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Ripple Effect

The Latest Meme Stock Craze Is About Out of Gas

Loading ...Addison Wiggin

July 29, 2025 • 1 minute, 22 second read


market valuationsMeme Stocks

The Latest Meme Stock Craze Is About Out of Gas

In 2021, it was AMC and GameStop.

This year, it’s Kohl’s and GoPro.

They’re called meme stocks, as they’re driven by posts on Reddit’s WallStreetBets.

And bets they are.

While meme stocks sound innocuous, there is a critical factor that causes these names to get sudden interest from retail investors: a high level of short interest.

After all, if you’re short a stock and it starts to rise, you start to lose money on the trade.

That means if investors can engineer a move higher in a heavily-shorted stock, a squeeze could trigger as shorts buy to close.

That’s why heavily-shorted stocks, often unprofitable has-beens in the business world, have periods of strong performance.

That’s been the case the past few months:

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Heavily shorted stocks have outperformed the past few months as the market has rebounded

This outperfomrance in stocks with high short interest suggests that the meme trade is just about played out – and that investors looking to make a quick buck following a few posts on Reddit may be in for a rude awakening.

The rise of meme stocks also suggests that traders are looking for quick moves that they can’t get in the big tech names following their multi-month rally.

It’s not a sign that the markets will crash, but another hint that stocks are overheated and due for a necessary pullback.

Don’t make a new leveraged trade right now – take any leveraged trade you have off the table.

~ Addison

P.S. As always, your reader feedback is welcome: feedback@greyswanfraternity.com (We read all emails. Thanks in advance for your contribution.)


Autonomous Weapons

October 29, 2025 • John Robb

In the past, weapon systems took decades to build and changed slowly. Autonomy changes this. For example, new capabilities developed by field tests or simulation (testing scenarios in full physics simulators depicting actual environments) could be downloaded to existing weapon systems, making it possible to upgrade a weapon system significantly without any meaningful hardware changes. A process of improvement that used to take many years would shrink to weeks and, in time, days.

Autonomous Weapons
The Great Repricing of Power

October 29, 2025 • Addison Wiggin

Markets heard what they wanted. NVIDIA’s stock surged premarket on news that Trump would discuss the company’s Blackwell AI chip with Xi, pushing it to an unprecedented $5 trillion valuation.

Meanwhile, China quietly bought its first cargoes of U.S. soybeans this season — a symbolic gesture that reminded traders that diplomacy still runs on trade.

“It’s not détente,” wrote  Bloomberg’s Jennifer Welch this morning, “It is a dealmaking with a timer.” Wall Street is ambivalent on peace, but they do like profits.

In the background, China’s biotech sector continues its ethically murky sprint forward — this week, reports surfaced of Chinese scientists creating monkeys engineered to exhibit schizophrenia and autism.

The Great Repricing of Power
About Yesterday’s Rally

October 29, 2025 • Addison Wiggin

A high concentration of capital in a few stocks at the top ranks high among the features we detailed in Anatomy of a Stock Market Bubble.  

On days like yesterday, headlines urge investors to buy. However, they also underscore the fragility of this terrifying bull market: just a handful of names can make the difference between a big up day and a big down day.

About Yesterday’s Rally
American Autonomy

October 28, 2025 • John Robb

America’s role in the world isn’t that of the world’s policeman (a temporary post-World War II role foisted upon the U.S. due to the Cold War) or as the destination of immigrants (for most of the 20th century, when we saw the most significant increases in individual incomes and quality of life, the U.S. didn’t accept many immigrants). Instead, the role the U.S. has played throughout its existence is as the world’s leader in the production, adoption, and socioeconomic integration of new technologies. We figured out how to do it successfully first, and the world followed.

American Autonomy