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<ul class="summary-list"><li><keyword id="12116922" type="UNKNOWN" weightage="60" keywordseo="lily-francus" source="Orion">Lily Francus</keyword> compared the meme-stock frenzy to the tech-stock bubble in the early 2000s.</li><li>The quant researcher dismissed the idea that <keyword id="11948148" type="UNKNOWN" weightage="60" keywordseo="retail-investors" source="Orion">retail investors</keyword> led the <keyword id="11937112" type="UNKNOWN" weightage="60" keywordseo="gamestop" source="Orion">GameStop</keyword> and <keyword id="11911241" type="UNKNOWN" weightage="60" keywordseo="amc" source="Orion">AMC</keyword> short squeezes.</li><li>Some young people are turning to crypto and <keyword id="11915972" type="UNKNOWN" weightage="60" keywordseo="meme-stocks" source="Orion">meme stocks</keyword> out of desperation, the <keyword id="12116920" type="UNKNOWN" weightage="60" keywordseo="moodys" source="Orion">Moody's</keyword> analyst said</li></ul>Lily Francus compared the meme-stock boom to the dot-com bubble, warned traders not to get greedy, and explained how retail investors have transformed <a href="https://markets.businessinsider.com/stocks/gme-stock">GameStop</a> and <a href="https://markets.businessinsider.com/stocks/amc-stock">AMC</a>'s business prospects in a recent <a href="https://www.realvision.com/shows/live/videos/could-the-meme-stocks-change-the-way-we-evaluate-credit-risk">RealVision interview</a>.The director of quant research strategy at Moody's Analytics dismissed the idea that retail traders spearheaded the <a href="https://www.businessinsider.com/whats-a-day-trader-retail-gamestop-reddit-change-wall-street-2021-1?r=US&amp;IR=TIR=T">short squeezes</a> earlier this year. Moreover, she advised them to treat meme stocks like venture bets, and argued young people are buying cryptocurrencies and other speculative assets because they're disillusioned by income inequality.Francus is best known for creating the Net Options Pricing Effect (NOPE) indicator, which gauges the impact of options trading on the stock market and helps predict volatility.<h2>Here are Francus' 11 best quotes from the interview, lightly edited and condensed for clarity:</h2>1. "It's striking how similar the meme-stock trend is to what we saw in the 2000-to-2001 period with the tech stocks."2. "Assets like <a href="https://markets.businessinsider.com/stocks/tsla-stock">Tesla</a>, <a href="https://markets.businessinsider.com/etfs/ark-innovation-etf-us00214q1040">Ark</a>, <a href="https://markets.businessinsider.com/currencies/btc-usd">bitcoin</a>, GameStop - they have a lot of uncertainty attached to them about their future value. There's this idea that maybe this asset is trading for $4 a share, but you secretly know that it could trade at $3,000 a share later. Those tend to be strong drivers of financial bubbles."3. "I do not think this 'options mania' is a primarily retail-driven phenomenon. The volumes are very high. In certain cases, the amount of option contracts traded is just not realistic for a retail trader. "4. "If you're bullish on these stocks, it's a very good sign to see an equity offering. It means the firm's actually drawing on this new price-insensitive base of buyers to pay off debt, to invest in R&amp;D, to actually conduct business. Although it means dilution for the investor, it also creates fundamental value."5. "When you see these meme squeezes, asset volatility does increase dramatically. But the ability to capitalize on these at-the-market equity offerings really does win out in the end. Our predictions of expected default frequency over the next year went completely into the dumpster. At its peak, we were actually recording that AMC's probability of default around November was one in two. Now, it's less than one in 100."6. "Your risk increases the longer the bubble goes on, because a bubble is really this detachment from the fundamental value of the firm. Even if the fundamental value does increase through equity offerings, it doesn't mean your risk has decreased. It doesn't mean that the fundamental value post-equity offering will be anywhere near where the price currently is."7. "My preferred strategy when I play these meme stocks is to essentially treat them as venture bets. You expect most of them will go to zero, or maybe decrease 50% in value. But it really doesn't matter if you do 10 or 20 of them, because one of them might 100x and you make back all your money."8. "Millennials have, I wouldn't call it a YOLO mindset, but there's such a widening of income inequality as well as asset inequality. They have been essentially priced out of housing <keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">markets</keyword>. My generation and later ones are looking at the markets as their way for social movement that traditional careers or traditional asset appreciation don't offer, and may never offer again."9. "You're seeing these desperation plays. If you're on your last dollar, you put it in the market and suddenly it 100x's, then you're rich. If you lose it, you're still poor. You're not going to be measurably worse off by spending it on gambling in the market."10. "Bubbles are dangerous. Most people are going to lose money from meme stocks and speculative bets. That's just how bubbles work. Very few people can actually target and time them properly to get out ahead. But at the same time, those opportunities are there."11. "Most of the danger in bubbles is forgetting you're in a bubble, letting go of risk aversion, and skipping into greed. There are ways to size appropriately, where you get good exposure and you're not going to be ruined if it pops."

A star analyst compares the meme-stock boom to the dot-com bubble, warns investors not to get greedy, and highlights GameStop and AMC in a new interview. Here are the 11 best quotes.

Welcome to 10 Things Before the <keyword id="11907548" type="UNKNOWN" weightage="60" keywordseo="opening-bell" source="Orion">Opening Bell</keyword>. If this was forwarded to you, <a href="https://newsletter.businessinsider.com/join/4np/10-things-opening-bell">sign up here.</a> Plus, download Insider's app for news on the go - <a href="https://apps.apple.com/app/apple-store/id554260576?pt=385758&amp;ct=06292021_newsletters&amp;mt=8amp;mt=8">click here for iOS</a> and<a href="https://play.google.com/store/apps/details?id=com.freerange360.mpp.businessinsider"> here for Android</a>.Let's jump in.1. Dow futures have plunged 500 points as a looming default by Chinese property giant Evergrande rattles investors. The fear is that losses suffered by creditors who provided $350 billion in debt will spread damage into the financial system. <a href="https://markets.businessinsider.com/news/stocks/stock-market-today-evergrande-default-loan-payment-fed-meeting-oil-2021-9">See how markets are doing now</a>. 2. The White House is gearing up to combat crypto use in ransomware attacks. Per The Wall Street Journal, the US government is preparing a slew of actions to make it more difficult for hackers to use cryptocurrencies to profit from cyber attacks. <a href="https://markets.businessinsider.com/news/currencies/cryptocurrency-ransomware-attacks-hackers-biden-administration-sanctions-cyber-crime-2021-9">Some sanctions could roll out as early as next week.</a>3. Sam Bankman-Fried spoke to us about the "absolutely huge opportunity" in crypto derivatives trading. The 29-year-old billionaire CEO of FTX explained why it's a win-win for regulators and the industry, and shared <a href="https://www.businessinsider.com/crypto-derivatives-huge-opportunity-us-ftx-bankman-fried-ledgerx-nft-2021-9">three more trends he's watching</a>.4. Earnings on deck: Lennar Corp, Corporación Financiera Alba, and Karoon Gas Australia are all <a href="https://markets.businessinsider.com/earnings-calendar">reporting.</a> 5. Big companies like Shake Shack and Marriott are facing a labor shortage. Corporate leaders have noted hiring challenges as pandemic fears, stimulus checks and controversy over vaccines have ramped up. <a href="https://markets.businessinsider.com/news/stocks/shake-shack-marriott-johnson-company-executives-bemoan-painful-labor-shortage-2021-9">Here's what executives are saying about the problem. </a>6. The meme-stock boom is like the dot-com bubble, says a Moody Analytics researcher. Lily Francus warned traders not to get greedy, and dismissed the idea that retail traders spearheaded the short squeezes earlier this year.<a href="https://markets.businessinsider.com/news/stocks/lily-francus-moodys-analytics-gamestop-amc-crypto-meme-stocks-bubble-2021-9"> Read the key takeaways from her recent, wide-ranging interview</a>.7. Ether should be 55% lower, a JPMorgan strategist says. Based on measures of network activity, Ether's fair value is around $1,500, far lower than its current price. <a href="https://markets.businessinsider.com/news/currencies/ether-price-outlook-eth-solana-cardano-jpmorgan-blockchain-lower-competition-2021-9">Here's why he thinks blockchains such as solana and cardano are becoming more competitive with ether. </a>8. Tesla could see a boost as chip-shortage woes subside. According to Wedbush analyst Dan Ives, shares of the EV company could jump 32% in the next year as semiconductor supply increases and demand for EVs rises in the next year. Ives says<a href="https://markets.businessinsider.com/news/stocks/tesla-stock-price-target-ives-wedbush-chip-shortage-china-deliveries-2021-9"> Tesla is set to benefit from the coming "green tidal wave."</a>9. Meet eight strategists calling for a stock-market correction by the end of 2021. The mood is turning bearish on Wall Street as the S&amp;P 500 extends an impressive streak without a big drop. <a href="https://www.businessinsider.com/stock-market-correction-crash-wall-street-bearish-equities-investing-recommendations-2021-9">Read the experts' calls and their trading recommendations for a sell-off</a>. 10. Goldman Sachs is singling out stocks that are beating the market because of their histories of steady growth. These names are popular with investors due to worries about the economy and higher taxes. <a href="https://www.businessinsider.com/stock-picks-to-buy-market-leaders-quality-growth-goldman-sachs-2021-9">See 17 picks on the list</a>. Compiled by Phil Rosen. Feedback? Email <a href="mailto:prosen@insider.com">prosen@insider.com</a> or tweet <a href="https://twitter.com/philrosenn">@philrosenn</a>.Sign up for <a href="https://www.businessinsider.com/subscription/newsletter">more Insider newsletters here</a>.

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A star analyst compares the meme-stock boom to the dot-com bubble, warns investors not to get greedy, and highlights GameStop and AMC in a new interview. Here are the 11 best quotes.

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