Silver, Bitcoin, and Palantir Prove That Chasing the ‘Hot Dot’ Is a Great Way to Lose Your Money

A painful lesson is playing out in real time right now across the stock market. 

Investors who have chased dozens of popular stocks and ETFs are now watching them come crashing back down. They fell into the trap of the “Hot Dot,” throwing out all the lessons from legends like Warren Buffett and Benjamin Graham. 

It’s not that traders aren’t nimble. In fact, new, nimble traders enter the market every day thanks to unprecedented access to high-quality investment data, such as the treasure trove available here at Barchart.com. 

Instead, it’s that the temptation to buy a stock or ETF simply “because it is up” is a natural, human emotion. 

Some would conclude that it’s retail investors falling prey to the “Hot Dot” trap, buying 52-week highs with reckless abandon. In my experience, it’s just as likely, if not more so, that professionals are stoking the “Hot Dot” flame. Advisors and money managers get paid to perform. Sometimes, that means their last resort is to chase. 

They call it “avoiding career suicide,” since they realize that clients will ultimately look at the S&P 500 Index ($SPX) as a benchmark, even if it does not bear much resemblance to their tolerance for risk. Such is life in modern, algorithmic-driven markets where the major indexes suck much the air out of the room.

The crowd loves a winner, especially when it’s moving straight up. When an asset starts hitting new highs day after day, it creates a powerful urge to jump in. 

People see the big gains and convince themselves that the upward move will never stop. Late-stage buyers rush in at the absolute peak of popularity, assuming yesterday’s performance guarantees tomorrow’s returns. This was the epitaph of the dot-com bubble, and many cycles before it. 

Some recent examples might help deliver a “scared straight” feeling that I hope inspires readers to second-guess their trading decisions. It was not long ago that these ETFs and stocks were flying. And now? Look at them.

 How Silver Lost Its Golden Touch in Record Time 

First, we’ll look at silver, in the form of the iShares Silver Trust (SLV), an ETF that tracks the price of that commodity. That’s nearly a double and then a halving, just during 2026 alone. When a stock price rises like one half of an isosceles triangle, it is time to double-check your research to make sure the other side isn’t coming next. As it did here, as well as with ETFs that track baskets of silver stocks.

How Bitcoin Went from Can’t-Miss to Can’t Recover

This chart of the iShares Bitcoin Trust (IBIT), the biggest of the dozen Bitcoin ETFs which “just had to get to market to compete for the fans’ love” in early 2024, has a chart that contains an irony tragic enough for a Shakespeare play. It opened its first full month of trading in March 2024 at a price $0.08 from where it closed this past Monday. 

That’s more than 27 months of up, down, and net nothing. But try convincing 2024 and 2025 Bitcoin bulls that there was any reasonable chance that IBIT would find its way to where it is currently. 

How Palantir Stock Went from Glamor Stock to Poster Child 

There are so many stocks that illustrate the “can’t miss” hype story, but Palantir (PLTR) is my favorite. PLTR is still hanging in there, but Monday’s 6% decline looks like another dent in the armor of this defense tech leader. 

It was king for a while, but after rocketing from $20 to over $200 in a span of 15 months, PLTR has fallen by 40% since Q4 2025. And from the looks of it, it could get much worse.

Why Do Popular Trades Go Bad? 

The companies and commodities themselves didn’t change overnight, but their prices had simply run too far ahead of the actual money changing hands. 

When everyone is standing on one side of the boat, the risk of a sharp reversal spikes. Let the crowd chase the immediate dopamine of a vertical chart – you don’t need to join them. Or at least manage your position sizes more carefully to avoid “set it and forget it” scenarios that reverse without notice. Because that is usually how it happens. Let those be a lesson to us!

Rob Isbitts created the ROAR Score, based on his 40+ years of technical analysis experience. ROAR helps DIY investors manage risk and create their own portfolios. For Rob’s written research, check out ETFYourself.com.