2 ms·
I'd argue Robinhood customers are not more clever, but they are more irrational/motivated by non-market goals. Getting absolutely wrecked by irrational market
by ForHackernews 6y ago
I'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.