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James Gorman, CEO of Morgan Stanley, on crypto and meme stocks

  • James Gorman said some moments on the crypto and meme exchanges don’t make sense.

  • He also says that SPACs and highly rated stocks of companies that are not yet making profits are just as risky for investors.

  • Morgan Stanley’s CEO doesn’t invest in crypto, he told CNBC on Monday.

James Gorman, CEO of Morgan Stanley, says the more speculative investing in financial markets carries far greater risk to investors than the broader stock market.

Gorman said so during an interview on CNBC’s “Closing Bell” this Monday, noting that despite calls from some colleagues and the nature of his job, he was not invested in crypto himself.

Stocks aren’t “that crazy”

While he believes investors are at greater risk when they invest their money in cryptocurrencies and meme stocks, Gorman says stocks don’t look “that crazy” even when the market is at its highest valuation level.

He noted that there are moments in the crypto markets that make financial market watchers wonder whether certain steps make sense at all. Using Bitcoin as an example, he said that there are moments when you cannot “rationally” say that your movement makes sense, and it doesn’t matter whether its value is $ 60,000 or $ 6,000.

Aside from cryptocurrencies and meme stocks, the CEO of Morgan Stanley noted that investors also face far greater risks with other highly speculative investment vehicles such as SPACs and high-quality stocks of no-profit companies.

The head of Morgan Stanley also spoke about the Federal Reserve and the expectation that the central bank will likely start rate hikes much sooner than initially thought.

According to him, rate hikes could put new pressure on the stock market, but that won’t do much harm to investors even as the market adjusts to this new environment.

Gorman said the readjustment and a small correction would “not necessarily” be [be] Bad thing. “

Bitcoin fights, AMC and GameStop tanks

Bitcoin price has fallen nearly 30% in the past 30 days, with the collapse of the cryptocurrency below $ 50,000 while stocks struggled with downward pressure related to a new strain of coronavirus.

Dogecoin, which Tesla CEO Elon Musk said in an interview with Time Magazine, is better for transactions than Bitcoin, rose more than 27% in intraday deals on Tuesday. This follows a tweet from Musk who states that Tesla may accept DOGE for its cars as part of a market test.

Tesla will buy some merchandise from Doge and see how it goes

– Elon Musk (@elonmusk) December 14, 2021

Elsewhere, stocks of AMC Entertainment and GameStop, two of the most popular meme stocks of the moment, have fallen in recent weeks after rising to new all-time highs earlier in the year.

AMC shares fell 15% on Monday, hitting a low last seen in May. GameStop, on the other hand, saw its shares decline 14%, with double-digit losses pushing the company’s share price to its lowest closing price in over 8 months.

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