(Motley Fool) Today's stock market is starting to feel like the dot-com bubble, according to billionaire investor and Shark Tank star Mark Cuban.
In an interview with Real Vision, Cuban said that it wasn't just the recent rally in the market, but the massive boom in day trading that's reminding him of the euphoria in the markets just before the technology sector crashed. Thanks to easy-to-use trading apps, we're seeing quite a bit of gambling in the markets lately, and it could end very badly.
Why are so many people jumping into day trading?
Why are we seeing such a surge in day trading? For one thing, with casinos and sports curtailed the last few months, people haven't been able to gamble through traditional means. That paired with many Americans unemployed, receiving enhanced unemployment benefits and stimulus checks, has given many more disposable income than when they were employed. And finally, the emergence of commission-free stock trading on user-friendly platforms like Robinhood has made it easier than ever to move in and out of stocks frequently.
Another potential reason is that it's quite frankly been easy to make money recently. Since the stock market bottomed in late March, it's been on a clear upward trajectory (until very recently). As Cuban said, "If you're a day trader and you can walk and chew gum, you are making money right now." Traders who bought airlines, cruise lines, hotels, and other beaten-down stocks in particular have had plenty of opportunities for profits.
