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Day trader army loses all the money it made in meme-stock era

308 points by lalaland1125 4y ago

chrisseaton 4y ago
GME is still up 20x isn't it? Someone who invested in that meme stock won't have lost anything. I wouldn't mind those returns.
- unholiness 4y ago
  I'm subscribed to /r/wallstreetbets for the comedy, and the peak activity was definitely when people were throwing in money at the $250-$300 level trying to will it to $420.
  - Handytinge 4y ago
    I bought at $390 I'm fairly sure. I don't regret a thing.
    - JumpCrisscross 4y ago
      > bought at $390 I'm fairly sure. I don't regret a thing. Which is the point. Gambling isn’t bad per se. People enjoy it. But the system should reallocate from those buying AMC at 390 to those who aren’t.(Full disclosure: I got talked into buying some Wish. So you’re in company, albeit a regrettable one.
- zmgsabst 4y ago
  AMC is up 3x if you bought it before the meme frenzy (Dec 20) — and 20% from where I bought it during the meme frenzy (Apr 21). S&P500 is up 25% if you bought it before the meme frenzy and 33% if you bought in April, like I did. People who spotted it early are still well ahead of S&P500 — and honestly, I wouldn’t be mad at 20% vs 33% returns… because that meme frenzy saved AMC. Of course, I sold when it was 5-6x what I paid… so that’s far and away my best performing stock of 2021.
- tomatowurst 4y ago
  I find not only losses emotionally hard but missed opportunities seem to invoke just as more distress. for instance, on thursday I bought a put for a stock that I didn't think was going to make earnings on Friday open. Before the day closed the put options were at 55%. The next day, they made earning and my same put options were trading -30% (IV crush). So in panic and afraid of theta decay, I sell to close on Friday. On Monday, today, I see the stock has hit my OTM strike price and had I held on to those put options I would be looking at 720% ROI, or a 7-bagger. It really hurts when this happens. I really do not recommend trading options.
  - robmsmt 4y ago
    the problem with options is that you need to guess the right direction as well as the timing. With stocks you just need the former
    - stocknoob 4y ago
      If you sell spreads you have time on your side. Still need direction generally correct.
- TheHypnotist 4y ago
  I guess that depends on where you got in. It's like 80% off it's high.
tester756 4y ago
We've detected unusual activity from your computer network To continue, please click the box below to let us know you're not a robot. lol. and it doesn't even work, I'm in infinite loop
- soneca 4y ago
  Tried to pass three times and couldn’t. It just reset to the initial state
- wsinks 4y ago
  Same, just validating you. I even recorded it with quicktime.
- arthurcolle 4y ago
  https://news.ycombinator.com/item?id=31319924 https://news.ycombinator.com/item?id=31319924
- jonny_eh 4y ago
  It's a bad link, the correct one: https://www.bloomberg.com/news/articles/2022-05-08/day-trader-army-loses-all-the-money-it-made-in-meme-stock-era https://www.bloomberg.com/news/articles/2022-05-08/day-trade...
- stuaxo 4y ago
  Same here, that's 5 minutes saved in my day I guess.
amelius 4y ago
Gaining money, then losing it all still leaves you in a better position than not having had the money in the first place.
lalaland1125 4y ago
Archive link: https://archive.ph/7WJws https://archive.ph/7WJws
ttyp3 4y ago
I think we've heard this story before.
VWWHFSfQ 4y ago
Meme stocks or not, for the most part don't day traders always lose money? I read Malkiel's book and that seemed to be the point anyway.
- alfalfasprout 4y ago
  Not really. Quite a few don't. It's much harder, on average, to make consistent returns trading actively than investing passively in the market as a whole though.
  - FabHK 4y ago
    So how do you identify whether it is luck or not? Quite a few people win in the casino.
    - marvin 4y ago
      I postulate that it's practically equivalent to determine whether someone succeeds through luck or skill, and actually succeeding through skill. And also that succeeding through skill is possible.
  - TameAntelope 4y ago
    The vast majority do. Day trading is gambling, period. Obviously some people luck out, but there is no way to repeat that success.
    - chewz 4y ago
      How about Tiger Global [1] the elite of the elite of hedge funds, smartest of the smartest and most sophisticated quant strategies lossing 50 pct. of capital in weeks? Or Bill Ackman [2] buying Netflix blind, without a moment of analysis and selling in panic loosing 400 mln $ over threee months. Day traders, even of small, retail kind, could have wild drawdowns but they are usualy OK in longer horizon. The times are getting interesting and we will see a lot of "smart", "long term" money managers humbled by the market. [1] https://www.ft.com/content/caa49a44-18a3-4e51-9dfb-aad61767fe25 https://www.ft.com/content/caa49a44-18a3-4e51-9dfb-aad61767f... [2] https://www.ft.com/content/47694fa4-2a4d-489d-b87b-65a3a91d178f https://www.ft.com/content/47694fa4-2a4d-489d-b87b-65a3a91d1...
givemeethekeys 4y ago
Not all. Not yet.
adders 4y ago
Wrong link, should be https://www.bloomberg.com/news/articles/2022-05-08/day-trader-army-loses-all-the-money-it-made-in-meme-stock-era https://www.bloomberg.com/news/articles/2022-05-08/day-trade... instead of https://www.bloomberg.com/tosv2.html?vid=&uuid=0ba7046d-cfde-11ec-978a-494a4b575069&url=L25ld3MvYXJ0aWNsZXMvMjAyMi0wNS0wOC9kYXktdHJhZGVyLWFybXktbG9zZXMtYWxsLXRoZS1tb25leS1pdC1tYWRlLWluLW1lbWUtc3RvY2stZXJh https://www.bloomberg.com/tosv2.html?vid=&uuid=0ba7046d-cfde...
- jonny_eh 4y ago
  Pretty revealing that a HN post can make to the front page with a broken link.
  - natly 4y ago
    Are you implying people don't read the body of the article or that there's bot interference? (I can imagine either could be true.)
    - hammock 4y ago
      The former. I for one happily upvote a submission before reading it, to keep it on the front page which is so fragilely ephemeral for new submissions, so I can read the article and then come back to (hopefully) some good comments from others in the thread.
  - planarhobbit 4y ago
    Only if you haven’t been paying attention to how upvoting rings control HN, against all the behind the scenes work to thwart them.
  - gpm 4y ago
    The original link works (for me), it just directs me through a captcha first. That's not a broken link by the usual meaning of the phrase, it doesn't mean people weren't reading the post...
    - 4y ago
Someone1234 4y ago
VTI is down 13.5% in the last three months, didn't non-meme/non-day traders also lose a lot of their gains for the previous 12-months? This seems like bait for those who were predisposed to believe this anyway.
- twblalock 4y ago
  Based on today's prices, VTI is about where it was in February 2021 and if you'd bought and held before then, you'd have made gains. But that's not really the point: the question is, who performed better? At this point, as the article shows, the meme and day traders have underperformed the boring buy-and-hold index investors.
  - deleted 4y ago
    [deleted]
  - mbesto 4y ago
    > At this point, as the article shows, the meme and day traders have underperformed the boring buy-and-hold index investors. That's because very few people actually outperform, on average, index investors. Memes or otherwise.
- timr 4y ago
  The whole market is down, but when you consider that (for example) Netflix is down >70% from November 2021, it's a different level of drop. It's sort of impressive that GME is still holding out at around $100, however...
  - paxys 4y ago
    Netflix wasn't even a "meme stock". Some companies will do worse (and some better) than others at any given point in time, that much is obvious. There's definitely a correction afoot, but twisting the narrative into "see you shouldn't follow the online hype, instead invest into wherever we tell you – Bloomberg" is pretty deceiving.
  - FormerBandmate 4y ago
Yhippa 4y ago
We have no idea who the bagholders are and who got out in time.
- commandlinefan 4y ago
  The bagholders are the ones who weren't naive enough to cash out as soon as this became national news.
  - Ekaros 4y ago
    Now big question is where the smart cash is going? Real estate? Seems to be kinda in bubble too? Or might it make sense to be on the market?
    - testfoobar 4y ago
      Check out energy YTD.
      - short_sells_poo 4y ago
        Hint, smart money is buying puts on energy...
        paulmd 4y ago
        makes sense, if you think the bottom's gonna fall out of the economy, energy usage usually goes with it.
        short_sells_poo 4y ago
        Yes this is exactly the point. In march, energy prices shot to demand destroying levels and at that point even if the prices would continue to increase near term, it was obvious that consumers (ie industry, production) will start scaling back as their profit margins are eaten by energy costs.
        4y ago
paxys 4y ago
Let's not pretend institutional investors are doing much better. Look at ARKK or any of the VC funds that are heavily invested in startups having down rounds. And putting your 401k into "safe" investments during that period wouldn't have yielded much better results.
- ushakov 4y ago
  exactly meme stocks are just a segment of a market, more riskier one of course, but still a part of the market if you were looking at DOW or S&500 for past couple months it’s nothing but losses
  - twblalock 4y ago
    > if you were looking at DOW or S&500 for past couple days it’s nothing but losses So? The article is about the past 2 years, not the past 2 days. You could pick any short time period in the past few years that would make meme investors look good compared to the total market. But if you zoom out to a two year period, it's clear the meme investors underperformed.
    - filoleg 4y ago
      > But if you zoom out to a two year period, it's clear the meme investors underperformed. TSLA is still up from 2 years ago by ~380% (May 8th 2020 - May 9th 2022). I know that exceptions tend to prove the rule, but here is at least one just off the top of my head.
      - nr2x 4y ago
        TSLA isn’t totally a meme thing though. Say what you will, but Tesla has a better future than Game Stop.
        filoleg 4y ago
        Oh, totally agreed. Sorry, i guess i misunderstood what being a meme stock meant. I assumed it was being really volatile on a semi-regular basis and being very hyped on WSB, all while being prominently hated and loved by all sides at the sime and featured heavily in the media. If we are talking pure meme stocks without much substance (but much of cultism), GME definitely takes the cake, TSLA is indeed not even close.
tapland 4y ago
This link might work: https://www.bloomberg.com/news/articles/2022-05-08/day-trader-army-loses-all-the-money-it-made-in-meme-stock-era https://www.bloomberg.com/news/articles/2022-05-08/day-trade...
twblalock 4y ago
The last few years was a perfect storm of stupidity: - The Fed juicing the market (and not stopping when it should have, dismissing inflation concerns as transitory, etc.) - Covid stimulus going to people who didn't need it - People spending that stimulus money to invest (often for the first time) on zero-fee platforms like Robin Hood - Meme stock investors intentionally manipulating stock prices to cause them to diverge from the underlying value of the company Despite all of that, people who bought and held a total market or S&P 500 index fund in 2020 have still made gains.
- rob_c 4y ago
  > - Covid stimulus going to people who didn't need it Bit of a spicy opinion... (but perfectly accurate)
- deleted 4y ago
  [deleted]
- dannyw 4y ago
  Most importantly, the Fed Put that has been supporting markets since 2008 is unravelling.
- arinlen 4y ago
  > - Covid stimulus going to people who didn't need it Could you please elaborate? I think the way the US did it's COVID stimulus was outstanding and very close to the ideal way to actually address people's potential needs. > - People spending that stimulus money to invest (often for the first time) on zero-fee platforms like Robin Hood What's exactly the problem? Aren't people free to spend their own money any way they feel like it? Or are we now held accountable by a righteous capitalism police to determine if an expense we make is kosher? > - Meme stock investors intentionally manipulating stock prices to cause them to diverge from the underlying value of the company What's exactly the problem? I mean, who are you to tell what's the "underlying value" of something, specially in a free market economy? It seems to me that worst case scenario the people spending their money on stocks are only gambling their own money, and best case scenario they profit from their own investment.
tiahura 4y ago
Have they? GME is still 200% higher then when the “short squeeze” began.
- harambae 4y ago
  GME is in a league of its own, now having a cult-like following around the prospect of a "Mother of all short squeezes" (MOASS) at some indeterminate point in the future. (I'm avoiding using excessively loaded terminology like "QAnon of finance" but I really can't think of a fairer way to describe it than a cult at this point.)
  - ummonk 4y ago
    It's not necessarily irrational, if you treat GME shares as collectables rather than investments in a profit-making business.
    - alephxyz 4y ago
      > if you treat GME shares as collectables Why would a rational agent do that?
      - seanp2k2 4y ago
        Apes can remain irrational longer than hedgies can remain solvent.
- unholiness 4y ago
  Picking a successful stock at past point you didn't buy in at is a hell of a sampling bias. The peak of /r/wallstreetbets activity was people throwing in money at the $250-$300 level trying to will it to $420, and it's now below $100. If you were smart and bought before the peak hype... how many other equally promising-looking stocks did you also buy into, before a hype that never arrived? This article definitely isn't bias-free either but at least it's not picking stocks based on performance.
brian_herman 4y ago
It doesn't matter how much money we lose there will always be more people to fill in our ranks.
- deleted 4y ago
  [deleted]
blahblarblar 4y ago
In a bull market it’s too hard to tell if you are a genius or taking a random walk on a rising tide. Most think they are the former.
- knodi123 4y ago
  Ask any lottery winner what the secret was to their success. I bet most of them have theories!
  - chrsig 4y ago
    Well, since you said any lottery winner... https://news.ycombinator.com/item?id=9678607 https://news.ycombinator.com/item?id=9678607
- drawkbox 4y ago
  The geniuses are the ones that regularly take gains when stocks are green for so long, and regularly buy on deep "blood in the streets" reds. If you can successfully flip the colors, long green is sell, red is a sale, then you can beat the market in the only way small investors can. It is very difficult to do, because of that FOMO. Some of the better stocks like Apple, Google, Amazon will be splitting in summer, that is a nice regular bump. Prices on some of these will never be this low again. Good time to start dipping buys into index funds (VOO, VTI, VOOG, VOE) etc if you can.
  - tarsinge 4y ago
    What is « long » green? How long red must be? There are no real signals here, you’re trying to rationalize gambling. Also even if you could perfectly time dips it’s not a good strategy https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-cost-averaging/ https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co...
    - drawkbox 4y ago
      Long green > 1 year so it is long is when stocks have been green for a while or above where your exit / price point was set. I guess people here really dislike the idea of selling and profit taking gains regularly. [1] In no way am I saying don't buy regularly, just also sell regularly so you can get into buying opportunities. Dollar cost averaging works best if you aren't selling off every downturn and every so often banking some profits. If the only time you are selling is in downturns then that is a problem, selling should be as regular as buying. A bit surprised this is so controversial. Taking gains regularly, even if you leave some gains on the table is better than only selling in downturns which is what happens in massive pullbacks. The massive pullback reds are when you should have some on the sideline to invest. The base is sell high buy low, easier said than always done but if you have a regular sell strategy then you can bank some of those higher points just like DCA gets you into some of the lower points. This doesn't mean you shouldn't dollar cost average or buy the dip, it means you have some cash to invest when there are pullbacks to get in lower. This allows you to continue doing other price target strategies and dollar cost averaging etc. You want some money in cash to be able to get into buying opportunities, like right now there is massive sale due to selling. Basically have a regular buy strategy and a regular sell strategy. [1] https://www.investopedia.com/terms/p/profittaking.asp https://www.investopedia.com/terms/p/profittaking.asp
ushakov 4y ago
do you buy, sell or hold? personally, i’m a little spooked
- LaserDiscMan 4y ago
  In terms of indexes, I find this chart quite comforting myself: https://www.ftportfolios.com/Common/ContentFileLoader.aspx?ContentGUID=4ecfa978-d0bb-4924-92c8-628ff9bfe12d https://www.ftportfolios.com/Common/ContentFileLoader.aspx?C...
  - georgeecollins 4y ago
    I find this less comforting. https://www.multpl.com/shiller-pe https://www.multpl.com/shiller-pe
    - tomjakubowski 4y ago
      Well, hey, at least it looks like it's going down now.
- A4ET8a8uTh0 4y ago
  I... am not sure, but having seen similar movies before, I think given that we have an election year, any real pain that needs to happen will not happen prior to elections despite Powell's posturing. It is mildly annoying that this heuristic works so well..
- Jamie9912 4y ago
  I'm HOLDing! I never intended to make a quick-buck, all my investments since 2020 have been long-term (10+ years) in my mind.
- marvin 4y ago
  I'm not touching my portfolio. I might rebalance it at some point. 50% global index funds, 16% emerging markets/global small cap/nordics. The whole point of passive investing is you make a philosophical decision not to get spooked when people get spooked. On the side of this, I also have a couple of single-company bets I made many years ago and won't adjust further. I expect to be underwater for a couple of years, anything better than that would be a pleasant surprise. A good time to increase the contributions.
jokoon 4y ago
Why is there meme only in the title?
candyman 4y ago
I hope it’s finally over. For a while the market was driven by factors that I can’t analyze or understand using my traditional financial frameworks. It’s now back to a point where my tools work again. It’s like all my instruments just read “Tilt” for the last three years. Now I get readings!
- Donald 4y ago
  What indicators are you enjoying right now?
candyman 4y ago
It’s like the last three years all my instruments said “tilt” and none of my traditional financial analysis tools were worth a damn. Now I am getting readings and things are working again. Hope it stays this way. I expect we may overshoot on the downside but that’s typical.
sgarrity 4y ago
So many animations, huge blocking ads, and scrolling videos. The reading experience on the Bloomberg.com site was so poor that I lost my retirement savings.
lvl102 4y ago
Market is dramatically down but big tech earnings still very strong. I don’t think this is the end of the story.
mastazi 4y ago
EDIT I was wrong, it was because of this https://news.ycombinator.com/item?id=31320075 https://news.ycombinator.com/item?id=31320075 I get this in an infinite loop: > We've detected unusual activity from your computer network > To continue, please click the box below to let us know you're not a robot. i'm assuming it could either be because they are blocking browsers with anti-fingerprinting or because they are blocking all international connections (I'm in Australia), if it's the latter, I wonder how long it will take before they realise they are losing readers LOL. (If it's the former, good riddance)
throwaway67743 4y ago
Nope, excluding android users from their site entirely now. Supply archive.is instead of linking to ridiculous URL
MrStonedOne 4y ago
m3kw9 4y ago
Holding onto losing stocks gets worse after every 5% drop, you will think every time:bounce. By the 3-4th drop you’d be down like 40%. By this time you’d think it’s down 40% it will bounce which it does 10% but then the 5% drops are back and the cycle continues till what’s called capitulation.
coldcode 4y ago
I can't the article it puts up some BS unusual activity warning.
misc213 4y ago
I mean it's unfair to single them out IMO. Most people are losing money in the market right now.
- dlp211 4y ago
  Only if you are looking at it on a very short timespan. Those of us that have been VTSAX and chill for the past decade+ are still up plenty. Markets go up, markets go down too. That is why retail investors should buy broad based, low fee, index funds and not try to beat the market. There were certainly some serious winners over the past few years, but only if you got out and my guess is that most of those folks in meme stocks can't give up the ghost and over estimate their abilities.
  - alephnan 4y ago
    > There were certainly some serious winners over the past few years, but only if you got out and my guess is that most of those folks in meme stocks can't give up the ghost and over estimate their abilities. You might be reading WallStreetBets too seriously and underestimating the financial literacy of people on there. At the very least, most of the people still there know what IV Crush is.
  - thrwyoilarticle 4y ago
    Will you forgive me for not being impressed that you made more money in 10 years than the subjects of the article did in 1?
    - blockwriter 4y ago
      I think the idea is that the behavior of the subjects of the article will almost never lead to ten years of accumulating wealth. It will more than likely lead to losses after a term of one to three years.
      - thrwyoilarticle 4y ago
        But the behaviour of investing in VTSAX would also have left them with losses after one year. It was higher this time last year.
_Algernon_ 4y ago
Anyone else stuck in an infinite "We've detected unusual activity from your computer network" loop on this site?
- 2OEH8eoCRo0 4y ago
  Yes
Barrera 4y ago
AFAICT the article presents no evidence that it's the Day Trader Army taking the hit right now. It could be the Army sold to more serious and/or institutional investors near the top who were chasing returns of their own. What's been happening for some time is a desperate search for investment returns of any kind. When treasury yields dried up in 2020-1, money piled into stocks, fueled by government transfers such as the PPP giveaway and stimmie checks. Those programs are long gone, as is a lot (most?) of the money. At some point, long term yields will stop rising, and the juicy capital gains to be had as the inevitable return to earth commences will beckon to those who have been burned by stocks to try treasuries, fueling sector rotation and more stock declines. Along the way the occasional explosive stock rally will captivate everyone's attention - for a while. By the time the dust settles, nobody will care about stocks and you'll get blank stares when you say that's what you just invested in.
- ShivShankaran 4y ago
  Also most of the posts on wallstreetbets have a (non)survivorship bias. I know plenty of retail traders who have 200%+ returns in last 6 months but dont post about it.
  - simulate-me 4y ago
    What did they invest in?
  - lexapro 4y ago
    200% of their portfolio or a small amount they gamble with?
- christophilus 4y ago
  I’m not in the day trader army, but I do swing trade, and have done alright on the way down— shorting / buying puts. As far as I can see, there’s no reason to think someone who did well last year trading meme stocks hasn’t made money this year shorting them. At this point, we’re oversold, and I’m mostly in cash waiting for setups to show up again.
pluc 4y ago
[flagged]
- S4M 4y ago
  You are lucky, I kept having the same message asking me to prove that I wasn't a robot and couldn't access to the article at all (same reason as you, they "detected unusual activity from your computer network").
neonate 4y ago
https://archive.ph/7WJws https://archive.ph/7WJws
ramesh31 4y ago
It was fun at first! Then it got cringeworthy. Then it got sad.
kurupt213 4y ago
Not if they’re day-trading SQQQ
anm89 4y ago
If anything GME is outperforming and a vast majority of the market is getting absolutely stomped. It feels like this is just telling a certain group of people what they want to hear to help them feel better about their portfolios getting demolished
cosmiccatnap 4y ago
Kind of hard to take Bloomberg's word for it considering they are the definitive old guard
nromiun 4y ago
What? Day traders are the only ones making any money right now. Everyone else is losing money, literally every major index in the world is in freefall. Why do people think day traders can't short?
mym1990 4y ago
This is like having that fish at a poker table that goes on a big run(or gambler in a casino), but you're never worried about it, because the fish always gives it back.
- djmips 4y ago
  What if the fish didn't. What if they just stood up with a huge amount of winnings and just walked out?
  - mym1990 4y ago
    Sometimes they do, but they come back the next day or the next day. Greed and addiction are very powerful forces, and even people who recognize the faults in their actions or identify the time where enough is enough have a hard time leaving the game for good.
gigatexal 4y ago
Insert simpsons haha.gif here
barrenko 4y ago
Not sure what's funny here, the banks and the accredited, "respectful" folk lose our money all the time.
bigbacaloa 4y ago
Don't believe the hype. - Flava Flav
bigbacaloa 4y ago
Don't believe the hype. - flava flav
tomcam 4y ago
Not sure if reversion to the mean is a surprise
- deleted 4y ago
  [deleted]
nabla9 4y ago
"It's only when the tide goes out that you can see who's swimming naked." – Warren Buffett
jamisteven 4y ago
Hilarious how the MSM are blaming day traders when in fact what is really happening is an unparalleled liquidation of overleveraged funds like Melvin capital and co. Every single thing that the folks on r/superstonk, and r/wallstreetbets have mapped out months if not a year ago are now coming to fruition, even the blaming of retail for the collapse of an overbought and artificially stimulated market.
- jcranberry 4y ago
  There's no "blame" for day traders...its just showing retail traders who started trading around 2020 on average have lost their gains by now.
twirlock 4y ago
horns4lyfe 4y ago
Maybe, but I made a decent amount of money (for me at least) and stopped because I had clearly just gotten lucky. I still have that money

308 points by lalaland1125 4y ago

GME is still up 20x isn't it? Someone who invested in that meme stock won't have lost anything. I wouldn't mind those returns.

unholiness 4y ago
I'm subscribed to /r/wallstreetbets for the comedy, and the peak activity was definitely when people were throwing in money at the $250-$300 level trying to will it to $420.
- Handytinge 4y ago
  I bought at $390 I'm fairly sure. I don't regret a thing.
  - JumpCrisscross 4y ago
    > bought at $390 I'm fairly sure. I don't regret a thing. Which is the point. Gambling isn’t bad per se. People enjoy it. But the system should reallocate from those buying AMC at 390 to those who aren’t.(Full disclosure: I got talked into buying some Wish. So you’re in company, albeit a regrettable one.
zmgsabst 4y ago
AMC is up 3x if you bought it before the meme frenzy (Dec 20) — and 20% from where I bought it during the meme frenzy (Apr 21). S&P500 is up 25% if you bought it before the meme frenzy and 33% if you bought in April, like I did. People who spotted it early are still well ahead of S&P500 — and honestly, I wouldn’t be mad at 20% vs 33% returns… because that meme frenzy saved AMC. Of course, I sold when it was 5-6x what I paid… so that’s far and away my best performing stock of 2021.
tomatowurst 4y ago
I find not only losses emotionally hard but missed opportunities seem to invoke just as more distress. for instance, on thursday I bought a put for a stock that I didn't think was going to make earnings on Friday open. Before the day closed the put options were at 55%. The next day, they made earning and my same put options were trading -30% (IV crush). So in panic and afraid of theta decay, I sell to close on Friday. On Monday, today, I see the stock has hit my OTM strike price and had I held on to those put options I would be looking at 720% ROI, or a 7-bagger. It really hurts when this happens. I really do not recommend trading options.
- robmsmt 4y ago
  the problem with options is that you need to guess the right direction as well as the timing. With stocks you just need the former
  - stocknoob 4y ago
    If you sell spreads you have time on your side. Still need direction generally correct.
TheHypnotist 4y ago
I guess that depends on where you got in. It's like 80% off it's high.

tester756 4y ago

We've detected unusual activity from your computer network To continue, please click the box below to let us know you're not a robot. lol. and it doesn't even work, I'm in infinite loop

soneca 4y ago
Tried to pass three times and couldn’t. It just reset to the initial state
wsinks 4y ago
Same, just validating you. I even recorded it with quicktime.
arthurcolle 4y ago
https://news.ycombinator.com/item?id=31319924 https://news.ycombinator.com/item?id=31319924
jonny_eh 4y ago
It's a bad link, the correct one: https://www.bloomberg.com/news/articles/2022-05-08/day-trader-army-loses-all-the-money-it-made-in-meme-stock-era https://www.bloomberg.com/news/articles/2022-05-08/day-trade...
stuaxo 4y ago
Same here, that's 5 minutes saved in my day I guess.

amelius 4y ago

Gaining money, then losing it all still leaves you in a better position than not having had the money in the first place.

lalaland1125 4y ago

Archive link: https://archive.ph/7WJws https://archive.ph/7WJws

ttyp3 4y ago

I think we've heard this story before.

VWWHFSfQ 4y ago

Meme stocks or not, for the most part don't day traders always lose money? I read Malkiel's book and that seemed to be the point anyway.

alfalfasprout 4y ago
Not really. Quite a few don't. It's much harder, on average, to make consistent returns trading actively than investing passively in the market as a whole though.
- FabHK 4y ago
  So how do you identify whether it is luck or not? Quite a few people win in the casino.
  - marvin 4y ago
    I postulate that it's practically equivalent to determine whether someone succeeds through luck or skill, and actually succeeding through skill. And also that succeeding through skill is possible.
- TameAntelope 4y ago
  The vast majority do. Day trading is gambling, period. Obviously some people luck out, but there is no way to repeat that success.
  - chewz 4y ago
    How about Tiger Global [1] the elite of the elite of hedge funds, smartest of the smartest and most sophisticated quant strategies lossing 50 pct. of capital in weeks? Or Bill Ackman [2] buying Netflix blind, without a moment of analysis and selling in panic loosing 400 mln $ over threee months. Day traders, even of small, retail kind, could have wild drawdowns but they are usualy OK in longer horizon. The times are getting interesting and we will see a lot of "smart", "long term" money managers humbled by the market. [1] https://www.ft.com/content/caa49a44-18a3-4e51-9dfb-aad61767fe25 https://www.ft.com/content/caa49a44-18a3-4e51-9dfb-aad61767f... [2] https://www.ft.com/content/47694fa4-2a4d-489d-b87b-65a3a91d178f https://www.ft.com/content/47694fa4-2a4d-489d-b87b-65a3a91d1...

givemeethekeys 4y ago

Not all. Not yet.

adders 4y ago

Wrong link, should be https://www.bloomberg.com/news/articles/2022-05-08/day-trader-army-loses-all-the-money-it-made-in-meme-stock-era https://www.bloomberg.com/news/articles/2022-05-08/day-trade... instead of https://www.bloomberg.com/tosv2.html?vid=&uuid=0ba7046d-cfde-11ec-978a-494a4b575069&url=L25ld3MvYXJ0aWNsZXMvMjAyMi0wNS0wOC9kYXktdHJhZGVyLWFybXktbG9zZXMtYWxsLXRoZS1tb25leS1pdC1tYWRlLWluLW1lbWUtc3RvY2stZXJh https://www.bloomberg.com/tosv2.html?vid=&uuid=0ba7046d-cfde...

jonny_eh 4y ago
Pretty revealing that a HN post can make to the front page with a broken link.
- natly 4y ago
  Are you implying people don't read the body of the article or that there's bot interference? (I can imagine either could be true.)
  - hammock 4y ago
    The former. I for one happily upvote a submission before reading it, to keep it on the front page which is so fragilely ephemeral for new submissions, so I can read the article and then come back to (hopefully) some good comments from others in the thread.
- planarhobbit 4y ago
  Only if you haven’t been paying attention to how upvoting rings control HN, against all the behind the scenes work to thwart them.
- gpm 4y ago
  The original link works (for me), it just directs me through a captcha first. That's not a broken link by the usual meaning of the phrase, it doesn't mean people weren't reading the post...
  - 4y ago

Someone1234 4y ago

VTI is down 13.5% in the last three months, didn't non-meme/non-day traders also lose a lot of their gains for the previous 12-months? This seems like bait for those who were predisposed to believe this anyway.

twblalock 4y ago
Based on today's prices, VTI is about where it was in February 2021 and if you'd bought and held before then, you'd have made gains. But that's not really the point: the question is, who performed better? At this point, as the article shows, the meme and day traders have underperformed the boring buy-and-hold index investors.
- deleted 4y ago
  [deleted]
- mbesto 4y ago
  > At this point, as the article shows, the meme and day traders have underperformed the boring buy-and-hold index investors. That's because very few people actually outperform, on average, index investors. Memes or otherwise.
timr 4y ago
The whole market is down, but when you consider that (for example) Netflix is down >70% from November 2021, it's a different level of drop. It's sort of impressive that GME is still holding out at around $100, however...
- paxys 4y ago
  Netflix wasn't even a "meme stock". Some companies will do worse (and some better) than others at any given point in time, that much is obvious. There's definitely a correction afoot, but twisting the narrative into "see you shouldn't follow the online hype, instead invest into wherever we tell you – Bloomberg" is pretty deceiving.
- FormerBandmate 4y ago

Yhippa 4y ago

We have no idea who the bagholders are and who got out in time.

commandlinefan 4y ago
The bagholders are the ones who weren't naive enough to cash out as soon as this became national news.
- Ekaros 4y ago
  Now big question is where the smart cash is going? Real estate? Seems to be kinda in bubble too? Or might it make sense to be on the market?
  - testfoobar 4y ago
    Check out energy YTD.
    - short_sells_poo 4y ago
      Hint, smart money is buying puts on energy...
      - paulmd 4y ago
        makes sense, if you think the bottom's gonna fall out of the economy, energy usage usually goes with it.
        short_sells_poo 4y ago
        Yes this is exactly the point. In march, energy prices shot to demand destroying levels and at that point even if the prices would continue to increase near term, it was obvious that consumers (ie industry, production) will start scaling back as their profit margins are eaten by energy costs.
      - 4y ago

paxys 4y ago

Let's not pretend institutional investors are doing much better. Look at ARKK or any of the VC funds that are heavily invested in startups having down rounds. And putting your 401k into "safe" investments during that period wouldn't have yielded much better results.

ushakov 4y ago
exactly meme stocks are just a segment of a market, more riskier one of course, but still a part of the market if you were looking at DOW or S&500 for past couple months it’s nothing but losses
- twblalock 4y ago
  > if you were looking at DOW or S&500 for past couple days it’s nothing but losses So? The article is about the past 2 years, not the past 2 days. You could pick any short time period in the past few years that would make meme investors look good compared to the total market. But if you zoom out to a two year period, it's clear the meme investors underperformed.
  - filoleg 4y ago
    > But if you zoom out to a two year period, it's clear the meme investors underperformed. TSLA is still up from 2 years ago by ~380% (May 8th 2020 - May 9th 2022). I know that exceptions tend to prove the rule, but here is at least one just off the top of my head.
    - nr2x 4y ago
      TSLA isn’t totally a meme thing though. Say what you will, but Tesla has a better future than Game Stop.
      - filoleg 4y ago
        Oh, totally agreed. Sorry, i guess i misunderstood what being a meme stock meant. I assumed it was being really volatile on a semi-regular basis and being very hyped on WSB, all while being prominently hated and loved by all sides at the sime and featured heavily in the media. If we are talking pure meme stocks without much substance (but much of cultism), GME definitely takes the cake, TSLA is indeed not even close.

tapland 4y ago

This link might work: https://www.bloomberg.com/news/articles/2022-05-08/day-trader-army-loses-all-the-money-it-made-in-meme-stock-era https://www.bloomberg.com/news/articles/2022-05-08/day-trade...

twblalock 4y ago

The last few years was a perfect storm of stupidity: - The Fed juicing the market (and not stopping when it should have, dismissing inflation concerns as transitory, etc.) - Covid stimulus going to people who didn't need it - People spending that stimulus money to invest (often for the first time) on zero-fee platforms like Robin Hood - Meme stock investors intentionally manipulating stock prices to cause them to diverge from the underlying value of the company Despite all of that, people who bought and held a total market or S&P 500 index fund in 2020 have still made gains.

rob_c 4y ago
> - Covid stimulus going to people who didn't need it Bit of a spicy opinion... (but perfectly accurate)
deleted 4y ago
[deleted]
dannyw 4y ago
Most importantly, the Fed Put that has been supporting markets since 2008 is unravelling.
arinlen 4y ago
> - Covid stimulus going to people who didn't need it Could you please elaborate? I think the way the US did it's COVID stimulus was outstanding and very close to the ideal way to actually address people's potential needs. > - People spending that stimulus money to invest (often for the first time) on zero-fee platforms like Robin Hood What's exactly the problem? Aren't people free to spend their own money any way they feel like it? Or are we now held accountable by a righteous capitalism police to determine if an expense we make is kosher? > - Meme stock investors intentionally manipulating stock prices to cause them to diverge from the underlying value of the company What's exactly the problem? I mean, who are you to tell what's the "underlying value" of something, specially in a free market economy? It seems to me that worst case scenario the people spending their money on stocks are only gambling their own money, and best case scenario they profit from their own investment.

tiahura 4y ago

Have they? GME is still 200% higher then when the “short squeeze” began.

harambae 4y ago
GME is in a league of its own, now having a cult-like following around the prospect of a "Mother of all short squeezes" (MOASS) at some indeterminate point in the future. (I'm avoiding using excessively loaded terminology like "QAnon of finance" but I really can't think of a fairer way to describe it than a cult at this point.)
- ummonk 4y ago
  It's not necessarily irrational, if you treat GME shares as collectables rather than investments in a profit-making business.
  - alephxyz 4y ago
    > if you treat GME shares as collectables Why would a rational agent do that?
    - seanp2k2 4y ago
      Apes can remain irrational longer than hedgies can remain solvent.
unholiness 4y ago
Picking a successful stock at past point you didn't buy in at is a hell of a sampling bias. The peak of /r/wallstreetbets activity was people throwing in money at the $250-$300 level trying to will it to $420, and it's now below $100. If you were smart and bought before the peak hype... how many other equally promising-looking stocks did you also buy into, before a hype that never arrived? This article definitely isn't bias-free either but at least it's not picking stocks based on performance.

brian_herman 4y ago

It doesn't matter how much money we lose there will always be more people to fill in our ranks.

deleted 4y ago
[deleted]

blahblarblar 4y ago

In a bull market it’s too hard to tell if you are a genius or taking a random walk on a rising tide. Most think they are the former.

knodi123 4y ago
Ask any lottery winner what the secret was to their success. I bet most of them have theories!
- chrsig 4y ago
  Well, since you said any lottery winner... https://news.ycombinator.com/item?id=9678607 https://news.ycombinator.com/item?id=9678607
drawkbox 4y ago
The geniuses are the ones that regularly take gains when stocks are green for so long, and regularly buy on deep "blood in the streets" reds. If you can successfully flip the colors, long green is sell, red is a sale, then you can beat the market in the only way small investors can. It is very difficult to do, because of that FOMO. Some of the better stocks like Apple, Google, Amazon will be splitting in summer, that is a nice regular bump. Prices on some of these will never be this low again. Good time to start dipping buys into index funds (VOO, VTI, VOOG, VOE) etc if you can.
- tarsinge 4y ago
  What is « long » green? How long red must be? There are no real signals here, you’re trying to rationalize gambling. Also even if you could perfectly time dips it’s not a good strategy https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-cost-averaging/ https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co...
  - drawkbox 4y ago
    Long green > 1 year so it is long is when stocks have been green for a while or above where your exit / price point was set. I guess people here really dislike the idea of selling and profit taking gains regularly. [1] In no way am I saying don't buy regularly, just also sell regularly so you can get into buying opportunities. Dollar cost averaging works best if you aren't selling off every downturn and every so often banking some profits. If the only time you are selling is in downturns then that is a problem, selling should be as regular as buying. A bit surprised this is so controversial. Taking gains regularly, even if you leave some gains on the table is better than only selling in downturns which is what happens in massive pullbacks. The massive pullback reds are when you should have some on the sideline to invest. The base is sell high buy low, easier said than always done but if you have a regular sell strategy then you can bank some of those higher points just like DCA gets you into some of the lower points. This doesn't mean you shouldn't dollar cost average or buy the dip, it means you have some cash to invest when there are pullbacks to get in lower. This allows you to continue doing other price target strategies and dollar cost averaging etc. You want some money in cash to be able to get into buying opportunities, like right now there is massive sale due to selling. Basically have a regular buy strategy and a regular sell strategy. [1] https://www.investopedia.com/terms/p/profittaking.asp https://www.investopedia.com/terms/p/profittaking.asp

ushakov 4y ago

do you buy, sell or hold? personally, i’m a little spooked

LaserDiscMan 4y ago
In terms of indexes, I find this chart quite comforting myself: https://www.ftportfolios.com/Common/ContentFileLoader.aspx?ContentGUID=4ecfa978-d0bb-4924-92c8-628ff9bfe12d https://www.ftportfolios.com/Common/ContentFileLoader.aspx?C...
- georgeecollins 4y ago
  I find this less comforting. https://www.multpl.com/shiller-pe https://www.multpl.com/shiller-pe
  - tomjakubowski 4y ago
    Well, hey, at least it looks like it's going down now.
A4ET8a8uTh0 4y ago
I... am not sure, but having seen similar movies before, I think given that we have an election year, any real pain that needs to happen will not happen prior to elections despite Powell's posturing. It is mildly annoying that this heuristic works so well..
Jamie9912 4y ago
I'm HOLDing! I never intended to make a quick-buck, all my investments since 2020 have been long-term (10+ years) in my mind.
marvin 4y ago
I'm not touching my portfolio. I might rebalance it at some point. 50% global index funds, 16% emerging markets/global small cap/nordics. The whole point of passive investing is you make a philosophical decision not to get spooked when people get spooked. On the side of this, I also have a couple of single-company bets I made many years ago and won't adjust further. I expect to be underwater for a couple of years, anything better than that would be a pleasant surprise. A good time to increase the contributions.

jokoon 4y ago

Why is there meme only in the title?

candyman 4y ago

I hope it’s finally over. For a while the market was driven by factors that I can’t analyze or understand using my traditional financial frameworks. It’s now back to a point where my tools work again. It’s like all my instruments just read “Tilt” for the last three years. Now I get readings!

Donald 4y ago
What indicators are you enjoying right now?

candyman 4y ago

It’s like the last three years all my instruments said “tilt” and none of my traditional financial analysis tools were worth a damn. Now I am getting readings and things are working again. Hope it stays this way. I expect we may overshoot on the downside but that’s typical.

sgarrity 4y ago

So many animations, huge blocking ads, and scrolling videos. The reading experience on the Bloomberg.com site was so poor that I lost my retirement savings.

lvl102 4y ago

Market is dramatically down but big tech earnings still very strong. I don’t think this is the end of the story.

mastazi 4y ago

EDIT I was wrong, it was because of this https://news.ycombinator.com/item?id=31320075 https://news.ycombinator.com/item?id=31320075 I get this in an infinite loop: > We've detected unusual activity from your computer network > To continue, please click the box below to let us know you're not a robot. i'm assuming it could either be because they are blocking browsers with anti-fingerprinting or because they are blocking all international connections (I'm in Australia), if it's the latter, I wonder how long it will take before they realise they are losing readers LOL. (If it's the former, good riddance)

throwaway67743 4y ago

Nope, excluding android users from their site entirely now. Supply archive.is instead of linking to ridiculous URL

MrStonedOne 4y ago

m3kw9 4y ago

Holding onto losing stocks gets worse after every 5% drop, you will think every time:bounce. By the 3-4th drop you’d be down like 40%. By this time you’d think it’s down 40% it will bounce which it does 10% but then the 5% drops are back and the cycle continues till what’s called capitulation.

coldcode 4y ago

I can't the article it puts up some BS unusual activity warning.

misc213 4y ago

I mean it's unfair to single them out IMO. Most people are losing money in the market right now.

dlp211 4y ago
Only if you are looking at it on a very short timespan. Those of us that have been VTSAX and chill for the past decade+ are still up plenty. Markets go up, markets go down too. That is why retail investors should buy broad based, low fee, index funds and not try to beat the market. There were certainly some serious winners over the past few years, but only if you got out and my guess is that most of those folks in meme stocks can't give up the ghost and over estimate their abilities.
- alephnan 4y ago
  > There were certainly some serious winners over the past few years, but only if you got out and my guess is that most of those folks in meme stocks can't give up the ghost and over estimate their abilities. You might be reading WallStreetBets too seriously and underestimating the financial literacy of people on there. At the very least, most of the people still there know what IV Crush is.
- thrwyoilarticle 4y ago
  Will you forgive me for not being impressed that you made more money in 10 years than the subjects of the article did in 1?
  - blockwriter 4y ago
    I think the idea is that the behavior of the subjects of the article will almost never lead to ten years of accumulating wealth. It will more than likely lead to losses after a term of one to three years.
    - thrwyoilarticle 4y ago
      But the behaviour of investing in VTSAX would also have left them with losses after one year. It was higher this time last year.

_Algernon_ 4y ago

Anyone else stuck in an infinite "We've detected unusual activity from your computer network" loop on this site?

2OEH8eoCRo0 4y ago
Yes

Barrera 4y ago

AFAICT the article presents no evidence that it's the Day Trader Army taking the hit right now. It could be the Army sold to more serious and/or institutional investors near the top who were chasing returns of their own. What's been happening for some time is a desperate search for investment returns of any kind. When treasury yields dried up in 2020-1, money piled into stocks, fueled by government transfers such as the PPP giveaway and stimmie checks. Those programs are long gone, as is a lot (most?) of the money. At some point, long term yields will stop rising, and the juicy capital gains to be had as the inevitable return to earth commences will beckon to those who have been burned by stocks to try treasuries, fueling sector rotation and more stock declines. Along the way the occasional explosive stock rally will captivate everyone's attention - for a while. By the time the dust settles, nobody will care about stocks and you'll get blank stares when you say that's what you just invested in.

ShivShankaran 4y ago
Also most of the posts on wallstreetbets have a (non)survivorship bias. I know plenty of retail traders who have 200%+ returns in last 6 months but dont post about it.
- simulate-me 4y ago
  What did they invest in?
- lexapro 4y ago
  200% of their portfolio or a small amount they gamble with?
christophilus 4y ago
I’m not in the day trader army, but I do swing trade, and have done alright on the way down— shorting / buying puts. As far as I can see, there’s no reason to think someone who did well last year trading meme stocks hasn’t made money this year shorting them. At this point, we’re oversold, and I’m mostly in cash waiting for setups to show up again.

pluc 4y ago

[flagged]

S4M 4y ago
You are lucky, I kept having the same message asking me to prove that I wasn't a robot and couldn't access to the article at all (same reason as you, they "detected unusual activity from your computer network").

neonate 4y ago

https://archive.ph/7WJws https://archive.ph/7WJws

ramesh31 4y ago

It was fun at first! Then it got cringeworthy. Then it got sad.

kurupt213 4y ago

Not if they’re day-trading SQQQ

anm89 4y ago

If anything GME is outperforming and a vast majority of the market is getting absolutely stomped. It feels like this is just telling a certain group of people what they want to hear to help them feel better about their portfolios getting demolished

cosmiccatnap 4y ago

Kind of hard to take Bloomberg's word for it considering they are the definitive old guard

nromiun 4y ago

What? Day traders are the only ones making any money right now. Everyone else is losing money, literally every major index in the world is in freefall. Why do people think day traders can't short?

mym1990 4y ago

This is like having that fish at a poker table that goes on a big run(or gambler in a casino), but you're never worried about it, because the fish always gives it back.

djmips 4y ago
What if the fish didn't. What if they just stood up with a huge amount of winnings and just walked out?
- mym1990 4y ago
  Sometimes they do, but they come back the next day or the next day. Greed and addiction are very powerful forces, and even people who recognize the faults in their actions or identify the time where enough is enough have a hard time leaving the game for good.

gigatexal 4y ago

Insert simpsons haha.gif here

barrenko 4y ago

Not sure what's funny here, the banks and the accredited, "respectful" folk lose our money all the time.

bigbacaloa 4y ago

Don't believe the hype. - Flava Flav

bigbacaloa 4y ago

Don't believe the hype. - flava flav

tomcam 4y ago

Not sure if reversion to the mean is a surprise

deleted 4y ago
[deleted]

nabla9 4y ago

"It's only when the tide goes out that you can see who's swimming naked." – Warren Buffett

jamisteven 4y ago

Hilarious how the MSM are blaming day traders when in fact what is really happening is an unparalleled liquidation of overleveraged funds like Melvin capital and co. Every single thing that the folks on r/superstonk, and r/wallstreetbets have mapped out months if not a year ago are now coming to fruition, even the blaming of retail for the collapse of an overbought and artificially stimulated market.

jcranberry 4y ago
There's no "blame" for day traders...its just showing retail traders who started trading around 2020 on average have lost their gains by now.

twirlock 4y ago

horns4lyfe 4y ago

Maybe, but I made a decent amount of money (for me at least) and stopped because I had clearly just gotten lucky. I still have that money