Bed Bath & Beyond Just Screwed Investors

Andy Snyder|September 1, 2022

We don’t get it. Our pants are getting tight.

And it’s not just one or two pairs of them or a certain brand. It’s all of them.

We’re not sure why it’s happening… Maybe somebody is shrinking them in the wash or sewing them tight while we’re away.

But as we sit here dunking our morning doughnut into our coffee (it helps us think), we can’t help but wonder why somebody would do this to us.

Meanwhile, stocks are sinking, interest rates are rising… and Washington continues to hand out free money to anybody with a sob story.

Those poor, poor students got $10K.

The solar industry got another $30 billion.

Even farmers are lining up to bring a few more free bucks to their farms.

But golly, even with all this easy money… things are still a mess. Even the rich are having a tough go of it.

This is a big problem.

Perhaps another doughnut and some historical perspective will help us figure it out.

Too Late

It got – and deserved – little fanfare, but we just marked the 12th anniversary of the Dodd-Frank Act.

It was passed in 2010 and is considered one of the largest financial reform measures of our lifetimes.

If you remember, this bill promised to change the fate of the financial world. No more bubbles. No more “too big to fail.”

But like most things of its nature… it did too little and came way too late.

Look around.

It has not prevented anything. Bubbles simply float over the head of the next victim.

The act was signed into law a full two years after the sector it was intended to regulate had melted down and taken the nation to the brink of disaster. Keen-eyed historians will likely tell you the bill was meant to be a punishment for the industry as much as a way to stop future meltdowns.

Put another way… it created accountability long after accountability was needed.

It’s a big theme these days.

Those darn police need some accountability.

Teachers too.

That suit on TV who gets paid for his wild opinions… Did you hear what he just said?

And those tweets… You can’t say that in public. Cancel that fool.

It seems, whether we’re in Washington or at home on the couch, Americans blame somebody else for all that ails us.

From stocks to marriages… it’s always the other guy’s fault.

It’s dangerous.

The Truth

We hate to admit it… but our tight pants aren’t the result of a grand conspiracy.

Nobody is shrinking them while we sleep.

We’re just getting old and fat.

And it’s not just us…

Every student loan borrower who accepts a $10K reduction knows he, too, wasn’t duped into a bad deal. He signed on the dotted line to borrow cash to pay for something that overpromises and underdelivers.

The warning signs are everywhere… and yet the buck gets passed.

These borrowers know the free money is a bribe.

But let’s not point at the speck in another fella’s eye without examining the timber in our own.

As investors, we know what we’re getting into.

We know Pelosi buys on inside information. We know the markets hinge on what scrolls across Powell’s teleprompter. And we know that bubbles come and bubbles go.

To think we can steer around the system or that we’re not somehow part of it is as ignorant as wanting more cash from Uncle Joe.

When we buy a stock, we’re playing in the system.

Bed Bath & Beyond (BBBY) just ripped off meme investors. It’s devaluing its stock by selling millions of shares to pay off debt. There will be lawsuits.

But the blame for such shenanigans lies with investors and investors alone.

If we want the shot at quick bucks, we’ve got to be willing to pay the price when our bet loses.

If a trade fails… it fails. If it soars… it soars.

To us, there’s a great freedom in the idea.

It’d sure be no fun if somebody were shrinking our pants. We wouldn’t be able to do much about it but gripe.

But when we accept that our waistline is under our control, well, our morning routine should start to look a bit different.

When we stop blaming others, we change what we’re doing.

This has been a hellish year for the stock market.

Many folks, though, haven’t done anything about it. They’ve just griped and prayed for November to come.

That’s silly.

Just like there are many ways to get an education, there are many ways to make money in a bear market.

We proved it to our Alpha Money Flow subscribers yesterday.

We didn’t just gripe about the mess Powell stirred last week. We showed readers how to play the downside on an overpriced defense stock.

We scored.

We locked in a gain of 40% in just a few days.

Personal accountability is a rare trait these days.

But boy, is it a valuable one.