloomberg Businessweek.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.

This story is from the October 1, 2018 edition of Bloomberg Businessweek.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.

MORE STORIES FROM BLOOMBERG BUSINESSWEEKView All
Instagram's Founders Say It's Time for a New Social App
Bloomberg Businessweek US

Instagram's Founders Say It's Time for a New Social App

The rise of AI and the fall of Twitter could create opportunities for upstarts

time-read
4 mins  |
March 13, 2023
Running in Circles
Bloomberg Businessweek US

Running in Circles

A subscription running shoe program aims to fight footwear waste

time-read
3 mins  |
March 20 - 27, 2023
What I Learned Working at a Hawaiien Mega-Resort
Bloomberg Businessweek US

What I Learned Working at a Hawaiien Mega-Resort

Nine wild secrets from the staff at Turtle Bay, who have to manage everyone from haughty honeymooners to go-go-dancing golfers.

time-read
10 mins  |
March 20 - 27, 2023
How Noma Will Blossom In Kyoto
Bloomberg Businessweek US

How Noma Will Blossom In Kyoto

The best restaurant in the world just began its second pop-up in Japan. Here's what's cooking

time-read
3 mins  |
March 20 - 27, 2023
The Last-Mover Problem
Bloomberg Businessweek US

The Last-Mover Problem

A startup called Sennder is trying to bring an extremely tech-resistant industry into the age of apps

time-read
10+ mins  |
March 20 - 27, 2023
Tick Tock, TikTok
Bloomberg Businessweek US

Tick Tock, TikTok

The US thinks the Chinese-owned social media app is a major national security risk. TikTok is running out of ways to avoid a ban

time-read
10+ mins  |
March 20 - 27, 2023
Cleaner Clothing Dye, Made From Bacteria
Bloomberg Businessweek US

Cleaner Clothing Dye, Made From Bacteria

A UK company produces colors with less water than conventional methods and no toxic chemicals

time-read
3 mins  |
March 20 - 27, 2023
Pumping Heat in Hamburg
Bloomberg Businessweek US

Pumping Heat in Hamburg

The German port city plans to store hot water underground and bring it up to heat homes in the winter

time-read
3 mins  |
March 20 - 27, 2023
Sustainability: Calamari's Climate Edge
Bloomberg Businessweek US

Sustainability: Calamari's Climate Edge

Squid's ability to flourish in warmer waters makes it fitting for a diet for the changing environment

time-read
4 mins  |
March 20 - 27, 2023
New Money, New Problems
Bloomberg Businessweek US

New Money, New Problems

In Naples, an influx of wealthy is displacing out-of-towners lower-income workers

time-read
4 mins  |
March 20 - 27, 2023