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Trading: Primarily Energy but also a little Equities, Fixed Income, Metals, U308 and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,060 since Dec 2013
Thanks Given: 4,410
Thanks Received: 10,226
Andrew Sorkin in the NY Times Deal Book.
Words of warning
Andrew here. Let’s have an honest conversation about the mania around GameStop — and its larger implications.
Is there something fun about watching the little guys beat the big guys at their own game? Sure.
But that assumes that the game is over. It isn’t.
The truth is that many of the small investors who look like winners after pushing up shares of GameStop could soon become losers, especially those who jumped into the frenzy in the past day or so. And unlike the wealthy hedge-fund managers on the losing side of the trade so far — who probably have more than enough money to cover the mortgages on their second or third homes, if they have mortgages at all — many of these retail investors can’t afford to take a big hit.
Remember when a 20-year-old Robinhood trader killed himself last June after seeing a negative balance of $730,000 in his account?
There is a risk that this trading mania has already gone too far. It looks divorced from any sense of reality or fundamental analysis. On the day GameStop more than doubled in price, the broader stock market recorded its biggest decline in months.
In truth, saying aloud that some small investors may not fully understand the risks they are taking is an invitation for scorn from an angry mob online. I know because I’ve been on the receiving end of it. And it is a fair argument: The markets shouldn’t just serve professionals and wealthy elites — and for far too long, the markets have been rigged against the little guy.
When the GameStop music ends, there will be big losses and finger pointing. The speculators rarely blame themselves. Were brokerages too lax in allowing retail investors to trade options using leverage? Should the stock exchanges have jumped in? Where was the S.E.C.? And backers of GameStop may ask why more than 100 percent of the company’s shares could be shorted in the first place: Isn’t that manipulation?
So what happens next? Bands of investors are already pushing up the stocks of other companies like AMC, BlackBerry and Bed Bath & Beyond.
This likely won’t end well. But imagine a happy, fairy-tale ending to this story: Perhaps GameStop sells shares to reinvent itself. In this scenario, the company would raise billions of dollars to become a genuine e-commerce platform with its own games. Think of Netflix’s transformation from a DVD-by-mail company to a streaming giant. Perhaps GameStop and other beleaguered companies boosted by traders this week could use an unexpected windfall to make a similar leap. Still, a fairy tale is called a fairy tale for a reason.
The narrative by the media seems to always be something to the effect of, "...these poor people don't know what they're doing, and they're going to get hurt."
That may be so for some people, but I get a sense that a LOT of people just don't care. Interesting commentary from a reddit poster:
Well said my man or woman.
No regaling with tales of poor childhood or struggles. I think at this point this is a common denominator for the majority in on the movement.
The 1% truly do not understand the movement. They are using the same old tactics and are convinced we will be scared. The more they say I am stupid, and the more they say I will not win, only gives me more resolve. I have been told that I will fail more times than I can count.
Alot of us have watched for decades and felt cheated, deceived, or outright manipulated. Whether that is via stocks, pay structure in jobs, exclusivity, does not matter.
There is and has been a ruling class whose sole purpose is to retain power. They gaslight us into thinking they know what is best for us. 1% knows better than 99%.
This is not stocks, this is a financial revolution never seen before. And let's be honest, the outcome will be a governing revolution.
I yolo'd $54k yesterday, and set a buy order for another $12k (Look at my history). I am not a money man, I lost my job in February last year and used my severance and took a risk.
Thanks to my military service and entering the market in the middle of the COVID shit I am fortunate enough to be in my last semester for a Chemistry degree.
I don't want to live the life of Wallstreet. I just want to live my life. My kids will learn the value of hard work and honesty; hopefully, with less pitfalls than I have experienced.
Prior to this I invested for personal gain. This YOLO money I am truly willing to lose in pursuit of changing the system. I will hold beyond the peak, not because I am stupid, but because I know we have a better chance of breaking the system if we force the shorts to cover everything. Every last fucking cent.
I fucking mean it. I LOVE THIS STONK. $PEOPLE all in.
Edit: Spelling, and I'm Just a Believer $GME, The Idea
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals, U308 and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,060 since Dec 2013
Thanks Given: 4,410
Thanks Received: 10,226
Is it a revolution or is anti-short selling? I'm unlcear. Why is short selling considered to be evil. Short sellers routed out the fraud at Enron. They perform a roll in this market.
Right now this is great because the retailers are making money off of the pros. If this continues at some point that will reverse. Some will make money but most won't and then we will hear the crying.
Nothing wrong with short selling. The problem is these firms can borrow more shares for shorting than is in the float. This is bit of a unfair advantage to the retail trader who can only sell shorts what’s available.