8 ms·

I've wrote this elsewhere. The thing that's clicked for me after reading the comments on wsb is that populism, amplified by the modern internet, is going to rad

I've wrote this elsewhere. The thing that's clicked for me after reading the comments on wsb is that populism, amplified by the modern internet, is going to radically change the finance world in a similar way to how it radically changed our political landscape. These people aren't just investing in GME to enrich themselves. They are doing it to spite the people who they percieve as rigging the game. They are doing it to poke in the eye of "mainstream media talking heads" whom they view as part of the controlled narrative of oligarchs. Does any of this sound familiar? This is a once in a life time black swan. No one is factoring in populism in their investment thesis yet. Whoever can figure out populism well enough to predict it first stands to gain a lot of money.

0b01 6y ago
In fact, Citadel Securities has gained a lot money from the $GME event. Citadel Securities pays tens of millions of dollars for Robinhood order flow.
- Centigonal 6y ago
  Is Citadel really making a lot of money from the GME squeeze? I know they rebate Robinhood for order flow (I've even commented about it [1]), but I thought events like this were hard for MM firms to capitalize on because of the unpredictable nature of the price action and the high cost of hedging (there are no shorts available, how do you even delta hedge in that situation?). Am I missing something? [1] https://news.ycombinator.com/item?id=25217794 https://news.ycombinator.com/item?id=25217794
  - 0b01 6y ago
    It's very hard to miss the most actively traded option of the day.
  - gpm 6y ago
    Citadel is a market maker on the nyse... They can naked short GME.
  - deleted 6y ago
    [deleted]
admax88q 6y ago
I think this is more like beanie babies all over again. Except now that its easier to trade its happening in stocks. Populism of a companies stock doesnt really change the performance of that company. GME will implode eventually and the newest suckers or WSB will be left holding the bag.
- paxys 6y ago
  The difference is that our economy wasn't held together by beanie babies. A stock market crash has very wide ranging effects, not only to bankers but also retirees, blue collar workers, homeowners, new graduates and basically everyone else.
  - chii 6y ago
    > A stock market crash has very wide ranging effects, not only to bankers but also retirees, blue collar workers, homeowners, new graduates and basically everyone else. only has such an effect if those people who invested in the stock market has more than their risk tolerance invested.
- hn_throwaway_99 6y ago
  If you look at WSB's posts though, it's nothing like beanie babies. People don't think this is going to go on forever. Posts where people lost a ton routinely make it to the top. If anything, WSB celebrates the crazy volatility that can occur with the stocks of interest, and with it the chance to either win big or lose big. Now, r/bitcoin on the other hand...
- IIAOPSW 6y ago
  You're not quite getting what I'm saying. A bubble like beanie babies and dutch tulips is still a logical consequence of seeking financial gain. A bubble is a game of chicken. It is about knowing when to jump off. This is a new phenomena. It is no longer about just making the bull thesis or the bear thesis. It is now persuasive to make the "this will fuck over a hedge fund manager" thesis. We need to add an entirely new animal to the metaphor.
pxue 6y ago
this is exactly it. people say the market is a melt up.. another bubble. but i think that's wrong. It's like the show Billions, actual wallstreet does what wsb is doing ALL THE TIME. You make money when someone else loses money, it's simple. Except this time, the money isn't staying in the fraternity, it's being distributed out to the common folks. Can't have that it seems.
- in3d 6y ago
  Common folks who get in late in the bubble will be the ones who will suffer. This populist mindset that you’re somehow sticking it to big banks or something by paying for trading is funny.
  - pas 6y ago
    It's not zero-sum. Central banks are printing money. People put their gov checks into ETFs. Sure, eventually there'll be a reckoning.
  - djeiasbsbo 6y ago
    In this case they have actually a pretty interesting goal and motivation. They chose GME because it had a short ratio of 138%. Basically, big hedge funds were betting on the downfall and demise of this stock excessively. What WSB daytraders are trying to do is to bleed out these hedge funds by buying in and holding. The stock doesn't even have to increase and the damage to the big hedge funds is already happening, see the situation that Melvin Capital is in. To those who participate it is a david vs. goliath situation. The thing is, what they are trying to do is not that dumb and actually quite interesting, but they won't get anywhere by remaining "civil". They need this to spread and be on the frontpage of Reddit constantly. Negative or positive press helps, because more regular people want to participate if they hear about it. I think that this will go down in history. Constant timeouts, organised selling at certain intervals, unnatural spikes, we've yet to hear about the shady stuff that keeps this stock from surging even faster considering the current "virality".
  - kyawzazaw 6y ago
    Melvin Capital just got bailed out.
ffggvv 6y ago
i think it’s just cheap rationalizations and emotional involvement in the trade. they are pretending melvin capital is the root of all evil. just like they harassed andrew left and attacked his family just for him saying he disagrees with the stock
Mobleysoft 6y ago
I'm up 180% over the year. Peanuts compared to the WSB people, but I got there with my own intuition. I'm looking into food and entertainment for my next picks. I think the populace will need them over the next year before a general return to the before times mid 2022. We'll see.
- neuronic 6y ago
  > general return to the before times mid 2022 But will this happen? Massive inflation post-Covid isn't really that far fetched. I think there will be no return to the beforeworld.
  - Mobleysoft 6y ago
    Every action has an equal and opposite reaction. While the Covid deaths have been incredibly tragic, the 330 of 333 million Americans that survive, and that's assuming the virus and it's variants take 2.5 million more lives before its done with us, will be eager for a return to normalcy, if not outright partying like it's 1999. The play I tried to make last night and wasn't able to get filled today, Bloomin Brands, owner of Outback Steakhouse and other mainstream restaurants that can survive this down turn no matter how long it lasts, is up 1400% since I under bid on that strike and expiry date at 2am this morning. I'm not saying your prediction is guaranteed wrong, but I'm willing to bet against it, and 86% of my call picks are green at the moment, whatever the probability of that might be. The only one that isn't, China Unicom (CHU), essentially got delisted by executive order because the last administration didn't want Americans being able to invest in firms with ties to China's military, such as the largest provider of cell phone service for 1.4 billion people. The pandemic has been an incredible tragedy for so many human beings. I'm trying to position myself to be able to do something about it when the next one comes, which it inevitably will, as the universe trends towards entropy. But I won't be able to do it without capital, so it's worth the risk. Worst case scenario, I'm still a one man consulting shop serving the firms that keep the water running. Barring that, I guess we're hunting and gathering again, and I'm pretty good with a bow. Hopefully it doesn't come to that, and we can all look back at these present days like one of many possible filters we managed to survive on our way to colonizing the stars. That's the future I'd rather plan for, anyway. Albeit while hedging my bets.
in3d 6y ago
Of course knowledgeable players are factoring in populism. Why do think Robintrack was shut down for example?
konjin 6y ago
If this helps anyone: I bought options for Palantir because whats his face is a vampire. I will continue my vampire based trading ~~strategy~~ gambling, so all CEO better start stealing blood from teenagers if they want my money.
- thrwyoilarticle 6y ago
  I bet on housing because betting against housing is betting that politicians will stop catering to homeowners for the benefit of wider productivity and social mobility. I'm willing to incorporate your vampire take into my greater bastard theory.
hacker_9 6y ago
Psychology has always been part of the market, and this event can be explained by Soros' theory of reflexivity - that the stock market leads the fundementals, not the other way around. Once you forgo the efficient market hypothesis (and it's never been more obvious how incorrect this is), this event makes more sense. Same as Tesla, momentum is a psychological event lead by a positive feedback loop.
- chii 6y ago
  why do you need to forgo the efficient market hypothesis? The market as a whole takes into account the psychology of people as well, because peole participating in the market do so.
  - justforyou 6y ago
    There's nothing efficient or concrete about psychology.
  - delaaxe 6y ago
    Not a single person who believed in the efficient market hypothesis ever made a lot of money.
TrackerFF 6y ago
WSB are the old stock forums / discussion boards on steroids. Back in the day, people used to pump stocks on these smaller discussion boards. Difference is, WSB has 10^6 more members. And everyone can trade via Robinhood these days.

0b01 6y ago

In fact, Citadel Securities has gained a lot money from the $GME event. Citadel Securities pays tens of millions of dollars for Robinhood order flow.

Centigonal 6y ago
Is Citadel really making a lot of money from the GME squeeze? I know they rebate Robinhood for order flow (I've even commented about it [1]), but I thought events like this were hard for MM firms to capitalize on because of the unpredictable nature of the price action and the high cost of hedging (there are no shorts available, how do you even delta hedge in that situation?). Am I missing something? [1] https://news.ycombinator.com/item?id=25217794 https://news.ycombinator.com/item?id=25217794
- 0b01 6y ago
  It's very hard to miss the most actively traded option of the day.
- gpm 6y ago
  Citadel is a market maker on the nyse... They can naked short GME.
- deleted 6y ago
  [deleted]

admax88q 6y ago

I think this is more like beanie babies all over again. Except now that its easier to trade its happening in stocks. Populism of a companies stock doesnt really change the performance of that company. GME will implode eventually and the newest suckers or WSB will be left holding the bag.

paxys 6y ago
The difference is that our economy wasn't held together by beanie babies. A stock market crash has very wide ranging effects, not only to bankers but also retirees, blue collar workers, homeowners, new graduates and basically everyone else.
- chii 6y ago
  > A stock market crash has very wide ranging effects, not only to bankers but also retirees, blue collar workers, homeowners, new graduates and basically everyone else. only has such an effect if those people who invested in the stock market has more than their risk tolerance invested.
hn_throwaway_99 6y ago
If you look at WSB's posts though, it's nothing like beanie babies. People don't think this is going to go on forever. Posts where people lost a ton routinely make it to the top. If anything, WSB celebrates the crazy volatility that can occur with the stocks of interest, and with it the chance to either win big or lose big. Now, r/bitcoin on the other hand...
IIAOPSW 6y ago
You're not quite getting what I'm saying. A bubble like beanie babies and dutch tulips is still a logical consequence of seeking financial gain. A bubble is a game of chicken. It is about knowing when to jump off. This is a new phenomena. It is no longer about just making the bull thesis or the bear thesis. It is now persuasive to make the "this will fuck over a hedge fund manager" thesis. We need to add an entirely new animal to the metaphor.

pxue 6y ago

this is exactly it. people say the market is a melt up.. another bubble. but i think that's wrong. It's like the show Billions, actual wallstreet does what wsb is doing ALL THE TIME. You make money when someone else loses money, it's simple. Except this time, the money isn't staying in the fraternity, it's being distributed out to the common folks. Can't have that it seems.

in3d 6y ago
Common folks who get in late in the bubble will be the ones who will suffer. This populist mindset that you’re somehow sticking it to big banks or something by paying for trading is funny.
- pas 6y ago
  It's not zero-sum. Central banks are printing money. People put their gov checks into ETFs. Sure, eventually there'll be a reckoning.
- djeiasbsbo 6y ago
  In this case they have actually a pretty interesting goal and motivation. They chose GME because it had a short ratio of 138%. Basically, big hedge funds were betting on the downfall and demise of this stock excessively. What WSB daytraders are trying to do is to bleed out these hedge funds by buying in and holding. The stock doesn't even have to increase and the damage to the big hedge funds is already happening, see the situation that Melvin Capital is in. To those who participate it is a david vs. goliath situation. The thing is, what they are trying to do is not that dumb and actually quite interesting, but they won't get anywhere by remaining "civil". They need this to spread and be on the frontpage of Reddit constantly. Negative or positive press helps, because more regular people want to participate if they hear about it. I think that this will go down in history. Constant timeouts, organised selling at certain intervals, unnatural spikes, we've yet to hear about the shady stuff that keeps this stock from surging even faster considering the current "virality".
- kyawzazaw 6y ago
  Melvin Capital just got bailed out.

ffggvv 6y ago

i think it’s just cheap rationalizations and emotional involvement in the trade. they are pretending melvin capital is the root of all evil. just like they harassed andrew left and attacked his family just for him saying he disagrees with the stock

Mobleysoft 6y ago

I'm up 180% over the year. Peanuts compared to the WSB people, but I got there with my own intuition. I'm looking into food and entertainment for my next picks. I think the populace will need them over the next year before a general return to the before times mid 2022. We'll see.

neuronic 6y ago
> general return to the before times mid 2022 But will this happen? Massive inflation post-Covid isn't really that far fetched. I think there will be no return to the beforeworld.
- Mobleysoft 6y ago
  Every action has an equal and opposite reaction. While the Covid deaths have been incredibly tragic, the 330 of 333 million Americans that survive, and that's assuming the virus and it's variants take 2.5 million more lives before its done with us, will be eager for a return to normalcy, if not outright partying like it's 1999. The play I tried to make last night and wasn't able to get filled today, Bloomin Brands, owner of Outback Steakhouse and other mainstream restaurants that can survive this down turn no matter how long it lasts, is up 1400% since I under bid on that strike and expiry date at 2am this morning. I'm not saying your prediction is guaranteed wrong, but I'm willing to bet against it, and 86% of my call picks are green at the moment, whatever the probability of that might be. The only one that isn't, China Unicom (CHU), essentially got delisted by executive order because the last administration didn't want Americans being able to invest in firms with ties to China's military, such as the largest provider of cell phone service for 1.4 billion people. The pandemic has been an incredible tragedy for so many human beings. I'm trying to position myself to be able to do something about it when the next one comes, which it inevitably will, as the universe trends towards entropy. But I won't be able to do it without capital, so it's worth the risk. Worst case scenario, I'm still a one man consulting shop serving the firms that keep the water running. Barring that, I guess we're hunting and gathering again, and I'm pretty good with a bow. Hopefully it doesn't come to that, and we can all look back at these present days like one of many possible filters we managed to survive on our way to colonizing the stars. That's the future I'd rather plan for, anyway. Albeit while hedging my bets.

in3d 6y ago

Of course knowledgeable players are factoring in populism. Why do think Robintrack was shut down for example?

konjin 6y ago

If this helps anyone: I bought options for Palantir because whats his face is a vampire. I will continue my vampire based trading ~~strategy~~ gambling, so all CEO better start stealing blood from teenagers if they want my money.

thrwyoilarticle 6y ago
I bet on housing because betting against housing is betting that politicians will stop catering to homeowners for the benefit of wider productivity and social mobility. I'm willing to incorporate your vampire take into my greater bastard theory.

hacker_9 6y ago

Psychology has always been part of the market, and this event can be explained by Soros' theory of reflexivity - that the stock market leads the fundementals, not the other way around. Once you forgo the efficient market hypothesis (and it's never been more obvious how incorrect this is), this event makes more sense. Same as Tesla, momentum is a psychological event lead by a positive feedback loop.

chii 6y ago
why do you need to forgo the efficient market hypothesis? The market as a whole takes into account the psychology of people as well, because peole participating in the market do so.
- justforyou 6y ago
  There's nothing efficient or concrete about psychology.
- delaaxe 6y ago
  Not a single person who believed in the efficient market hypothesis ever made a lot of money.

TrackerFF 6y ago

WSB are the old stock forums / discussion boards on steroids. Back in the day, people used to pump stocks on these smaller discussion boards. Difference is, WSB has 10^6 more members. And everyone can trade via Robinhood these days.