The SPAC Bubble Is About to Burst in Spectacular Fashion

There’s a major stock bubble about to burst soon. When it does, it’s going to unleash a lot of carnage on unsuspecting investors. Today, Sean McCloskey breaks down why SPACs have hit bubble territory and what you can do to avoid getting caught up in the coming collapse of the SPAC market. There’s a major stock bubble about to burst soon. When it does, it’s going to unleash a lot of carnage on unsuspecting investors. Today, Sean McCloskey breaks down why SPACs have hit bubble territory and what you can do to avoid getting caught up in the coming collapse of the SPAC market. [Energy and Capital logo] The SPAC Bubble Is About to Burst in Spectacular Fashion By [Sean McCloskey]( Written Mar 19, 2021 The No. 1 investment trend of 2020 is still booming and is now on pace to smash its previous record set last year for cash inflows. SPAC mania isn’t going anywhere anytime soon. Irrational exuberance is spiking sharply in this section of the market. I see numerous warning signs telling me this bubble is going to burst in spectacular fashion and soon. Some recent data compiled on SPACs sheds light on why that is. In 2017, SPACs raised approximately $10 billion. In 2018, SPACs raised roughly the same amount. In 2019, SPACs raised $13.6 billion, an impressive but still reasonable number. Last year, everything changed. In total, SPACs raised $83 million in 2020. This year we’re on pace to double that. According to SPACInsider, SPACs have raised over $38 billion so far this year. This puts us on pace for SPACs to raise $150 billion or more in 2021. The sheer amount of money getting pumped into these “blank check” companies right now is mind-boggling. This week, between March 15 and 16 alone, nine SPACs opened for trading. NINE! More Like Nein for Me There’s no way this will end well for a lot of folks who are chasing these types of investments. The narrative I just laid out before us can be summed up best by one of my favorite charts of all time. It's a chart that explains how irrational exuberance and excitement in a new idea, opportunity, technology, or trend plays out over time. Meet the Gartner Hype Cycle: [Gartner Hype Cycle]Source: bmc.com Traditionally, this chart is a measure of expectations over time. In this case, we’re measuring investors’ interest and expectations with SPAC investments over time. The sharp increase in the amount of cold hard cash flooding into SPACs — and the fact that it’s expected to double this year — indicates we’re reaching the “peak of inflated expectations” for SPACs. According to Gartner’s chart, the bubble is certain to burst soon. The “trough of disillusionment” and a massive correction await. New Robot Has Tech Execs Panicking You might not believe that what I’m about to show you is real, but I assure you this video has been left unedited. There are no special effects and no trickery — this technology exists today, and it’s about to turn the entire industry on its head. And even better, it’s about to make investors absolutely filthy rich. And now, every single tech company all over the world is scrambling to get its hands on this brand-new piece of tech. [Click here]( to get all the details. You Can Take That to the Bank I’m as much of an optimistic speculator as an investor can be. I’m a few decades away from retirement, I have some expendable income, and I want large returns as fast as I can make them. And full disclosure, I even currently own shares of one particular SPAC, which I love, and I'm up considerably... nearly 70% in two months. I plan to hold onto this company for a while. It’s a rare diamond of a stock in the SPAC landscape. But this company is the exception to the norm, and it took me weeks of research before I felt confident enough to make my move, as well as recommend it to subscribers of Christian DeHaemer’s [Bull and Bust Report.]( I suspect the much larger majority of SPACs that have debuted on various exchanges over the past 12 months — and the ones that will IPO this year — will offer investors minuscule returns, and many people will probably wind up in the red with their SPAC investment. In fact, the average annual return for SPACs in 2020 was a piddly 1.6%. That's nothing! My 401(k) returned 36% in 2019. For 2%, you might as well buy a 10-year U.S. Treasury bond or just put your money in a high-yield savings account if 2% gains are your goal. [Gartner Hype Cycle] Do NOT Buy One Single 5G Stock Until You See This The best 5G stock to buy right now isn’t about the internet, self-driving cars, or smartphones... It’s about one “unsexy” industry that has a $3 trillion tailwind behind it... And investors who get in today stand to make enormous returns on their money. Because this little-known stock hasn’t been touched yet by Wall Street analysts or the mainstream financial pundits. But it's poised to become the No. 1 buyout target in 2021. Hedge funds and insiders are making their move... The CEO of this tiny company already upped his position to a total of 3 MILLION shares. [Click here for everything you need to know.]( Here’s the Point Look, if you trust your own research or the research of your financial adviser and have money in a SPAC already, don’t panic. Like me, you may have staked your claim in one of the handful of SPACs that should actually offer great returns. DraftKings (NASDAQ: DKNG) is a prime example of a SPAC with tons of upside. But for the large majority of folks who have dumped their money into SPACs blindly without looking at the wider investment landscape, the gig is up. I'm talking about folks like my lawyer friend who dumped $10,000 into Bill Ackman’s Pershing Square Tontine Holdings (NYSE: PSTH) about a month ago. For his sake, I hope PSTH acquires Stripe, an Irish-American financial services and software company dual-headquartered in San Francisco, California, and Dublin, Ireland, and not some of its other rumored targets. [PSHT 2 month] Which leads me to another issue with SPACs that should push the sector even closer toward a spectacular crash. The number of quality companies that are looking to go public via SPAC is dwindling. Most of the quality companies have already finalized their mergers. It’s slim pickings for newly listed SPACs still looking to strike a deal with private businesses strong enough to profit in the publicly traded market. The bottom line is if you missed out on the SPAC craze, at this point in the trend, that's a good thing. Excluding the select few companies that have acquired strong businesses already, I expect the SPAC bubble will burst and soon. And it could be an excruciatingly painful slide to the bottom if you let FOMO rule your trading and jump in now. Don't be a haza. To your wealth, Sean McCloskey Editor, Energy and Capital P.S. When one sector falls, others often rise. And with rumors of a multitrillion-dollar infrastructure bill in the works from President Biden’s administration, my colleague Keith Kohl has a great company for you to invest in right now. [Learn more here.]( Browse Our Archives [Cleaner Fuel, Greener Profits]( [Why Economic Freedom Is the Best Defense Against Russian Aggression]( [Frogs, Cogs, and Satellites]( [Last Chance to Own Gold]( [America's New Cold War]( --------------------------------------------------------------- This email was sent to {EMAIL}. It is not our intention to send email to anyone who doesn't want it. If you're not sure why you've received this e-letter, or no longer wish to receive it, you may [unsubscribe here](, and view our privacy policy and information on how to manage your subscription. To ensure that you receive future issues of Energy and Capital, please add newsletter@energyandcapital.com to your address book or whitelist within your spam settings. For customer service questions or issues, please contact us for assistance. [Energy and Capital](, Copyright © 2021, [Angel Publishing LLC](. All rights reserved. 3 E Read Street, Baltimore, MD 21202. The content of this site may not be redistributed without the express written consent of Angel Publishing. Individual editorials, articles and essays appearing on this site may be republished, but only with full attribution of both the author and Energy and Capital as well as a link to www.energyandcapital.com. Your privacy is important to us -- we will never rent or sell your e-mail or personal information. Please read our [Privacy Policy](. No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned. While we believe the sources of information to be reliable, we in no way represent or guarantee the accuracy of the statements made herein. [Energy and Capital]( does not provide individual investment counseling, act as an investment advisor, or individually advocate the purchase or sale of any security or investment. The publisher, editors and consultants of Angel Publishing may actively trade in the investments discussed in this publication. They may have substantial positions in the securities recommended and may increase or decrease such positions without notice. Neither the publisher nor the editors are registered investment advisors. Subscribers should not view this publication as offering personalized legal or investment counseling. Investments recommended in this publication should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company in question.