Opinion – Marcos de Vasconcellos: The spearhead of the financial market was caught on the back foot

In 2013 and 2014, newsstands — good thermometers of that reality — put magazines on speedboats, cars and lifestyle in the spotlight. It was clear that the injections of credit had taken consumption too high and that it would become unsustainable.

Predicting the past is easy, but the result of the last commodity cycle was gone, the 2015 and 2016 recession imposed itself, and Brazilians had to relearn how to use their money. At the end of the decade, interest rates declined, reaching historically low levels, the return received by the venture risk became more interesting.

Now, the highlights of the newsstands are gondolas with toys and sweets and refrigerators with soda and beer. Entrepreneurship, by necessity or opportunity, took shape and hypertrophied.

With so many people undertaking it, with risk paying high returns, the number of investors has exploded. Brazil, “paradise of rentiers” —who earn with the money stopped—, started to bring opportunities for those who were willing to run for the Stock Exchange. From 500,000 investors on the Stock Exchange in 2016, we went to 5 million this year.

Internet advertising (the new thermometer of reality) was filled with ads related to this new market. On YouTube, calls from Empiricus (which sells investment reports); videos from Primo Rico (which gives lessons on how to invest); and TC (investor information platform) announcements took over the screens.

Of course, because I’m in the middle, my browsing is affected by the omnipresent algorithm, but the volume invested in the expansion of this new financial market is undeniable. Nubank’s IPO (NUBR33) raised US$ 2.6 billion (almost R$ 13 billion) in December 2021. TC (TRAD3) raised another R$ 607 million in July.

In early 2022, I heard from the owner of a financial services company with hundreds of employees: “We know everything in this industry is overpriced and we’re wasting money now just in time to get into that bubble, before it goes back to reality prices.” .

Now, it became clear that the shock of the new reality knocked on the door of those who surfed the wave. Three major layoffs were announced this month alone.

A year after being bought by the bank BTG Pactual, for R$ 690 million, Empiricus laid off 12% of the employees of the four companies in the group. Grupo Primo, owned by Thiago Nigro, of the O Primo Rico channel, announced a 20% cut in staff. 2TM, owner of Mercado Bitcoin (cryptocurrency exchange), announced cuts that, according to news, reach 90 people.

The financial services company whose owner wanted to “bubble-surf” appears to have burned more money than it could and is now accused of withholding money from hundreds of customers.

Stepping back in the timeline is essential to understanding cyclic movement. And that opportunities in the financial market always exist, but excesses are usually punished by time. To enjoy the waves, you need to have a wallet that can withstand changes in the tide.

We are in a new cycle of high commodities, inflation and basic interest rates. Ignoring this is a sin with your money, just like ignoring that this will soon change and that the stocks that are “crumpled” today will take up space in the market when credit returns. With balance and rationality, all it takes is small adjustments to avoid getting caught in the underfoot.