John Hempton, Chief Investment Officer and founder of Bronte Capital, shares insights into the current market landscape marked by volatility and retail trading phenomena like GameStop's short squeeze. He discusses 'Mass Mania,' explaining how unprecedented retail inflows create bubble-like conditions. John draws parallels between today’s market and historical speculative manias, emphasizing the importance of understanding risks for inexperienced investors. His seasoned perspective sheds light on navigating this chaotic investment environment.
35:01
forum Ask episode
web_stories AI Snips
view_agenda Chapters
menu_book Books
auto_awesome Transcript
info_circle Episode notes
insights INSIGHT
Mass Mania in Markets
Retail investors flood the market during periods of mania, often driven by accessible trading apps.
This influx creates short-term opportunities but often ends badly for most participants.
question_answer ANECDOTE
The Nickel Boom
The nickel boom in Australia in 1969, documented in "The Money Miners," exemplifies market mania.
Real discoveries fueled initial growth, but speculation led to inflated valuations and eventual collapse.
question_answer ANECDOTE
GameStop Mania
The GameStop situation highlights the gamification of trading and the risks of speculative manias.
While some profited significantly, many retail investors suffered losses due to extreme valuations.
Get the Snipd Podcast app to discover more snips from this episode
The Go-Go Years is a harrowing and humorous account of the growth stocks of the 1960s and their meteoric rise, followed by the devastating market crashes of the 1970s. The book includes stories of high-profile personalities such as H. Ross Perot, who lost $450 million in one day, Saul Steinberg's attempt to take over Chemical Bank, and the fall of America's 'Last Gatsby,' Eddie Gilbert. Brooks blends humor and astute analysis to provide a vivid description of the financial landscape of the time, making it a classic of business history.
Devil take the hindmost
A History of Financial Speculation
Edward Chancellor
In 'Devil Take the Hindmost,' Edward Chancellor traces the origins of the speculative spirit back to ancient Rome and chronicles its revival in the modern world. The book covers various financial bubbles and crashes, including the tulip scandal of 1630s Holland, the South Sea Bubble of 1720, the railway mania of the 19th century, the crash of 1929, and more recent events like the dotcom bubble and the Japanese bubble economy. Chancellor explores how human psychology and financial practices have led to repeated cycles of speculation and financial instability over the centuries.
The Money Miners
The Money Miners
Trevor Sykes
John comes back onto Inside The Rope to highlight his views of the market, including the current volatility and headline-grabbing trades such as the Gamestop short squeeze; alongside other areas of the market that John believes could be in, or heading towards bubble territory.
He and David also discuss recent market performance and retail inflows into financial markets which John refers to as "Mass Mania", causing valuations of companies to move into areas that would have never been previously forecast creating bubble-like conditions.
John has been a financial markets professional since 1999 and is Chief Investment Officer, Founder and co-owner at Bronte.
John was Head of Financials at Platinum Asset Management and its youngest partner. After Platinum listed in 2007, John started Bronte Capital in 2009.
Inside the Rope with David Clark 
