Trader who slammed Warren Buffett represents an ‘unholy speculative mix’ that could doom the market, former Wall Street strategist warns

Trader who slammed Warren Buffett represents an ‘unholy speculative mix’ that could doom the market, former Wall Street strategist warns

Barstool Sports founder Dave Portnoy, ever the carnival barker, has been stirring it up in the virtual trading pits lately. Flipping stocks is easy, he shouts from his desk. “I’m just printing money… I should be up billions!” Warren Buffett BRK.A, +1.41% BRK.B, +1.79% is “washed up!”

Read:It’s like the Wild West with ‘get-rich-quick crowd’ vs. Wall Street pros, but it’s too easy to blame retail investors for ‘rampant speculation’

Here is just one of the rants he dropped on his 1.5 million Twitter followers last week:



But it’s exactly that kind of bullish mania that spells doom for this stock market, according to Peter Cecchini, former top strategist at Cantor Fitzgerald. In fact, he warned in a note posted on LinkedIn that we could be looking at a “Portnoy Top” in this market.

“[Portnoy’s] attention-getting, wild style is emblematic of just how emotional and extreme equity markets are now,” he said. “It’s both impulsive and compulsive. His behavior really just explains everything. It doesn’t even matter if he’s serious or not.”

Cecchini isn’t the only one raising a red flag on Portnoy’s antics:

Regardless of whether Portnoy’s just engaging in his latest attention grab, he represents a groundswell of retail investors emboldened by the current climate of staying at home, free-flowing Fed money and easy access through platforms like Robinhood, Cecchini wrote.

“It’s an unholy speculative mix,” he said. “It’s not about him; it’s about what the rants represent.”

Cecchini’s takeaway is that the stock market is no place to be at the moment, even with some of the recent spikes investors have seen of late. On Friday, the Dow DJIA, +1.90% bounced back from a day-earlier decline of nearly 2,000 points with a 477-point rally, and both the S&P 500 SPX, +1.30% and Nasdaq Composite COMP, +1.01% also logged gains.

Still, it’s going to get ugly out there, Cecchini warns. “There’s absolutely no reason to own U.S. equities right now — unless one likes low to negative future returns.”


Originally published on
MarketWatch

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