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When I was railing against the GameStop run up yesterday, this thread was why.
I’ve seen a bunch of these in my lifetime.
When my barber, my bartender and my 13-year old all mention a get-rich-quick opportunity, people are going to get hurt.
1/ https://twitter.com/jonsarlin/status/1355138287749500928
I’ve seen a bunch of these in my lifetime.
When my barber, my bartender and my 13-year old all mention a get-rich-quick opportunity, people are going to get hurt.
1/ https://twitter.com/jonsarlin/status/1355138287749500928
People are reducing the players here to only two archetypes: billionaires and savvy Redditors.
A few billionaires will get clobbered. But they didn’t become billionaires by exposing themselves to ruin from one equity.
The hurt isn’t going to hurt them all that much.
2/
A few billionaires will get clobbered. But they didn’t become billionaires by exposing themselves to ruin from one equity.
The hurt isn’t going to hurt them all that much.
2/
On the Reddit side, the ringleaders were all already holding GameStop stock or were leveraged into even bigger positions via stock options.
They stood to make a fortune from the masses joining in their play. And when the masses joined, they made a killing.
3/
They stood to make a fortune from the masses joining in their play. And when the masses joined, they made a killing.
3/
And that might be fine this one time. Some small investors took down a few big fish.
But that kind of feeding frenzy has a long tail.
Hearing only about wild wins brings a lot of people into the game. That’s why PowerBall succeeds - even with a near certainty of losing.
4/
But that kind of feeding frenzy has a long tail.
Hearing only about wild wins brings a lot of people into the game. That’s why PowerBall succeeds - even with a near certainty of losing.
4/
I played a lot of online poker when it first became a thing. I’d play four games at once. 60 hands an hour each. I mastered odds and strategy.
And I lost. But it was entertainment. I played with money I could afford to lose.
And around me, there were people who won big.
5/
And I lost. But it was entertainment. I played with money I could afford to lose.
And around me, there were people who won big.
5/
As it turns out, the type of games I was in were rigged. There was collusion between players.
Meanwhile, my friend’s son started playing and became a full-on gambling addict.
6/
Meanwhile, my friend’s son started playing and became a full-on gambling addict.
6/
Wherever there is money to be made, there will be sharks.
The promise of quick riches brings in people who don’t know what they’re getting themselves into - and who then can’t get out.
GameStop is a feel-good story about toppling the castle but the castle ain’t toppled.
7/
The promise of quick riches brings in people who don’t know what they’re getting themselves into - and who then can’t get out.
GameStop is a feel-good story about toppling the castle but the castle ain’t toppled.
7/
Professional investors will just avoid positions like the bad mistake the hedge funds made here.
And there will be billions in new money at the table from people like my barber and bartender.
And right now, shady operators are working on how to grab it.
8/
And there will be billions in new money at the table from people like my barber and bartender.
And right now, shady operators are working on how to grab it.
8/
Anonymous online personalities pumping stocks leading to rushes by unsophisticated investors is a great way to make the operators rich and the followers poor.
This is going to end in heartbreak and ruin for some people. It always does.
9/9
This is going to end in heartbreak and ruin for some people. It always does.
9/9
