Market is going stupid, Why I think you should not chase the hype

The Market is Irrational: A Bubble Ready to Burst

February 19, 2025

The stock market is acting completely irrational, with certain stocks skyrocketing to absurd valuations for no logical reason. This isn’t healthy growth—it’s speculative mania. Take Tempus AI (TEM), for example. The stock shot up from $30 to $85.84 in just a month because of a Nancy Pelosi disclosure. That’s right—one politician’s investment filing sent retail traders into a frenzy, piling in without considering fundamentals. Nothing about Tempus AI’s business changed overnight to justify this move, yet here we are. When stocks triple in value based on hype instead of earnings, it’s only a matter of time before reality hits.

And then there’s Hims & Hers (HIMS), now at $71.76 after rallying over 333% in six months. For what reason? None. Their medical treatments aren’t even FDA-approved—literally, nothing is approved. Yet, investors are treating it like a revolutionary healthcare company instead of what it really is: an overpriced online pharmacy selling wellness products without regulatory backing. And don’t even get me started on BigBear AI, which has somehow exploded 500% in six months. It’s been one of the most shorted AI stocks, and now, thanks to AI euphoria and short squeezes, it’s trading at levels that make zero sense.

This kind of rally never lasts. We’ve seen this playbook before—when valuations become completely detached from reality, corrections hit hard. The market is in full-blown speculation mode, and while some traders might ride the momentum for quick gains, the smart move is to stay cautious. Instead of chasing overpriced stocks, investors should be stacking cash and waiting for the inevitable pullback. When reality sets in, the ones who exercised patience will find true buying opportunities—not the ones left holding the bag.

Not financial Advice But Zack Currently has a put option on Hims and her 60 put expiring 3/31/2025