It’s the sentiment that matters, particularly when it comes to the concept of dumbest investments of 2021.

According to English economist John Maynard Keynes, the market can remain irrational longer than you can remain solvent. The quote may be apocryphal according to Jason Zweig of the Wall Street Journal, but it rings true for a reason.

You’ll recall that in the years prior to the novel coronavirus pandemic, mainstream business headlines constantly ran stories about how millennials were not investing in the markets and therefore were falling behind in terms of wealth-building compared to prior generations.

When Covid-19 become our everyday reality, though, everybody was a day trader. While this bolstered market engagement, it also led to some of the dumbest investments.

Don’t get me wrong. Clearly, many of the dumbest investments of 2021 made people millionaires.

According to The Guardian, the world gained 5.2 million millionaires last year during the Covid crisis. That’s just so awesome, which brings me to the real victim of this pandemic: China.

The international community blasted the Chinese government for its handling of the pandemic but why? It was because of Covid that the dumbest investments actually became profitable.

Would toilet paper command a golden premium? Since when did everyone become an epidemiologist? And what is so gosh-darn special about a strip mall retailer?

These questions would ordinarily leave the dumbest investments of 2021 where they typically belong: in the trash heap. Instead, the unique circumstances that the global health crisis catalyzed made for some incredibly powerful (though far-fetched) ideas.

Of course, I was being facetious earlier: I don’t think Covid-19 was in any way a positive, but that also drives the lasting point we should all take away from this.

Yes, let’s marvel for a moment at these dumbest investments of 2021 but let’s also not forget that eventually, the fundamentals matter.

• Bitcoin (CCC:BTC-USD)
• Dogecoin (CCC:DOGE-USD)
• GameStop (NYSE:GME)
• Consol Energy (NYSE:CEIX)
• Naked Brand (NASDAQ:NAKD)
• Koss Corporation (NASDAQ:KOSS)
• Dillard’s (NYSE:DDS)

Bitcoin (BTC)

Just to let you know that there are no hard feelings regarding this article of dumbest investments, I’m going to lead off with a few names that I personally own. Considering the scope and scale of its euphoria, I don’t think there’s any riskier idea than Bitcoin.

Woah, hold the phone there, buddy! Don’t you own BTC? Yes, and that’s exactly the point. Just because a market idea is classified as one of the dumbest investments doesn’t necessarily mean it can’t make people money.

As I’ve written about multiple times, Bitcoin — and perhaps Elon Musk — changed my life.

But there are two reasons why I think Bitcoin is contextually a dumb idea. First, its power comes from participation. Thus, no participation equals no power.

In contrast, major fiat currencies have incredible “intrinsic” power because governments force you to participate. Don’t believe me? Look at what the IRS did to Wesley Snipes, even though some questions exist regarding allegations of tax evasion.

Second, neither Bitcoin nor any other cryptocurrency democratized wealth disparities. Indeed, the wealth gap is still gapping. Once people realize that, BTC could face a correction.

Dogecoin (DOGE)

While I understand that so many meme cryptos have sprouted since the mainstreaming of Dogecoin, I must still give credit to the one that started it all.

Ironically, the digital asset that started off as a joke became no laughing matter, generating astounding profits thanks in part to the law of small numbers.

To clarify, I’ve written many supportive commentaries about Dogecoin and other meme coins and tokens not because they’re intrinsically valuable but because, in my humble opinion, they offer better risk-reward profiles compared to Bitcoin.

Long story short, it’s better to take a small bet with a higher reward potential than the other way around.

In and of itself, I don’t see how you can’t classify DOGE as one of the dumbest investments of 2021 that made people millionaires.

On one hand, you’ve got to give credit to those who took bold moves to generate lifesaving profits. On the other hand, such stories encourage mass-scale speculative behavior, which inevitably ends poorly at some point.

When that point is, however, is the big question mark. All I can say is be extremely careful if you’re getting in now.

GameStop (GME)

When you’re dealing with the random walk that is the financial market, you’re going to come across some hits and misses.

Looking back at some of my write-ups over the post-Covid years, I might, unfortunately, earn a reputation for being a whisperer of the dumbest investments.

You see, before seemingly everyone was going nuts about strip-mall retailer GameStop, I was urging people to consider the company’s contrarian bullish case.

Even more so, on the disclosure at the end of my article, I mentioned that I was seriously considering acquiring GME stock. The time was June 1, 2020, when shares traded hands for a little more than $4 a pop.

Back then, I was thinking GME could be due for a two-banger, maybe a three. Instead, it banged out a multiple that I thought extended well beyond the boundaries of credulity.

Of course, I can appreciate the moral directive that saw GameStop soar to the moon. Essentially, traders took the opposite bet of the shorts and went long on a company that fundamentally appeared destined for bankruptcy.

However, I’m not sure if this business model can sustain itself so be careful if you’re not playing with house money.

Consol Energy (CEIX)

Sometimes, the dumbest investments are not necessarily based on intellectually flawed reasoning or merely the product of fortuitous wagers.

Instead, they can be genius moves, capturing the sentiment of the time, which is exactly what’s going on with Consol Energy.

One of the few and the proud, Consol Energy specializes in coal. While an anachronistic energy source, it still represents a significant source of primary energy consumption in the U.S. at 10%, according to the Energy Information Administration.

But that alone didn’t contribute to the dramatic rise of CEIX stock. Instead, the world is facing a coal shortage, particularly in India.

As demand for the energy source skyrockets, many nations have turned to hydrocarbons, especially with a projected colder-than-normal winter coming. Naturally, this dynamic has contributed to the rising gasoline prices that we’re all suffering from.

In fact, I recently wrote a piece about hedging higher oil prices through purchasing shares of coal stocks. Therefore, I don’t consider Consol Energy as one of the dumbest investments in a contextual sense.

I just worry that broadcasted success stories will lead people into trades they shouldn’t be engaging.

If you do buy coal stocks, just be careful that their narrative can turn, depending on how this unique crisis pans out.

Naked Brand (NAKD)

Easily one of the dumbest investments that delivered extraordinary gains for speculators in 2021, Naked Brand remains a remarkable trade.

Since its January peak to the time of writing price of 64 cents, NAKD stock has hemorrhaged nearly 62%. Yet on a year-to-date basis, shares are up a staggering 188%.

Again, I must emphasize here that just because a publicly-traded company is one of the dumbest investments of the year doesn’t mean it hasn’t been incredibly profitable for the fortunate gamblers.

Whether Naked Brand is a worthwhile investment moving forward is really the main inquiry, though, and celebrations of past profitability shouldn’t detract you from extracting an objective answer.

While ardent proponents of NAKD will likely object fiercely, from an outsider’s perspective, it’s hard not to view its rise as primarily the product of speculation.

When you look at the top performers of the Covid years, many if not most of them featured narratives tied to the crisis. Though Naked’s core products of intimate apparel are important, the brand itself isn’t a must-have (especially since millennials tend to not care about labels).

If you’re still adamant about NAKD, just be careful: other speculative names have stolen its thunder.

Koss Corporation (KOSS)

Koss Corporation has made the absurd a reality over the past 11 months.

From its closing peak in January to the time of writing price of $14.03, KOSS stock has dropped an unfathomable 77% of market value. Yet shares are up 358% on a YTD basis.

At the beginning of this year, KOSS closed its first session at $3.19. By Jan. 29, you could buy the equity unit but it would cost you, $64 to be exact.

So inside one month, KOSS pulled off a 20X return. Hopefully, if you did acquire shares, you did so on the earlier end of the spectrum.

Since its dramatic rise, the stock has suffered an equally crushing low. While the meme crowd devastated anyone “silly” enough to short the company, the fundamentals couldn’t be papered over indefinitely.

In my view, the main challenge with Koss is that its headphone products aren’t particularly distinct. Plus, it’s an extremely saturated and competitive market.

You can hate me, but I wouldn’t touch shares at this juncture.

Dillard’s (DDS)

I hesitate to put department store chain Dillard’s on this list of dumbest investments because it’s very much a debatable inclusion.

As I’ve discussed myself with my interview with CGTN America anchor Rachelle Akuffo, retail revenge is a very real concept. After having been cooped up in their homes for a year or longer, millions of Americans are ready to reclaim their lives.

Therefore, I understand that people will flock to physical retail channels in part because they want to and also because doing so makes them feel human again.

For one thing, the intensity of online shopping has declined from its peak during the second quarter of 2020. Second, Americans are sitting on a crisis savings war chest of $2.7 trillion, according to Bloomberg.

It’s no surprise, then, that retail stocks have boomed. But with DDS soaring 551% on a YTD basis, I have to question if sentiment hasn’t gotten out of hand.

Sure, the company has been delivering impressive quarterly performances but it remains to be seen whether this trend will continue into 2022 and beyond.

Simultaneously, I get it but I don’t. If you want to venture in, do so extremely cautiously.

On the date of publication, Josh Enomoto held a LONG position in BTC, DOGE and GME. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.