Meme Stocks, Gambling, and America’s Risk-Taking Culture

During their recent episode, Taylor, Carlisle, and Meb Faber discussed Meme Stocks, Gambling, and America’s Risk-Taking Culture. Here’s an excerpt from the episode:

[Meb] Yeah, I have a slightly different take. So one, I agree, look, Americans, and we talked about this in the book, Americans are uniquely predisposed to risk taking. Now, whether it’s in the water, whether it’s part of the system, whether it’s like, totally acceptable to fail, like there’s nothing Americans love more than just cheering someone on their downfall.

And then also cheering for them on the rebirth, the Phoenix, you know, we love a comeback story. Entrepreneurship, if you fail, like it’s a badge of honour here, you go around the world and a lot of places and the emotions of shame and embarrassment, particularly in Asia and other places, it’s totally different. And it shows up in ownership statistics.

So in the book, we talk about what percentage of Americans own stocks, versus, you know, UK, Japan, and Netherlands, like the other three countries that had the biggest stock market in the world. And it’s orders of magnitude bigger, if you ask people, like, it’s a good idea to start a business. So there’s something in the water, one.

Two, I think risk taking and gambling has always been around. I think that there’s two big differences today. So people are like, Oh, these, you know, these people are so much, you know, more degenerate today.

And like, bro, people like you study history, and you look at, you know, the bubble 1720s. In Europe, you look at, you know, 1873, on and on. The difference today is it’s so accessible.

Right? You can just take your phone out and be like, you’re the Dodgers game, next pitch is gonna be a ball $100. Right?

Like, you couldn’t do that before you had to go to your buddy and be like, Hey, I’ll wager you the Dodgers are going to beat the Yankees, whatever. That’s one, the one weird part about this cycle, I’ll give you speculation for all of history, like people wanted to win, right? Like you bet, because the thrill of gambling, but also like you wanted to make money.

There’s been this weird thing in this cycle. And there’s an entire name for the DJs, right? Like people who are just yoloing with expectations, they’re going to lose all their money, and then bragging about it.

It’s a very strange difference, I think, then throughout history, most of history, you know, your neighbours telling you about that hot stock, and that thing goes to zero, they’re so embarrassed, they don’t want to talk to you, right? Like, like, it’s, it’s, that’s been true throughout history. Now, people are like, Yo, bro, I put 100 grand into single day options on Friday, and I lost it all, I’m gonna go post it on Reddit.

Look how cool I am. You’re like, Wait, that’s really like what that’s really stupid. Like, what are you talking about?

There’s a great quote. And I’m gonna have to look it up while you guys talk about this. I’m gonna see if I can find it real quick.

You guys keep going.

[Jake] Well, while you’re do you think you can have the cathedral without the casino?

 

[Meb] Well, so here’s where I kind of get into a struggle. And I haven’t decided on this yet, where, look, it’s easy to look down on people that like are doing really dumb stuff, particularly when you’re young. I mean, but that was me, that was a lot of us in the early years.

 

And that’s how you learn in many ways. That’s how you get the scars, put your hand on the stove. You’re like, wow, that mean, dude, I lost.