Betting Rent on Meme Stocks: The Rational Side of Reckless Risk

How the housing crisis has contributed to the rise of financial nihilism.

Missing Middle Initiative, Sabrina Maddeaux, Mike Moffatt, and Meredith Martin

Feb 11, 2026

In this episode of Classonomics, we examine the rise of financial nihilism, the belief that when conventional paths to the middle class collapse, extreme risk can start to feel like the only rational option. From sports betting and prediction markets to meme stocks and cryptocurrency trading, the line between investing and gambling is increasingly blurred. These behaviours are not occurring in isolation; they are amplified by constant smartphone access, aggressive advertising, and social media stories that celebrate rare winners while obscuring widespread losses.

We explore how unaffordable housing reshapes financial decision making, why volatility can be more attractive than steady returns, and how desperation changes risk tolerance. The episode also looks at the demographic patterns behind these trends, the growing links between gambling and speculative investing, and the potential long-term consequences for financial stability if current conditions persist.

If an economy no longer rewards patience, saving, or diversification, what does responsible money management actually look like, and what would it take to restore a future young people can believe in?

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Below is an AI-generated transcript of the Missing Middle podcast, which has been lightly edited.

Sabrina Maddeaux: Hi, and welcome to the Missing Middle. I’m Sabrina Maddeaux.

Mike Moffatt: And I’m Mike Moffatt.

Sabrina Maddeaux: Today on Classonomics, we’re talking about the gamification of investing. Basically, if you can’t afford a home, no matter how much you save, does it actually make sense to start taking bigger, riskier financial bets?

Mike Moffatt: Whether it’s placing a large bet on a sports gambling site or investing your life savings in a single stock or Bitcoin? Have you ever made a really big bet? If so, let us know in the comments.

Sabrina Maddeaux: Before we dive into the meat of today’s episode, I want us to make sure we’re on the same page as the audience. So I think we should play a little bit of a rapid-fire game to outline the various ways people, but especially young men, are making high-risk, high-reward investments or just outright gambling. So we’re going to do this as quickly as possible.

Sabrina Maddeaux: What I’m going to do is give you the name of something, and you’re going to define what that actually is for us. Let’s start with Polymarket.

Mike Moffatt: It’s a prediction market where you can bet on the outcome of something. Whether it’s the next decision that the Federal Reserve makes or who’s going to win at the Super Bowl, you can place a bet. And if you’re right, you can win a lot of money.

Sabrina Maddeaux: Next up, meme stock.

Mike Moffatt: This is basically a stock on the stock market that’s gone viral or been a bit of a meme. So we saw this a few years ago with GameStop, AMC and a few other companies. And that virality tends to cause a lot of volatility in the stock. It tends to go up or down quite quickly.

Sabrina Maddeaux: Cryptocurrency.

Mike Moffatt: So it’s a digital currency designed to work through a computer network. It’s not reliant on any central authority as a government or bank. We had an episode on this recently when we were looking at stablecoins, which are one form of cryptocurrency.

Sabrina Maddeaux: And finally, online gambling.

Mike Moffatt: So this is online poker, that kind of thing. This has existed for about 20 years. So you’ll watch a hockey game, and you see those FanDuel or DraftKings commercials, that’s what we’re talking about here.

Sabrina Maddeaux: Now, Mike, have you used any of these platforms?

Mike Moffatt: I have used a prediction market before this. That’s the only one I’ve done, and I’ve never placed a big bet. I’m a very cautious person when it comes to money. I am Scottish, and I come to that naturally. So, no, I haven’t placed any big bets. How about you? Have you ever used any of these?

Sabrina Maddeaux: I’ve dabbled in cryptocurrency. Not in terms of placing big bets, but as part of a portfolio. But I’m like you, I’m pretty risk-averse. Gambling has never been my thing. I’m the daughter of an accountant, so no big bets here. Even if I had the money to make big bets.

The point that we’re trying to make is that taking high-risk, high-reward gambles on meme stocks or online sports betting has never been easier. It’s literally everywhere. But do we know anything about the actual demographics using these platforms?

Mike Moffatt: Absolutely. For professional stock trading, online or crypto trading or (if we go back to the late 90s) day trading, this tends to be overwhelmingly male, about a 70/30 split. Depending on the asset class, the age can differ a little bit, but it’s mostly the men doing this.

Sabrina Maddeaux: Now, I have a suspicion that when we talk about more traditional gambling, does that look a bit more balanced in terms of gender?

Mike Moffatt: Yeah, it does. It’s more of a 60/40 split. But we should also be clear that we can look at the number of people who participate in this activity, but there’s also the size of the bet. Not surprisingly to me, men tend to place much larger bets on average than women. This got me thinking of the parallels between placing a big bet on the Super Bowl, an election, a single stock, and buying some baseball cards as an investment. You can do them on your phone, and they involve the potential to win or lose a lot of money.

You could be waiting for a bus and placing these big bets, and they’ve all become incredibly normalized. You hear young people talking about this a lot. It’s not, for the most part, the kind of thing that’s done in secret. We view that a little bit differently than we viewed day trading in the 1990s on the stock market. We tend to think of one as gambling and the other as an investment. I’d love to get your view. Do you see it as being fundamentally different if you spend a lot of money on a single stock versus spending a lot of money on a sports gambling site, or buying Bitcoin? And if we are talking about a stock, do you see it fundamentally different if you’re putting a large sum of your life savings in Nvidia stock versus putting a lot in a meme stock?

Sabrina Maddeaux: I want to be fair. I don’t think day trading or retail investing or even investing in single stocks or even meme stocks is inherently bad. I mean, people participate in the market in different ways. I think there is sometimes problematic behaviour. Obviously, if you’re putting your entire life savings or more than you can afford and you’re going to miss next month’s rent if the stock goes down, that’s problematic behaviour. Or if you’re starting to get an addiction.

For me, the bigger issue is really sports gambling, but also the prediction markets. People are becoming addicted to these, and especially when you look at online sports, gambling, the advertising is everywhere, particularly geared towards young men, and it’s gamified as well. So this is really taking what we know is an addictive vice, gambling, and putting it into everyone’s palm of their hand, on their phone, 24 hours a day.

It’s something that, while certainly now part of culture and a lot of people talk about it and actively share that with their friends and families, at the same time, it’s not something that you necessarily know about. So people can get really into that cycle of debt in a way that isn’t visible, as it would have been in the past, when they’re going to a casino.

And from what I’ve heard anecdotally from parents or colleagues who have sons in that younger age range, early 20s, they’re all gambling. They’re spending a lot of money. Some of them have already encountered problems. And I don’t think we’re going to know the scale of the addiction and the problematic behaviour here, probably for another 5, 10, or even 15 years to come.

And then we’re going to look back and be like how did we let this happen? But I’d love to hear your thoughts on it.

Mike Moffatt: I think they’re pretty much aligned with yours. And I tend to make distinctions that first, when it comes to investing. I think we often over-focus on what the investment is and not so much on the diversification. So I don’t think there’s any problem holding Bitcoin in your portfolio or gold or silver or meme stocks as long as you are appropriately diversified. I think spending a lot of money on a single stock is not a good idea, regardless of what the stock is.

I go to tax because some of these investments you can hold in tax-free accounts and things like that, whereas other forms of investment you can’t. So I think you have to think of the tax implications.

The third is, are these investments zero-sum, positive-sum, or negative-sum? When you’re looking at stocks or even gold, silver, vintage baseball cards, what have you, they tend to appreciate over time, they tend to gain in value and hopefully at a higher rate than inflation. There’s volatility. These investments can and will go down from time to time. So there’s no guarantee of profit. But over time, on average, they will appreciate. Sports gambling, on the other hand, is inherently not just zero-sum but negative because the house is taking a cut. So it’s a lousy investment.

It really is closer to gambling. And a lot of it really is trying to get this endorphin rush. So you’re not doing it, going, Hey, I think this is the most brilliant use of my money. I want to watch the Super Bowl and make it more interesting. That’s fine. If you want to put 20 bucks on it, whatever. That’s okay. But when you are putting an entire paycheck on the outcome of a single kickoff, I think that’s where it becomes a problem.

Sabrina Maddeaux: Absolutely.

Mike Moffatt: But these activities actually might be more similar than they are different. And we have some evidence to back that up. We’ve got a research paper that we’ll link to in the show notes. But it turns out, the same demographics and often the same people who are engaging in high-risk sports gambling are also engaging in other types of high-risk investments or speculation or gambling.

Whether that’s placing large bets on a single meme stock, whether or not that’s buying Bitcoin, whether or not that’s doing high-frequency trading and so on. So I think, yes, there are distinctions between these activities. But it turns out, not surprisingly, the same types of folks who engage in one form of risky behaviour will often tend to engage in another.

Sabrina Maddeaux: That makes complete sense that there would be a link between the two, at least for some of the demographic participating in them. And so what stood out for me, from the paper, was that link between gambling and crypto trading. Crypto markets run 24/7 just like a casino, and prices can swing wildly. And speculation is the norm for a lot of people.

And while patient investors can profit over the long run, many traders, especially newcomers who may not be as diversified, are going into one cryptocurrency, face those short-term gains, trade impulsively and unfortunately often lose money. And it’s not surprising that these patterns have been linked to stress, financial harm, and addictive behaviours, especially as crypto becomes more intertwined with online gambling through blockchain-based platforms.

Studies show that frequent crypto trading is also associated with sports betting, fantasy sports, high-risk trading, and problem gambling. They found that people who engage in both gambling and crypto trading are more likely to experience gambling-related problems than those who only gamble. And so while I think these are two different types of investments, and I don’t want to imply that everyone who’s engaging in crypto has a problem with sports betting - certainly not - but there is undeniably risky behaviour that’s transferring between the two and coming together to create a culture where this is really normalized and, in some ways, predatory.

Mike Moffatt: I think you’re absolutely right. And, it’s not surprising that these behaviours are more engaged by young men. We listen to Scott Galloway a lot, and he talks about the fact that men’s frontal cortex doesn’t finish developing until mid 20s and that kind of thing. And, [young men] seem to be evolutionarily wired for that behaviour, so we shouldn’t be surprised that it happens.

As well, we shouldn’t be surprised that it’s been increasing. It’s just easier to do now. You can just pull out your phone. If I wanted to place a large sports bet when I was 19 or 20, that would have been a really difficult thing to do. Now people can do that. And it’s also way more normalized. I couldn’t have imagined in the 90s, watching a hockey game and them telling me what the line is and where I can bet and that kind of thing. And, now the ads on the side of the boards or the commercials are all sports gambling, gambling, gambling.

So I get why that’s increasing. But can you think of any other reasons why young men are engaging in this behaviour more? Other than simply is simply more convenient than it used to be, and is more advertised than it used to be.

Sabrina Maddeaux: I definitely can. It turns out that being completely priced out of homeownership actually changes how you think about money. And this isn’t just anecdotal. There’s real research on this. There’s a paper, and we’ll link to it in the show notes. And the title absolutely says it all. It’s titled, Giving Up: The Impact Of Decreasing Housing Affordability On Consumption, Work Effort And Investment. And here’s what they found: Housing has gotten so expensive that a lot of younger people have just stopped believing they’ll ever own a home.

The researchers looked at US data and found that people born in the 1990s are projected to retire, owning homes at rates about ten percentage points lower than their parents, which is huge. And here’s where it gets even more interesting: when people lose hope about homeownership, their entire financial behaviour shifts.

They spend more now, they work less hard, and they take way bigger financial risks because they just don’t see any other path through the traditional roots of working hard, starting a business or getting promoted. And also, why carefully save for decades if the goalpost keeps moving further and further away? Housing is going up, the cost of living, and inflation; there’s no way for many young people to save themselves into owning a home. Ever. Or, within a reasonable time period.

So when you think about it that way, it’s almost rational in a completely depressing way.

Everything comes back to housing.

Mike Moffatt: Yeah. It does.

So we have the housing theory of everything. That’s where it all comes back to. And when we were prepping for this episode, I came across the term Financial Nihilism. And that actually really struck a chord with me as the best way to think about it. And it’s this belief that the cost of real assets, like a home in southern Ontario, is so detached from wages that the only rational response is to take extreme risks.

So imagine you are a young man and you have $10,000 in life savings. And you need 100,000, 120,000, or 150,000 to afford a down payment for a home. It’s going to come across as bad advice if a guy like me says to put it in an ETF, and you’ll get about 9% a year. It’s like, great, I’ve gone from ten to 11 to 12. I’m not going to get to that $120,000 anytime soon.

So weirdly, this is a population that actually needs more volatility, and having a strong and steady climb is not that useful. You actually need those huge swings in order to have a chance at reaching a financial threshold. So volatility is actually quite helpful. So this lends itself to this attitude, where why not buy a high volatility stock? Or why not put my life savings and silver? And to be fair, if you did that a year ago, you’re looking really good right now. Put it into Shohei Ohtani's rookie cards, and maybe you’ll get lucky and be able to cash it in for a home. So it does seem to be quite rational when you look at it through that lens.

Sabrina Maddeaux: I guess the risk profile is: I’d rather have a very small chance of being able to cash in big and afford a home versus having no chance. Zero chance of affording a home. Which is how a lot of young people feel.

And then I think this is also propelled by social media, where some people have made it big, and those stories get promoted and amplified. Where it’s much less common to see anyone talk about their losses for obvious reasons.

Mike Moffatt: We often see the successes, because people don’t usually go online and go, I put all my money in XYZ Corp, and it went to zero. Right? You hear about the people who bought Bitcoin early, who were into silver 12 months ago or so on.

So, because of that, there are all these people you can point to and say that guy made a smart bet. He bought GameStop at the right time. I’ve got to follow that model. I’ve got to figure out what the next GameStop is and put all my money on it and get those 20-to-1, 30-to-1 returns.

Sabrina Maddeaux: And I think this is all part of a bigger cultural phenomenon for young people, which has been referred to as YOLO spending. (You only live once. That’s what YOLO is.) Spending where it’s not just about gambling or risky bets, but consuming more expensive things - even though people have trouble paying rent or saving for a home - like vacations, like luxury beauty items and also the explosion of buy now, pay later options as well.

And I also read an interesting newsletter the other day that suggested that the behaviours that lead men to engage in sports betting or gambling at higher rates, the female version of that, I think, shows up more in trying to become influencers. The chance of becoming the influencer who makes that $100,000 or even $1 million is also astronomical. It’s like placing a bet. You have so many women betting that they can be that one influencer. I think there’s a similar psychology there that I’d like to explore more at some point.

But the bottom line is that saving diligently when you don’t have a clear purpose for it feels hopeless. You can never see that home. It feels pointless. It’s very hard to directly save for a home or even your retirement when you’re 25-years-old and retirement feels way too far away to be tangible, and a trip to Europe or placing that bet is right there.

Mike Moffatt: Absolutely. And I’m going to be very male here and use a sports analogy. I think for those people in their mid 20s who want to own a home someday, or who want to hit the traditional middle class markers - it feels like you’re playing a hockey game and you’re down 10 nothing, halfway through the second period. You really only have two options. The first is you just stop playing defence, you pull the goalie, you just keep rushing the opponent’s net, play really recklessly, play like the Hansen brothers in Slapshot, and just go for it. And that’s the risky bet side.

The other way you can go with it is say, We’re down 10 nothing, let’s just forfeit. Let’s just give up. We’ll go to the bar, we’ll have a few beers instead, and we’ll watch somebody else play. And I think that one is the trip to Europe. It’s buying clothes with buy now, pay later. It’s spending $1,000 to go see Taylor Swift. It’s that kind of thing…

Sabrina Maddeaux: Okay, let’s not hate on Taylor Swift here Mike!

Mike Moffatt: We’ll get some notes from Cara, but that’s okay.

But the point remains that you’re going to just go, Savings are pointless. I might as well live for today. I might as well have fun. So I do think you see young people going in one of those two directions. And as you point out, I think there is a gendered element to it.

So with that really depressing thought in mind, what do you see as a solution to all this? Because we don’t want to just be negative for the sake of being negative. Ideally, we would like to fix this for sure.

Sabrina Maddeaux: And I think there are several different solutions. In my opinion, sports betting should go back to being basically illegal. I think the apps in everyone’s hands and the advertising are just so problematic. And if it’s not going to be banned again, then certainly we need advertising restrictions and other regulations that come into play to make it much more regulated, as traditional gambling would be.

I think having it constantly promoted and advertised in this way, so easily accessible with very little oversight, is going to lead to a lot of problems. And down the road, we’re going to say, How did we ever let that happen?

When it comes to investments in general? I mean, financial education in high school to learn about risk, the markets, investments, and diversification of portfolios. We’re letting 18-year-olds graduate into the world with very little knowledge of how this works. And before that was always problematic, but the path to getting into these types of markets, it would always involve an intermediary. Now there’s direct investing. It’s so much more accessible, and the knowledge isn’t there for a lot of people. So at least let’s equip people to make good decisions as much as they possibly can.

But ultimately, homeownership. Cost-of-living needs to become more affordable. Retirement needs to feel within reach. Young people need to feel like they have a future, because how can you expect them to plan for the future when they feel like there isn’t one?

Mike Moffatt: Absolutely. And I think we need to hit those two ways. That one is the advertising piece that you can’t have cigarette ads on televisions and during hockey games. I don’t know why we allow for gambling ads, because it has the same addictive qualities, breaking up families, the same way that alcohol can. So let’s just get it off the airwaves, that kind of thing.

But I do think, as well, we need to attack the root cause of the risky bets because, as we said, it can be rational under certain circumstances. So it just shows another reason why we need to attack the housing crisis. And in particular, we need to take homeownership seriously because that’s what they’re looking for.

A lot of times, the risky bet is not trying to pay next month’s rent, though I’m sure it is for some people. A lot of it is, Hey, I’m trying to be able to own a home someday, and I’m trying to be able to hit these middle-class markers.

So we need our governments to take home ownership, or at least the option of homeownership, more seriously and make it more accessible to young people. So they don’t feel like they have to make 20-to-1 bets in order to hit those middle-class markers.

Sabrina Maddeaux: It’s such an interesting topic, and I do hope it’s something we see policymakers discuss more, because it’s having really detrimental effects, especially on young men, who we often leave behind. And we did a great episode a few weeks ago about the status of young men these days. And we’ll link to that in the show notes as well.

I’d highly encourage people to watch it. Thank you so much, everyone, for watching and listening. And to our amazing producer, Meredith Martin and editor Sean Foreman.

Mike Moffatt: If you have any thoughts or questions about buying vintage baseball cards, please send us an email to the Missing Middle podcast at gmail.com.

Sabrina Maddeaux: And we’ll see you next time.