Business, Economics, and Taxes: Capitalism. Yay? >=(

[Handyman]

That's pretty good!


I will tell you that as I read that article, I had a sense of deja vu. That is literally the same article that was written about day traders, and the same article that was written about the online poker players 10-15 years ago.

Young, disillusioned, computer savvy, probably socially awkward, mostly men, who are basically willing to gamble in return for a possible big score. It's too bad, because 99% of them end up broke and have a 10 year setback in their financial lives, while all we hear about are the 1% who "made it" (although I still think it would be interesting to look back 20 years after they did "make it" and see if they "kept it.") The problem is, those 10 years that they are set back are important, simply due to the time value of money.

If you want to be rich today, take your student loans, go to Vegas, find a roulette table and put it all on red. You might go on a heck of a ride and come home with millions. Almost certainly not, but the chance is at least there.

No one wants to work hard, put the money away, watch it grow at a snails pace.

It is, in my opinion, simply a feature of lacking patience.

Its more than just lack of patience, it is a fundamental misunderstanding how things work. Just because a player wins the WSOP who happens to be an online player doesn't mean ANY online player can do so. It takes a lot of money at your disposal and a LOT of time to be that good. (I had a buddy who lost his shirt online gaming) Leaving aside that the online poker sites were very predatory, the prevailing idea that any shlub could play in his house and become a champion was intoxicating...and completely naïve. There are going to be better players than you. Even worse bad players can win a hand of poker. (I won a cheapo tournament once and I am a mediocre AT BEST player) The video game nature makes it feel like you are playing a computer game against similar people but for all you know you are at a table with professionals who have been playing for years and you give away the option of being able to read a table since you can't actually see the player in front of you. The higher the value of the game or tournament and the variety of levels of player means it is less likely it is you will come out on top. The ease of being able to add to your account is like popping speed while drinking a double expresso. No more having to take out cash you can just hit ok and the money shows up! Next thing you know you lost your rent...

People like the guy "Omar" in the article (I am only halfway through but I want to highlight him) are the problem imho not WSB. (they are a different type of problem which I will discuss) He barely understands what he is doing. He is obviously not researching into the type of trading he is doing, the value of the stock or option he is taking or the massive amount of risk involved. He is the type you were describing the other day. He is young, lazy and stupid. He is going to do something stupid in some capacity because, again, he isn't paying attention or putting in the time. (the curse of being young) He thinks he is playing the same game with the same rules as the Dude Bros are. He isn't. Many of them can take the loss and not wipe out their bankrolls. They also have more of a knowledge base on how the market works. Just because they talk the same as you and use the same memes doesn't mean you are the same. They aren't that much different than the people they demonize, they just choose to work amongst themselves. I know people with MBAs who would have trouble discussion options trading and short squeezes...if you aren't educated in how finance and the market works you shouldn't even be part of the conversation.

The Dude Bros are a combination of dealers and con-men when it comes to how they deal with people like "Omar". Many of their risky and volatile moves require uninitiated people like him to be a part of it. They make it seem like the risk is worth the reward because they never truly explain the risk but talk about the massive amounts of gains that could happen. Who wouldn't risk a few grand for a chance at generational wealth? People play the lottery every day and there is a better chance this scheme works! (is the type of rationale they use) You feel like you are part of a community, everyone on a quest for treasure. Meanwhile like every great ponzi scheme only the people who are in charge of the game are really making any money. That is why they can't let anyone dump the stock in numbers that would actually let people like Omar get rich. Doing so would kill their better position. Omar needs to lose his shirt for the Dude Bros to maximize their money. That is why the Dude Bros are acting like this is a sacred quest...we have seen the things people will do if they feel they are part of a righteous cause. People still send Q frauds money...

This is where cynicism is always your best friend. Get rich quick schemes are fun but there is a reason why they are schemes and no one ever seems to be rich who deal with them. Never bet your whole bankroll, and never expect that every choice you make is going to be the right one. Put the time and effort into learning. Knowledge is power. The odds are never going to be in your favor but there are ways to bring them better in your favor. Then get out when you get to a solid point. This shouldn't be a contest of who is most loyal and who gets the highest return, it should be about what is enough money for you to get your value out of the risk you took. Cash out and be happy. And for God's sakes if you have a bunch of people you hardly know in much stronger positions telling you to keep going question why they want that. No one is that altruistic...and even a rudimentary understanding of the scheme they are running would tell you they are acting in just as bad a faith as the hedge funds are when they go on tv to talk down a stock they are shorting. Just because these guys think your memes are funny doesn't mean they aren't in it for themselves. They aren't going to pay your mortgage when you lose everything.

[BassAle]

He barely understands what he is doing. He is obviously not researching into the type of trading he is doing, the value of the stock or option he is taking or the massive amount of risk involved

This is _most_ of WSB.

and they celebrate making insanely risky plays that will probably blow up

[jerphisch]

That's pretty good!


I will tell you that as I read that article, I had a sense of deja vu. That is literally the same article that was written about day traders, and the same article that was written about the online poker players 10-15 years ago.

Young, disillusioned, computer savvy, probably socially awkward, mostly men, who are basically willing to gamble in return for a possible big score. It's too bad, because 99% of them end up broke and have a 10 year setback in their financial lives, while all we hear about are the 1% who "made it" (although I still think it would be interesting to look back 20 years after they did "make it" and see if they "kept it.") The problem is, those 10 years that they are set back are important, simply due to the time value of money.

If you want to be rich today, take your student loans, go to Vegas, find a roulette table and put it all on red. You might go on a heck of a ride and come home with millions. Almost certainly not, but the chance is at least there.

No one wants to work hard, put the money away, watch it grow at a snails pace.

It is, in my opinion, simply a feature of lacking patience.

You don't become rich by working hard and saving, you become comfortable. I'm pretty sure no one becomes rich, you're either born rich or you aren't, and there ain't no changing that. I think one quintile of mobility is all that's statistically possible, anything else is an outlier. There's nothing wrong with being comfortable, but that's not what kids are taught. It isn't a lack of patience, it's that we've been programmed with unrealistic expectations. The ONLY way to achieve them is the Vegas approach.

[aparch]

This just got interesting. Short sellers are digging in and will absorb losses to prove their point.

So, the initial wave of the squeeze helped pinch the short sellers, but now a new wave of short sellers have jumped on to ride this new high straight into the ground.

We all know that $300+ is not where Gamestop stock should be at. Pretty much *everyone* is in agreement with that. So now new short sellers have jumped in, causing Gamestop to still be the most shorted company at over 113%.

The interesting thing is those who sell shares to shorts are making note of the demand to ride the crash: the cost-to-borrow is now at 29% for existing shorts and over 50% on new shorts.

Everyone is now sticking their hand out for a slice of this.

[French Rage]

This just got interesting. Short sellers are digging in and will absorb losses to prove their point.

So, the initial wave of the squeeze helped pinch the short sellers, but now a new wave of short sellers have jumped on to ride this new high straight into the ground.

We all know that $300+ is not where Gamestop stock should be at. Pretty much *everyone* is in agreement with that. So now new short sellers have jumped in, causing Gamestop to still be the most shorted company at over 113%.

The interesting thing is those who sell shares to shorts are making note of the demand to ride the crash: the cost-to-borrow is now at 29% for existing shorts and over 50% on new shorts.

Everyone is now sticking their hand out for a slice of this.

What is the old line, the people who made money in the Gold Rush weren't the people prospecting for gold but those selling all of the supplies? There's a lot of money to be made when a price is bouncing all around rather than staying steady.

[Kepler]

What is the old line, the people who made money in the Gold Rush weren't the people prospecting for gold but those selling all of the supplies? There's a lot of money to be made when a price is bouncing all around rather than staying steady.

Isn't the how Dump's GGF actually made his pile? I'm not joking.

[French Rage]

Isn't the how Dump's GGF actually made his pile? I'm not joking.

I thought he ran the Canadian cathouse with hoser hookers?

[aparch]

I thought he ran the Canadian cathouse with hoser hookers?

Like you said... supplies for the gold miners.

[Kepler]

GME's 52-week hi/lo is 483/3.

[Handyman]

This is _most_ of WSB.

and they celebrate making insanely risky plays that will probably blow up

My father likes stupid schemes like that so I have always been skeptical. People like that are the ones you see at the track who bet thousands on races by throwing high volume into exactas and trifectas but don't cover it with bets on individual horses. They will brag to high heaven about their big wins but always forget to mention the huge losses. Easiest way to spot a mark...

If you are gambling for fun (i.e. expecting you likely won't win) then stuff like that can be great to be a part of. If you are gambling because you NEED to either due to finances or addiction then you are better off just handing your money over and saving your time. The movie myth of being down to you last quarter and hitting three 7s in Vegas or making the miracle 30 number roll in craps is not going to happen.

If it seems too good to be true...

[aparch]

GME's 52-week hi/lo is 483/3.

The other thing I can't figure out is why the short sellers picked *now* to gang up on Gamestop. New consoles just got released last fall, there is still *big* demand for the new consoles, AND Microsoft made an agreement with Gamestop where a portion of their (MS's) digital games sales gets sent to Gamestop as a thank you. And this was already after their pandemic lows.

Like... wait until the new system sales cool?

[aparch]

...They will brag to high heaven about their big wins but always forget to mention the huge losses. Easiest way to spot a mark...
...

Every retiree I know from my hometown who are habitual "casino bus" players do this.

Kinda explains why FOX News is prevelent in that same area...

[Handyman]

What is the old line, the people who made money in the Gold Rush weren't the people prospecting for gold but those selling all of the supplies? There's a lot of money to be made when a price is bouncing all around rather than staying steady.

Bingo. Gold/Silver/Turquoise towns popped up everywhere for a reason. once again though usually people stuck around too long and the late arrivals always lost their shirt.

[SJHovey]

This is _most_ of WSB.

and they celebrate making insanely risky plays that will probably blow up

That is exactly what I think, too.

[Handyman]

The other thing I can't figure out is why the short sellers picked *now* to gang up on Gamestop. New consoles just got released last fall, there is still *big* demand for the new consoles, AND Microsoft made an agreement with Gamestop where a portion of their (MS's) digital games sales gets sent to Gamestop as a thank you. And this was already after their pandemic lows.

Like... wait until the new system sales cool?

I would assume it is because even with all of that GME was not expected to gain a lot and probably wouldnt have by today even with the announcement. If it wasnt for WSB those shorts were pretty safe. Not as safe as shorting say AMC but still pretty solid. GME was not in a great position. (from what I can tell based on analysis after the fact)