Assets driven by emotion and momentum have seen their prices surge “to the moon”, as many Redditors and Robinhood traders like to describe the phenomenon. Perhaps you too might have been tempted to jump onto the bandwagon, purely because you think prices are going higher and there is this fear of missing out (FOMO).

There is no question that these theme-chasing, momentum or meme assets — they include stocks, special-purpose acquisition companies (SPACs), cryptocurrencies and non-fungible tokens (NFTs) — have had a remarkable run, much of it attributed to retail investors with time on their hands and stimulus money in their pockets. The frenzied trading was further enabled by zero-fee trading platforms and fuelled by social media.

Few, if any, bothered — or even pretended to bother — with underlying fundamentals and mundane metrics like valuations, profitability and balance sheets or, often, even business models. As we wrote before, many liken chasing these assets to a game — for instance, attempting to push the price of Dogecoin to US$1, as though the target price is a goal that, once achieved, will allow players to “win the game”.

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