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"Free marketeers declare markets a little too free for their tastes" I've been really enjoying watching this whole thing pan out but you had to know that the 'p
by wavefunction 6y ago
"Free marketeers declare markets a little too free for their tastes"
I've been really enjoying watching this whole thing pan out but you had to know that the 'professional capitalists' who brought us the economic crisis in 2009 would close ranks and appeal to the SEC to save them from the vicious retail investors. Robin Hood doesn't want to be banished to the proverbial wastelands because their customers are more clever than some hedge fund operators.
- ForHackernews 6y agoI'd argue Robinhood customers are not more clever, but they are more irrational/motivated by non-market goals. Getting absolutely wrecked by irrational market behaviour is a rite of passage for small traders, and it's only fair that some bigger hedge funds should learn that lesson too.
- wavefunction 6y agoSome of them were sophisticated enough to see the short squeeze opportunity and realized it was possible to exploit it. Melvin Capital kept pouring more good money after bad in a classic and literal sunk-cost fallacy. This is all completely rational behavior by WSB investors, taking advantage of the short squeeze. At a fundamental level GME just got a new activist investor/board member with a history of revitalizing retail operations and turning them around. This would be a rational reason to invest in GameStop at a basic level. This is just the status quo realizing their position can be threatened and the easy money the wealthy have rolling in can be taken by average people acting in concert.