Avaricious day traders, mostly young, often angry, definitely ageist and iconoclastic have been whacking financial markets. The combo of social media, fun trading apps, Covid quarantine boredom and a pervasive moister angst have detached many stock prices from the assets behind them. Suddenly, rules don’t matter.
Yesterday was all about GameStop. That saga continues. Plus an assault on silver, AMC, Blackberry, crypto and more. Plus Macerich.
That last company is the struggling owner of a bunch of second and third-tier US shopping centres which the pandemic has seriously bruised. The stock lost more than 80% of its value in the last few years which was understandable. Retails sucks. It’s also been a heartache for the Ontario Teachers Pension Fund, which owns a significant chunk of it.
Well, all that changed when the Reddit Wallstreetbets army targeted Macerich, inflating its value by 70% in a few days through a torrent of buying. Just ‘cause. The pension plan managers looked on in bemusement and wisely pressed the big shiny Sell button. Ka-ching! The schoolies just scored $500 million in unearned cash – a direct transfer of wealth from the pockets of the naïve moisters into the retirement accounts of aging, defined-benefit-pension-rich educators. In time Macerich will fade back into retail torpor. Hoodie losses will be epic. And the gods will chuckle.
By the way, did you read the comments posted here yesterday? Yup. All you need to know about how emotion and money mix badly. Apparently everybody now hates me. Finally.
Here’s what the Hoodies, the Redditers, hedges and, sadly, the steerage section of this pathetic blog have taught us. Or should.
The Robinhood/Reddit mob are not investors, of course. They’re gamblers. It’s a game. Under the guise of ‘sticking it to the man’ these folks are actually trying to make fast money without working for it. There’s nothing noble about being a pig. Taking a rabble of four or six million traders, hopped up on Internet chat, and throwing it against one security or asset to purposefully inflate its value is dangerous and irresponsible. It’s certainly not an ethical strike against boomers, market participants, brokers, investment funds or capitalism. But it is exploiting vulnerabilities in a system designed by people who never thought folks could be this stupid. Now we know.
What can go wrong?
Lots. Tons. The implications are large. Securities regulators are all over Reddit, Robinhood and the capital markets because what’s taking place sure smells like deliberate crowdfunding manipulation. The issue is simple: values purposefully detached from reality. This undermines market integrity where pricing is constantly scrutinized and adjusted (earnings reports, fundamental analysis, forward guidance, prospectuses, p/e ratios, macroeconomics, sector analysis – you know, the adult stuff). Yes, valuations get out of whack when investors make bets on the future, but this is new ground. This is inflation merely for the sake of creating notional wealth. Greed, personified. Turned into a video game.
The crowning achievement in this moronic, self-serving, narcissistic behavior is to cloak it in moral outrage. The abuse posted here yesterday because of (a) my day job and (b) my age was interesting. A whole bunch of people clearly think they’re victims, so it’s perfectly cool to slag their elders, victimize each other and screw up capital markets where most people’s family nesteggs, education funds and retirement bucks are housed. So they can be porcine.
How do you protect yourself from this gathering crapstorm of moister vitriol?
Don’t buy individual stocks, since volatility’s being fed and market turmoil guaranteed. The diversified ETF approach is vastly superior if you have these two goals: (1) not losing money, and (2) achievng a decent rate of return. Further achieve this with balance, holding fixed-income assets that will counterbalance short-term equity mayhem. And don’t day trade. In fact, don’t trade at all. Build a portfolio with the correct weightings between assets then rebalance once or twice a year. In between, live your life, love your dog and stay the hell off Reddit.
Oh, and if you came here to diss me, to say I jumped the shark, accuse me of being part of a corrupt system, claim I don’t understand investing, or shout I’m on the wrong side of history, just think of all those happy old secure teachers. They thank you. Me, too.
This blog isn’t called Greater Fool for nothing.
224 comments ↓
I put my entire life savings (and my wife’s too) into GameStop, blackberry, and Nokia. Buckle up boys, it’s gonna be a wild ride, and I’m definitely going to be getting rich.
As predicted yesterday, GME is now 50% below yesterday’s high and dropping faster than Julie Payette’s LinkedIn connections.
Good luck to all the investors/bagholders.
So… We should not be shorting these stocks?
I don’t hate you Garth
Garth, what’s your opinion on Silver? That seems to be the next push from the wallstreetbets folks.
The day I hate you is the day that society causes you to shut down this blog! Carry on, you rockstar!
I’d take a diversified and balanced portfolio over speculating on a single stock any day.
Concentration can build wealth quickly, but only if you pick the right assets, which is very difficult.
So although speculation can be fun, it’s better to use disciplined investment strategies to create long term wealth over time. If only more young people knew this. I guess they will learn their lessons soon.
Long time reader who has never posted before.
I generally agree with Garth on most topics and understand his sound and grounded advice, but I wanted to post to voice my disappointment at how he described the reddit and crowdfunding crowd.
Please don’t tell us that they are gamblers as if they are the first or only ones. Most hedge funds don’t ‘invest’ for the long term, they trade using various advanced strategies and tactics for gains within relative short time frames. Although most ‘sophisticated’ investors, either directly or by investing via hedge funds, don’t or can’t manipulate markets, please don’t write a post with the insinuation that such manipulations doesn’t occur on a daily basis. At least write about it how it is.
Who are Toronto’s Park People? Like magic that week in March 2020 – when the New System was rolled out globally – all parks no mater their size became inhabited with tons of brand new tents.
A year later with untold billions of spending & free money at all levels of government and…the park people persist? Why?
The City takes care of them on the regular. Portapotties installed and emptied; garbage pick up. I see the BBQs and stacks of 24s by some tents.
Two theories. Some people they are placed there as a reminder to us the middle classes that we must shape up, follow the rules, else we’ll end up there.
My take is that they are there to garner more sympathy for the UBI. Look at those poor people living in the parks, can’t we DO Something?
__________
This is it. The Virtual Berlin wall. We are trapped. US Border is closed.
No one can afford the thousands in new KAMP costs + testing + scarce airline flights + another 2 weeks off work.
(If testing works then why two weeks in a government Kamp?)
A year into this and the gate is closed. Not only here but lockstep in all former First World Countries.
This is the global communism take over.
Our forum host says this all soon will end. Nope. All there is is the predictive programming.
Toronto Star yesterday, the rules planned until summer time. 28 more days! Nope I have said since mid-last year, 2022-23. We must stop the Spread of Capitalism.
https://nationalpost.com/news/politics/canadian-government-to-force-incoming-travellers-into-hotels-for-quarantine
—–That crazy leaked and DEBUNKED plan sure is fun. Here are some quotes. What now of all the airline and travel employees? We’ll need UBI for them – you don’t say. What also travels on those now grounded jets: Cargo in their bellies.
(This leaked & debunked plan also foretold supply chain shortages late 2021.)
“- Rush the acquisition of (or construction of) isolation facilities across every province and territory. Expected by December 2020”
“- Enhanced lock down restrictions (referred to as Third Lock Down) will be implemented. Full travel restrictions will be imposed (including inter-province and inter-city). Expected Q2 2021.
– Complete and total secondary lock down (much stricter than the first and second rolling phase restrictions). Expected by end of December 2020 – early January 2021”
“- Transitioning of individuals into the universal basic income program. Expected mid Q2 2021.”
I will never stay off of reddit! The subreddits I follow provide way more cute dog pics than this blog will ever satisfy! Don’t dis all of reddit for just one group of idiots on the platform please keep your disdain to the WallStreetBets community.
One of the many things that puzzles me is the lack of foresight from what is presumably very well educated youth. They didn’t arrive on scene without parents. So if their collective actions act to reduce the assets said parents may own, doesn’t that eventually end with said angry youth losing out on any inheritance, or even possibly being asked to take care of their parents financially because they are broke & no longer able to support themselves, let alone their offspring? Seems like a case of self inflicted harm to me.
There is plenty rigged and already screwed up with the capital markets Garth.
LOL. If you want to blame someone here then it is the hedge funds such as Melvin Capital and Citadel. Us Hoodies did not ask them to short Game Stop and keep shorting it despite 2021 being a new console cycle year along with huge investment from RC ventures.
Also, please check share price of GME for the last two console cycles and how big the gaming industry is going to be in the future before saying hoodies are stupid. There is a void of e-commerce giant to meet needs of gamers and GME is best positioned to meet that.
The hedge funds made a bet that GME will go bankrupt. We disagreed, saw an opportunity and capitalized on it. And now since the Hedge Funds are losing they changed the rules by not allowing us to buy. Only sell. Why don’t you have anything to say against such blatant market manipulation?
Lastly, please join wall street bets and see for yourself that Macerich is not discussed there at all. Just like all hedge funds are not bad, all reddit groups (WSB) ain’t bad either.
LAST MARCH you ranted up and down how COVID-19 was a nothing-burger. Here we are today close to a year later and millions 6ft deep in it.
Now you’d like to sweep this one under the rug also.
Too late – This will change the world of finance forever.
The horse and buggy that wall street has been riding around in for the last 100 years is about to be re-invented.
You can BANK ON IT!
Apparently everybody now hates me. – GT
—
Not everybody, we steel like you in our house.
And here is a brief summary what is happening with markets now days, from millennial point of view.
https://twitter.com/avalonpenrose/status/1354496683938201600
Love you Garth! 60/40 for life!
Excellent post today. Couldn’t agree more. Thank you.
They are an angry mob, who have found a digital equivalent to torches and pitchforks. When they find a digital equivalent to guillotines this will truly get scary.
Stupidest generation ever! And even worse, they vote.
What the reddit guys did is no different than what billionaires and hedge funds have been doing for year, manipulating the market together. Its no different than billionaire Bill Ackman going on the news and talk shows early last year telling everyone that the hotel industry is going to collapse, causing a sell off and than hours later buying two billion dollars of hotel stocks that crashed because of him, and some how thats legal. Its all manipulation, starting with the Feds money printing and inflating the markets.
#294 Stone on 01.29.21 at 1:21 pm
#277 Howard on 01.29.21 at 10:59 am
#271 BillyBob on 01.29.21 at 10:32 am
#265 Howard on 01.29.21 at 9:40 am
Who’s rewarding them? They are risking their own money and will win or lose depending on how well they control their emotions, just like all traders.
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Control their emotions???
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha!
Most (I did not say all) of these “traders” are pissing themselves with panic while the sweat pours down their back soaking their shorts as they see their meagre savings disappear.
Control their emotions. =P Thanks for the good belly laugh.
———————————–
Well, Pebbles, from your post it doesn’t seem that you’re the one to teach them emotional control :)
….everybody now hates me. Finally. -Garth. Pure gold!
I love this Blog!
Freedom First
Non carborundum illegitimo
Even though I find the Redditors amusing and may hop into the action with a share or two, personal attacks agaisnt Garth or anyone else for that matter are uncalled for.
“The issue is simple – values purposely detached from reality”-GT. Yes, exactly Garth. Their life valuses as well. We see it over and over again. Their favourite bit of fun is the pile on, cancel culture, and bully tactics. Unfortunately you stood up instead of standing by on the last post, but Jaguar and others are proud of you .
As Sail Away just mentioned….that gem of a Malcom quote….those chickens do love to come home to roost. There’s going be a lot of roosting going on in the months and years ahead.
Those who are a little older will confirm that many/most of the lessons learned in life come from making mistakes.
The current younger generation is doing what you did…making mistakes.
If you think back you will (hopefully) recall that your most costly mistakes delivered your greatest lessons.
In this generation we have an interesting influence…the internet. This generation walks around with a massive amount of information in their pockets and purses.
MASSIVE.
But information is not knowledge, as they will learn through painful, costly, experience.
Ths Wallstreetbets situation will cost the participants dearly. And SOME will (hopefully) learn a thing or two along the way. No pain no gain.
The same holds true with respect to the current Canadian housing market, currently inflated beyond any reason by FOMO, and lack of understanding of finance. They’ll (hopefully) learn when rates rise or some other market force comes to call.
Every generation goes through this…but this one has internet social connections that amplify things.
We certainly live in interesting times.
I still love what you do Garth, and by following your blog and investing advise for almost a decade now I have my registered accounts set up nicely as per your advice
I’m however, not caught up with the ramblings of the steerage section though as I have been to consumed with my favourite investing hobby, especially recently. I quite enjoy swimming with the sharks in penny land on the OTC. I was scooping up small cap and micro cap green energy plays over the past year and boy have they gone on a run lately. Anyways, 2 of the tickers I trade came up on the list for the reddit mob so I took a closer look. Most of them don’t even realize they can’t even trade OTC stocks with their apps
I did notice another trend with a drone stock that I was happy to get out of that was pushed up almost 300% in a day by another app which from what I gather allows international customers access to the OTC. Trading 212. I don’t think they can buy them all, but there are some rookies out there who are in for a long slow grind to zero. As always buyer beware. Wednesday and Thursday this week were ugly, but know what you own and ignore the noise
Thanks again Garth for your constant tenacity with keeping this blog and forum open to help educate the masses
That should be MalcomX. Me fingers not so good on tablet
This $GME short squeeze isn’t a movement like the media is making it out to be, there is no “Grand Narrative” here… this is Wall Street Bets… this is what they always do.. and they don’t post gains, they post losses (“Loss Porn”) and revel in their glory. This is an example of a “FD” (go look up what that means).
Wall Street Bets is about a YOLO play, a suicidal lottery ticket to the moon and win big then buy a yacht (and the girls that come with it). That’s why they trade options, not stocks. This isn’t a movement, this is about high risk, high reward and [email protected] and h00kers. This is r/WallStreetBets
I too am grateful for MAC as I bought it for income ( dumb move as the dividend was first to get slashed ) when it was in the 30’s and rode it all the way down while cost averaging around 17 something. Got out with a small but happy profit and reluctant on the long term prospects of REIT’s in general as income.
At this point I am totally in agreement with Garth and switched all but my play money into ETF’s and Mutual Funds with a long term outlook and 10% in cash.
Now in to betting for fun with 1K positions, because…why not…no Vegas anytime soon.
Who do you trust:
1) Roaring Kitty
2) Turner Investments
This will be a very unscientific poll of this steerage section. Register your vote now,
We laugh, we cry.
We live, we die.
Power corrupts.
Money is just a concept.
All people of the earth should have the universal right to basic needs without having to suffer for them.
Hey the big hedge fund mangers are mad their shorts are worthless and hit them big in pocket books, oh well no one told you to short(which i think unethical) stock(s), take your lumps and move on…..
I have been reading the blog for over a year now but never got around to actually investing by myself. My funds are all managed by the mutual funds folks. If I were to dabble into self-directed investing, what is the strategy for getting to the diversified, balanced portfolio that Garth writes about? I have read the mentions many times but is there a pointer to how to do it? Some major ETFs, some US, some CAD? Bonds? Percentages?….I need more education before I take a plunge. Theres a reason my funds are managed by someone else….haha
You are absolutely on point – now that we all have front row seats to view/comment/participate in Animal Spirits 1.0 in real time it is just a matter of how and when the genie returns to the bottle. The glaringly obvious distortions in ‘the market’ will probably be remedied at enormous costs through draconian regulations. I expect that any confidence in the system and status quo is vulnerable to be lost for a long time during this digital storming of the Bastille. To add to this, the SARS-CoV-2 variants have yet to become the dominant vector of transmission and, when they do, life could become exponentially more complicated. Invest your time and money wisely.
This behavior is just another manifestation of feedback loops and winner-take-all nonlinearities of our current complex economy and society. Your blog would be an example, Garth: most likely 80% of blogs are unread, only 20% of them like yours would generate any interest at all. It may even be more skewed, like 95/5 or maybe even 98/2. You have an audience beyond anything you could’ve imagined when you composed post #1. Their peurile campus commie self-justification aside, I can’t see this current phenomenon as anything other than enterprising individuals doing what enterprising individuals should do – using the tools and knowledge at their disposal try to make money by exploiting an inefficiency (the shorting behavior of various hedge funds, in this case).
Low and slow Garth as you say, that’s the best in the end. Mostly vested in ETFs.
I think the Reddit phenom will blow over when enough of the Pyramiding Scheme late entrants get burned.
Though I think the odd single stock risk is OK if you can afford it and actually have a rationale. I bought Novavax (for obvious reasons incl. fundamentals, some risk of course) at CDN $123 a few days ago (Jan 22).
TODAY Novavax report 89% efficacy overall:
Original Covid 95.6% efficacy
UK variant 85.6%
S. African variant 60% (49.4% w/HIV)
Brazil variant – no data so far
About the same efficacy on the Original Covid as Pfizer & Moderna sans Cryo Freezer or Deep Freezer transport and storage. Nothing on pricing yet.
ACTUAL clinical data for 2 variants by Novavax. Pfizer & Moderna mostly LIP SERVICE their vaccines are OK with the variants with NO clinical data provided by either of them – I have searched for it and none to be found. Novavax has at least done that.
Canada has a 52M dose contract with Novavax.
-A good day for Canada as long as Gov Canada acts.
If Novavax can start producing Mayish? from their Praha, CZ plant (bought from SII) then Trudeau may well have his “all vax’d end of Sept” wish come true. But as of today with these Pfizer deliveries to the end of March:
https://i.imgur.com/t3Gj6tp.png
Canada has a snowballs hope in Hades of “all vax’d end of Sept”
[On Pfizer data, great job Global News, better than the Gov Canada’s table online = empty]
———————–
Insult to accident and I hope it’s uniquely an EU problem, today from Arcuri, Italia’s VAX Czar about Moderna:
https://i.imgur.com/0u9JY0Q.png
Canada relying on 651.7K doses of Moderna from Jan 11 to Feb 28.
“Optimism the economy will quickly accelerate once the pace of vaccinations picks up.”
or my way and more simply:
“Covid delenda est”
“By the way, did you read the comments posted here yesterday?” – Nope
I read this blog for the valuable information. And I thank you Garth and crew for providing. But its so rare that there is anything of value in the comments….
Thanks for the post today Garth. I think the narrative of GME among the masses is running away from the facts pretty quickly.
I, personally, don’t have a problem with the masses ganging up on a stock when taken in isolation. By many accounts, there’s no one to hold accountable for manipulation and it’s quite hard to see this as any different than Jim Cramer talking up a stock on CNBC (one person with a big voice vs. many people with tiny voices). Ultimately, the Robinhood strategy was actually pretty clever and no different than smaller groups may have been inclined to do. The late August, 2020 options whale activity seems to have been a much broader effort to pump markets and may have boiled down to the actions of one large bank. Is that okay?
I see bigger problems arising from people like Musk tweeting about GME and knowing full well that he’s going to cause a given name to spike. And if he doesn’t know his power by now, he should be extremely embarrassed or have his toys taken away from him. Or the dude Chamath who has been hopping on the anti-Robinhood bandwagon while simultaneously pumping a SPAC holding of his. And there are others who now head private and public companies worth billions who don’t seem to know more about finance than I do based on what they wrote yesterday and last night. I know NOTHING about finance, so that is pathetic.
When Elon got away with a wrist-slap after tweeting a lie about selling Tesla, that was the end of the SEC’s ability to contain this kind mess.
I don’t care much whether of old teachers or others lot in all this – they can get what they get – but I am sooooo happy that these young people are using a tool they know more about then any of us saggy old facts- this is just scratching the surface of what’s to come – they don’t care if they lose $500 bucks or more – its about change, its about power, and its about destroying a corrupt, greed riddled system that is responsible for so much of the ills in this world – the future is gonna be EPIC – these kids are going to do it there way
“The pension plan managers looked on in bemusement and wisely pressed the big shiny Sell button. Ka-ching!”
That line brought a huge smile to my face. Reminded me of a joke I will paraphrase….
Old bull and young bull on a hill looking down at a field of cows….
Young bull says “LETS RUN DOWN AND BANG US ONE OF THOSE STOCKS”
Old Bull says: “NAH, LETS WALK DOWN AND GET THEM ALL”
Now that the sun kissed & tanned govt ministers are safely back home :
“TORONTO — The federal government and Canada’s major airlines announced Friday that flights to sun destinations would be suspended until May in an effort to curb the spread of COVID-19 and its variants.
Air Canada, WestJet, Sunwing, and Air Transat will be cancelling air service to all Caribbean destinations and Mexico from Jan. 31st until April 30th, Prime Minister Justin Trudeau announced in a press conference Friday.”
https://www.ctvnews.ca/health/coronavirus/ottawa-canadian-airlines-agree-to-suspend-flights-to-caribbean-and-mexico-1.5287833
#301 IHCTD9 on 01.29.21 at 2:14 pm
#296 Faron on 01.29.21 at 1:31 pm
Ah, this thing is a fair bit smaller than I envisioned. I can’t quite picture it, but the google gives me a sense. Thanks for the reply.
I know welding stainless is a different animal, but I bet you could sell the crap out of these things to the newly minted country hipsters who have fled from TO to your neck. Or maybe enamelled cast iron to match their Le Creuset cookware? Seriously, one could have a happy retirement selling these things at farmers markets for a wee mark-up. I’ll be your Victoria distributor, will get an asym haircut and make sure I tow the goods to market on a bike trailer.
Vlad confided in me that when he and Baiju set out to build a financial product that would enable everyone’s access to financial markets, they didn’t really plan on having everyone use it to access financial markets.
Bang on Mr. T. These WSB guys are dancing fools. I was looking thru some of WSB’s “loss porn” threads. There are lots of them. Many typed up as the poster is throwing in the towel licking a 6 figure loss earned over a matter of months, sometimes just weeks. Maybe 1 guy out of a thousand redditors makes bank, the rest evidently blow up like water in liquid salt.
I for one, do not dislike boomers. In fact, I have an obsession with them as I try to figure out how to be more like them. Maybe one day I’ll be able to mow my own oversized lawn in my Jhon Deer while drinking beer & listening to AC/DC.
Jokes aside: One thing that worries me, and is a rising theory among my peers, is that some people are weaponizing text generating models to add fuel to the fire in our social media. Look up GPT-3 – the tech is open sourced. I’m sure a state actor could afford enough computers & scrape enough data, while running a massive disinformation. Here’s me generating text off of GPT-2, a model trained with less data than GPT-3 to make a fake blog post comment:
“A false sense of security – I believe that we’re really just finding excuses for existing vulnerabilities which are too complex for them to be exploited, and then looking for better solutions to improve it.
The truth is, that we are just finding a way to exploit an existing vulnerability. The solution is to create all sorts of security layers and algorithms to stop most of what they use, and to use them all as a substitute.”
Almost seems more insightful than any of the previous comments I’ve made on this blog. There are some pretty smart people out there, and it isn’t difficult to manipulate large groups of humans.
So who H8s our freedoms? If you are not yet aware it’s the people running this country into the ground.
Key to Communism is breaking our spirits.
In Ontario:
1. Snowmobile trails in some areas have been closed by local health board comandants.
2. Ski Hills are closed by the government.
3. No sleeping overnight in Ice Fishing huts – by law
4. Drive Thru Christmas light shows – also closed. Too dangerous!? No, it’s trying to break people.
5. Overseas vacations are effectively banned; some provinces have curfews as errant kids would have.
Who will enforce all this? People like ourselves who are just Doing Their Jobs as they have bills, mortgage to pay. Willing participants.
– Only work is allowed Comrades, after which you return home and plug into the Globalists entertainment system and smoke government weed. Makes sense now why it was legalized. Nothing is ever given freely. This is the price.
As noted many months ago:
……….
#106 TurnerNation on 07.03.20 at 9:30 am
All fun has been removed in the New System. No more seeing your kids’ dance recital or school talent show. No birthday parties or even weddings. Can’t hug Granny in the old folks home. Travel and tourism is shut down.
Shopping in a drug store and a syrupy timed announcement comes on overhead. ‘Be aware of your surroundings. We are working hard to keep you safe.’ Yep in this WW3 even your local druggist is a War Zone.
#125 TurnerNation on 07.29.20 at 10:57 pm
See in the New System all fun is banned by edict. Specifically public dancing, singing. Traditional weddings and funerals.
People must walk a distance behind another. Regular rituals of purification – using Purell – must be performed, daily. Else the omnipresent but unseen CV gods might smite you. You unclean animal.
Faces must be covered in reverance to these gods. A hushed awe. Soft black masks seem the norm.
This is the new global religion.
No problem with traders pouring money into a stock (or the shorts) – it’s their money! The ultimate form of democracy is that you vote with your dollars – seemingly stupid or otherwise.
They impact stocks with smallish market caps – try doing this with stocks of $100 billion or more. This will not impact buy and hold investors…
#25 Faron on 01.29.21 at 3:19 pm
When Elon got away with a wrist-slap after tweeting a lie about selling Tesla, that was the end of the SEC’s ability to contain this kind mess.
——————————————————————–
They still got him for smoking weed with Joe Rogan.
Targeting a stock that has 140% of its float shorted isn’t gambling, its a sure thing with enough players on board.
That is not called ‘investing.’ It’s crowdfunding manipulation. – Garth
Freedom of assembly is a human right. Redditors will say their ‘group think’ is functioning just like an investment firm would. AOL chatrooms in the 90’s were doing the same thing et al.
Wall street risks turning off a generation of investors if they try to nuke them.
https://en.wikipedia.org/wiki/Freedom_of_assembly
Just like the guy who is not too worried about being denied entry to a restaurant that only serves turd sandwiches, there are some young fellas that are going to have a more difficult decision.
Would you prefer to get Anal Swabbed or Charles Schwabbed…
M46BC
In other words, protecting the integrity of the financial system and saving the hedge funds community, requires the Hoodies to do their civic duty and take a bit of pain now!! ;o)
Hmm, I just spent 20 minutes searching WSB for references to Macerich or $MAC. Only found a handful of posts with barely any comments/activity. Are you sure this isn’t some media FUD. I don’t think it was a frenzied WSB herd that did that one. Plenty of other stock forums out there.
There are a few analytic tools out there to crunch the most discussed stocks on WSB and put them in graph form.
Anyways, maybe your right, and I have chatted too much, I need to let others talk who are smarter than me. Thats why I come here. For more Knowledge and ideas, or just to keep me rooted to the ground.
But I’m hungry, let me find my napkin, is it Tendie time yet?
Robinhood—Steal from the rich—give to the poor! Whats wrong with that?
Garth, it’s disappointing that you called out and infantilized the Reddit crowd for making risky bets, yet totally glossed over the fact that greedy hedge fund managers made a bad bet by shorting 140% of the GME stock in existence. They bet on the downfall of an American company and its employees, and are losing. Cry me a river. Crowding funding manipulation? What about the actual market manipulation happening right in front of our eyes by the billionaire controlled media and the brokerages that won’t allow retail investors to buy GME stock, only sell? Why take their side? It’s a big club, and we ain’t in it.
Learn to read. Robinhood ran out of dough to settle trades. There was no conspiracy. If there was, you deserved it anyway, to match your own amorality. – Garth
JT will solve all that ails Canada. So sit back, relax, and let the big man handle things. This country is in his able–and quite manly–hands.
BB
SO crowdfunding manipulation bad….but a a single large hedge fund with enormous funds good
Shorts are passive. Longs are active. – Garth
This Reddit frenzy reminds me of when I was day trading during the GFC of 2009. My very first trade was Barrick Gold. I bought it at 10 AM. Thirty minutes later I sold it and made $1k. An hour later I bought it again at the dip and sold it again to make another $1.5k. My best day trading day was when I “made” $10k in unrealized gains. Man what a rush that was. I was buying individual stocks and making good money on the constant value swings. The best was when companies would report their earnings. When they reported less than expected earnings the price would drop substantially, often too much so that at 5 minutes before the close I would snap up a few thousand shares. The next morning I would sell and make a few thousand dollars profit. I never looked at metrics or stuff like that. I would just be a bottom feeder looking for undervalued stocks or stocks which reported their earnings but were being punished by investors.
That was a nice take down.
BAM!
OK One for the dogs:
have a friend whom wisley sold her house to some fool from the big smoke whom paid about a 150 grand above fair market value a common situation in Barrie Ontario These days any way she is renting and investing her win fall not going to buy back into the Real Estate “Ponzi Game” any time soon so she has about 65 grand to invest from a TFSA base account, likes etf’s and has a moderate risk profile prefers to be 60/40 so how about some learned advise for the lady: what funds should she consider? comments please and thanks
The wall st big boys are indeed in the middle of all this GME etc stuff. They are just playing the reddit fools.
https://wallstreetonparade.com/2021/01/gamestop-shares-5-count-felon-jpmorgan-could-have-made-upwards-of-174-million-yesterday/
I think it is time to sell and grab some profit or at least your initial cost. However it also might be just fine to be in it for the long haul whatever makes you comfortable. I tend to be a little careful when we have to contend with
covid etc.
#20 Faron on 01.29.21 at 3:25 pm
#301 IHCTD9 on 01.29.21 at 2:14 pm
#296 Faron on 01.29.21 at 1:31 pm
Ah, this thing is a fair bit smaller than I envisioned. I can’t quite picture it, but the google gives me a sense. Thanks for the reply.
I know welding stainless is a different animal, but I bet you could sell the crap out of these things to the newly minted country hipsters who have fled from TO to your neck
—— ———
It looks a lot like this one:
http://www.iwilltry.org/b/build-a-rocket-stove-for-home-heating/
Mine has a taller hopper (box on the front) that goes pretty much all the way to the top, and is bigger (6”x6”). This guy has a bottom dump for ash clean out, mine is on the front so I can clean out the combustion chamber as well. Mine is 18”min diameter, and 48” tall. It more or less looks like a tank with a long lox welded on the front running top to bottom, ash door on bottom front face, sliding hopper access door at the the top, which is also the air choke.
There’s no selling these things without getting all the testing and certifications required to appease insurance companies, so I’ll have to be happy with just the free heat.
#8 Ortega
Please don’t tell us that they are gamblers as if they are the first or only ones. Most hedge funds don’t ‘invest’ for the long term, they trade using various advanced strategies and tactics for gains within relative short time frames. Although most ‘sophisticated’ investors, either directly or by investing via hedge funds, don’t or can’t manipulate markets, please don’t write a post with the insinuation that such manipulations doesn’t occur on a daily basis. At least write about it how it is.
——————————–
Great comment, and is a viewpoint that I fully share. Although many novices will get burned big-time from this crowd-manipulated run-up for a company that may not be viable long-term, it is not credible to provide no critique whatsover or to overlook somehow “excusable” manipulations of markets by hedge-fund cowboys and other parasites (Martin Shkreli coming to mind here as being the poster child of this behavior). Has everyone forgotten the increase from 13.50 to 750.00 in one day for one tablet of Daraprim in 2015
ttps://www.nytimes.com/2015/09/21/business/a-huge-overnight-increase-in-a-drugs-price-raises-protests.html
Indeed Shkrell was punished, but there are certainly many more with his mindset, but with slightly less egregious behavior, that run around unchecked on Wall street, unethically manipulating all sorts of financial transactions.
Robinhood is struggling with it’s ability to post collateral to settle trades again today. reports of broad limits on trading. If this keeps up, Robinhood will die at the hands of the masses. Such irony.
The arc of the “disruptors” always seems to follow the course of history or circle of history. For them:
1) Regulated industry looks ripe for disrupting
2) Develop a tech that seems to legally work around the regs
3) Tech explodes. Cheap is real. What could go wrong?
4) “Things” start to go wrong. Crappy uber service, underpaid workers, robinhood explodes, Air BnB radically distorts RE, doordash takes down non-participating restos etc.
5) Gov’t wakes up, public outcry for regulations.
7) Disruptor gets regulated, owners make and keep all the money. Consumer saves and gains nothing.
6) GOTO 1 (yes, that’s a FORTRAN reference)
All the money in 2008 was made by suits identifying a market dislocation and exploiting it.
All the money in 2021 was made by retail identifying a market dislocation and exploiting it…until the suits intervened.
I have been lurking on r/wallstreetbets for about half a year now, not for investment advice or ideas of course, but for entertainment. Seeing clowns losing their shirts by doing crazy trades never ceases to amuse me.
Many posters there realize that they are gambling addicts. They address each others as “retards” or “autists.” They seem to be aware that what they are doing ain’t right.
And now, just because they managed to get lucky against some pros, they no longer call themselves “retards,” but revolutionaries seeking revenge for wealth inequality or the pain that Main Street felt because of Wall Street’s shenanigans during the Great Recession.
They beat the pros not by being more knowledgeable, nor having more financial resources, but by being more reckless. How long can they keep this up?
It wouldn’t be long until I stop seeing battle cries for sticking it to the rich on r/wallstreetbets, and start seeing the posts that document their own stupidity and misery again.
Love reading your blog.
However, why don’t we see the same energy from you towards these hedge funds?
Its interesting, when the largest banks in the world that are “too big to fail” gambled on the entire housing market and take everyone down with them, knowing full well it was all a house of cards, there are zero regulation changes. Not only that, they get billions in bail out from the fed reserve to continue doing what they’re doing.
On the other hand, you get a bunch of regular people basically doing the same kind of gambling and you get the CEO of Nasdaq coming out to asks for MORE regulation.
Or how about when investor Bill Ackman went on TV and said that all hotel stocks are going to zero, starting a panic sell on wall street, and ended up making billions betting against the same stock he’s disparaging on tv?
Even worse, “he then used those proceeds to wager that existing Pershing bets, including hotel operator Hilton Worldwide, would rebound.”
https://www.cnbc.com/2020/03/25/bill-ackman-exits-market-hedges-uses-2-billion-he-made-to-buy-more-stocks-including-hilton.html
How is that not market manipulation? Hedge funds get a pass because they do the “adult stuff” and still gamble like crazy?
Garth, I hope you know that there are thousands of readers who never comment and love you. Those commenting are definitely not a representative sample. I am a 26 year old “moister” who has learned a lot from this blog over the 8 years I’ve been reading it. I have a good sized healthily diversified ETF portfolio, have never held an individual stock, and I rent quite happily with my lovely fiancee. Thank you greatly for all your advice. And kindly ignore my idiotic peers. You would not believe the number of friends I’ve talked out of buying GameStop in the last couple days. Honestly. It’s like buying a fashion fad and expecting it to be worth more used.
Questioning today’s stock and Real Estate valuations is much like the opening pages of an “Agatha Christie Whodunnit”, every characters motive for murdering the market is in plain sight, Will it happen? When will it happen? What will trigger the trip wire? I am pretty sure it’s not going to happen in the way the doomsayers expect. The secret of a good murder mystery, you can never be sure until the end. The murder is coming, but not when or where you are looking for it. After the fact we all shake our heads . It was all so obvious.
In my opinion the next black swan for financial markets could well be an escape Variant of Covid-19. This is fast becoming the greatest potential threat to the economic recovery and Exorbitant Asset Prices.
The bankers treated the market as a casino in 2008 and almost completely blew up the financial system. They got bailed out. They even got bonuses. They still treat it like a casino. This makes people angry. It’s the same old story over and over again. If people young and old by their own volition want to do the same thing, let them.
You want to see an example of “crowd manipulation” turn on the news any day of the week.
People are just getting tired of it all and if this is what makes them feel empowered and some can make a little dough, all the power to them.
Of course GME will come crashing down eventually, most know that.
The worst possible motivation to invest. Revenge? Seriously? – Garth
Last one: TSLA put update
Recall the Feb expiring $400 strike TSLA put. Mentioned it a few weeks ago and “bought” it (didn’t buy it, but imagined doing so). Started at $2.55 and had dropped to $0.48 as of yesterday as theta ate into it despite TSLA slowly dropping. Today TSLA showed more weakness and it climbed back up to $2.15 before settling at $1.55. Theta will draw off even faster in coming days as the expiry is only a month away and the underlying is $393 higher. The $255 invested (options are priced per share and a contract is 100 shares) had dropped to $48, climbed briefly to $215 and then fell back to $155.
Interestingly, the price spike gives clues to how VIX works. VIX is calculated from options in the SP 500, but the formula can be applied to any name in which options are traded. As TSLA accelerated downward, the option’s price ran up quickly and way out of proportion to the drop in TSLAs value relative to the strike. TSLA didn’t close far above its low for the day, but as the momentum downward diminished, the option lost value simply because there was less “fear” that it would land in the money within the month. The option price was proportional to the rate of change of TSLA as well as the magnitude of TSLA overall. When the rate of drop was the highest, the price of the put was the highest, more or less.
That’s my interpretation. I’m not an expert and am reverse engineering this based on the little I know. I should probably read up.
I thought making naked shorts was illegal. How are the hedge funds getting away with that?
Like a hundred people by comparison, playing musical chairs…90 are taken away…then the music stops.
” Who do you trust:
1) Roaring Kitty
2) Turner Investments
This will be a very unscientific poll of this steerage section. Register your vote now”
My vote is neither. I manage my own money. I would read what either have to say, but then make my own decisions. I can’t complain, these redditer’s helped me make a nice profit on some Blackberry stock I had been holding onto.
What’s the old saying?
“The market will remain irrational long after you are insolvent”?
Still, I’ve got thousands of stock options priced well below market value… how does one get a company into the headlights of these Reddit people anyway?
Sure could use a 1000% bump right about now.
#34 NewToTheGame on 01.29.21 at 3:07 pm
#61 paulo on 01.29.21 at 3:51 pm
For people with limited or no investing experience a good start is the Canadian Couch Potato. https://canadiancouchpotato.com
The other decent option is to look at the Tangerine ETF portfolios and the underlying funds allocations.
“The pension plan managers looked on in bemusement and wisely pressed the big shiny Sell button. Ka-ching!”
Yep, it did me good since I am a long term investor, in the long run it will go to my kids anyways; so they win as well.
I have no problem with hoodies doing what they are doing; as I said yesterday, they are doing no different then those pathetic Hedge Funds managers that down talk an industry, causing share prices to fall only turn around and buy it low.. I really cannot stand them!!
Keep pumping hoodies, my retirement funds thanks you!
P.S. – We love you Garth!! :)
So much energy expended on outrage:
Really, who cares what Donald Trump does? Why get worked up about hoodies vs. shorts? Does it really matter that random fringe outlier groups that don’t affect us in any way are doing things in some remote place? Does a slight age difference fundamentally change the homo sapiens species outlook on life?
Humans just like to bicker. In extremis, we move with the same coordinated perfection as a school of herring. Individuality is mostly a myth. Except for me, of course.
“Trudeau said travellers will pay for their hotel stays while waiting for a negative COVID test.
“Travellers will then have to wait for up to three days at an approved hotel for their test results at their own expense, which is expected to be more than $2,000,” he said.”
////////////////
$2000/per person for a three day stay. Must be a nice place. Travel is now only for the rich. Charter your own private plane and your flyin!
In Australia it is $2000 for 14 days for the first adult $1000 for the second adult and $500 for the kiddies. Much more reasonable.
https://nationalpost.com/news/politics/canadian-government-to-force-incoming-travellers-into-hotels-for-quarantine
“Under the guise of ‘sticking it to the man’ these folks are actually trying to make fast money without working for it. There’s nothing noble about being a pig.”
What are your thoughts on day traders then? Is this not a mob that is a hyped-up, and extremely ignorant to risk, version of the same thing?
Tectonic shifts are happening right under our feet and the status quo will inevitably change. This is how these changes happen now; suddenly and out of left field and catches us unaware.
#34 NewToTheGame on 01.29.21 at 3:07 pm
—-
https://canadiancouchpotato.com/model-portfolios/
https://www.investopedia.com/articles/exchangetradedfunds/11/building-an-etf-portfolio.asp#steps-for-building-anetf-portfolio
and/or all-in-one
Look for *bal, *gro *=V,X,Z etc ETF’s….
https://ca.finance.yahoo.com/
https://www.morningstar.ca/ca/
#34 NewToTheGame on 01.29.21 at 3:07 pm
I have been reading the blog for over a year now but never got around to actually investing by myself. My funds are all managed by the mutual funds folks. If I were to dabble into self-directed investing, what is the strategy for getting to the diversified, balanced portfolio that Garth writes about? I have read the mentions many times but is there a pointer to how to do it? Some major ETFs, some US, some CAD? Bonds? Percentages?….I need more education before I take a plunge. Theres a reason my funds are managed by someone else….haha
***************************
The simplest thing to do while you are figuring it all out is to open either a Questrade or Wealthsimple account and switch everything into VBAL.
VBAL is a less fancy less tax-efficient version of Garth’s 60/40 recommendation but still far superior to mutual funds.
Once you are in the 6-figures for your portfolio it might be time to delve deeper and split that VBAL into it’s separate components among your RRSP /TFSA/non-reg in order to pay the least tax possible.
That, or pay someone like garth 1% to do it for you.
Come on everybody, you wish you’d bot GME last year …
If only our people had the sense to elect this guy to the position of Prime Minister instead of what _____we have.
https://www.youtube.com/watch?v=jDBMOSfAi0A
Even after the enormous rally since the March lows the TSX is still negative year over year. The Canadian banks have been flat for 4 years now using XFN as a benchmark. But in the meantime home prices have almost doubled across Ontario. The money in Canada continues to be made in real estate.
It’s not a race. And why would anyone invest only in the TSX? – Garth
#21 Howard on 01.29.21 at 2:51 pm
#294 Stone on 01.29.21 at 1:21 pm
#277 Howard on 01.29.21 at 10:59 am
#271 BillyBob on 01.29.21 at 10:32 am
#265 Howard on 01.29.21 at 9:40 am
Who’s rewarding them? They are risking their own money and will win or lose depending on how well they control their emotions, just like all traders.
———
Control their emotions???
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha!
Most (I did not say all) of these “traders” are pissing themselves with panic while the sweat pours down their back soaking their shorts as they see their meagre savings disappear.
Control their emotions. =P Thanks for the good belly laugh.
———————————–
Well, Pebbles, from your post it doesn’t seem that you’re the one to teach them emotional control :)
———
Why should I be teaching them emotional control? Teach yourself comprehension skills. Apparently, you need to work on that. Alot.
#70 Jason Lenz on 01.29.21 at 4:27 pm
I am a 26 year old “moister” who has learned a lot from this blog over the 8 years I’ve been reading it. I have a good sized healthily diversified ETF portfolio, have never held an individual stock, and I rent quite happily…
And kindly ignore my idiotic peers. You would not believe the number of friends I’ve talked out of buying GameStop in the last couple days.
————
Wait until the one who didn’t listen pulls up in his new Porsche paid from GME profit and everybody you talked out of it turns to look at you while a long, awkward silence ensues among your previous friends.
Maybe then you’ll start minding your own business…
IF YOU side with the 1%ers in a pool filled with 98%ers your going to get eatin alive.
Thats basic survival training 101.
Now your either going to side with the majority or were going to “SHORT” the comments section.
Those who make their decisions using sweeping rationalizations, never cross the finish line and are envious and often hate those who use rational thinking/agonizing to make decisions that lead to success financially and otherwise. Covid-19 has certainly exposed those who live by sweeping rationalizations. Makes me laugh sometimes but also sad but they can fetch my dinner and groceries working for door dash and Skip the dishes which I like.
Oy-yoy-yoy we are so pooched.
Keystone cancelled, flight to south cancelled until April 30, now Moderna joins Pfizer in cutting back on vaccine deliveries to Canada. Lovely times.
Thanks Junior for putting so much faith in the CCP vaccine thereby putting us very low on the list for Pfizer and Moderna deliveries.
When will Canadian’s learn Junior just isn’t fit for the job.
Unreal…
Personally, I don’t have any Canadian investments. But it should be a warning to investors when pundits and authors warn loudly of a bubble there usually isn’t one.
Personally, I’m quite enjoying the show from a human psychology point of view. This story has it’s own unique twist as they all do, but it’s actually an old one and will end like all the others.
Sorry Howard, it’s really not different this time. But it’s nice there are suckas born every generation or things would get dull!
The “avaricious” youngsters aren’t losing any money in Canada.
It was a free substance. Free from JT. (CERB)
The joke is on all of us taxpayers!
The most dangerous thing about WSB is that they don’t care about their money. They brag about being irrational. They are used to living on ramen and playing video games.
Money is nothing but a number on the screen. Their reward is watching billionaires cry on tv and watch the masses awake to the rigged game that’s played on the backs of hard working people.
You can only screw over the little guy for so long before they start screaming eat the rich. This whole thing is a powder keg waiting to blow.
#90 Sail Away on 01.29.21 at 5:00 pm
#70 Jason Lenz on 01.29.21 at 4:27 pm
Maybe then you’ll start minding your own business…
—
If everyone “minded their own business” GME would still be worth $5. No car.
#45 IHCTD9 on 01.29.21 at 3:28 pm
Bang on Mr. T. These WSB guys are dancing fools. I was looking thru some of WSB’s “loss porn” threads. There are lots of them. Many typed up as the poster is throwing in the towel licking a 6 figure loss earned over a matter of months, sometimes just weeks. Maybe 1 guy out of a thousand redditors makes bank, the rest evidently blow up like water in liquid salt.
/////////////
This is the newest version of a pyramid scheme except the ones who got fleeced don’t seemed to mind.
off topic, what are the general dimensions of your rocket stove/heater?
#89 Stone on 01.29.21 at 4:59 pm
LOL what I clearly meant is …you’re not one to talk, given your extremely emotional reaction to a simple statement. Yeesh. Do you assume a literal interpretation of everything you read?
Anyway this dialogue isn’t worth continuing.
#73 Faron on 01.29.21 at 4:29 pm
Last one: TSLA put update
———–
Cool story.
Here’s one I call TSLA buy and hold:
A sailor I know bought TSLA in June 2013 for 86 (essentially 17 in light of the 5:1 split).
Today TSLA trades for 793.53, or 4567.82% higher. This is lower than the all time high of 900. The sailor woke up to take some profit at 48x, but is letting the rest ride because he believes in the absolute frickin’ mind-blowing genius of the founder.
@ #67 Chamath’isms on 01.29.21 at 4:24 pm
“All the money in 2008 was made by suits identifying a market dislocation and exploiting it.
All the money in 2021 was made by retail identifying a market dislocation and exploiting it…until the suits intervened.”
The money hasn’t been made by anybody yet. Most of the hoodies are still in on GME.
I still get bemused at how people forget this. There are no gains until the investor/gambler/greater-fool actually trades to cash. You have to actually sell, to claim you made a gain(loss).
Conversely, today there was broad losses in the larger market. Those were real losses, as investors sold into a declining position. There most likely were investors taking gains, but I’m sure there was a lot that took losses.
According to claims made by a couple Redditors, some were liquidating their broader market equity positions to prop up GME. I don’t know if they meant today, or earlier this week, but the net effect is the same. Not only did they intensify their holdings, they gave up an opportunity buy into a dip,… all for a gamble,… all to support the one redditor that is at the top of the scheme.
So retail may have identified a market dislocation, but what ratio will actually cash out for a profit (hint: less than 50%)? Time will tell.
And my opinion is that it won’t be a long time.
#90 Sail Away on 01.29.21 at 5:00 pm
#70 Jason Lenz on 01.29.21 at 4:27 pm
I am a 26 year old “moister” who has learned a lot from this blog over the 8 years I’ve been reading it. I have a good sized healthily diversified ETF portfolio, have never held an individual stock, and I rent quite happily…
And kindly ignore my idiotic peers. You would not believe the number of friends I’ve talked out of buying GameStop in the last couple days.
————
Wait until the one who didn’t listen pulls up in his new Porsche paid from GME profit and everybody you talked out of it turns to look at you while a long, awkward silence ensues among your previous friends.
Maybe then you’ll start minding your own business…
———————————
Well he did say “in the last couple of days”, i.e. AFTER it has made its massive move. So it’s not terrible advice, unless his friends were planning to trade in and out several times a day (not many have the stomach for that given the extreme volatility of the past 72 hours).
But I generally agree that friends shouldn’t give each other advice in stock investing. Not a good idea.
Great Post!
When you take a risk management or a similar course in any business school, they tell you in the first class that selling call options, or shorting a stock has an unlimited potential for loss.
I’m positive that Marvin Capital folks are acutely aware of that.
Nevertheless, they chose to sell short and not buy any protection. Some out of the money calls could limit their exposure and spare us of the drama, at a reasonable cost. They chose not to do it.
The 10 billion dollar question now is – who’s gonna cover for their lack of prudence? Are they expecting to socialize the losses fort his preventable incident? That would be wrong.
Those who were expecting to profit should pay – Marvin Capital, their brokers, and those who lent them stocks.
Garth is a typical overconfident boomer.
They don’t regulate when it comes to the big guys manipulating to rake it in off the little guys.
Where was all the regulation when it came to naked shorts manipulating the market screwing the robin hoods???
GME to the Moon just like Vancouver real estate!!!
Love it. I’m framing this one!
The biggest lesson should be about el cheapo brokers. Robinhood looks in serious trouble. If you want to play the game, but not the entry fee don’t be surprised if you lose your prize.
Using social media to organize a pump and dump operation was a logical progression after Trump used his Twitter account to rally the masses. My guess is that the block chain tied to bitcoin is doing something similar by collectively driving up the price and then selling their coins into a hyped up market.
This blog has consistently warned against investment driven by FOMO and the last few days has certainly supplied proof that investment decisions should be made
on more than media driven hype.
I remember listening to my friends in Calgary brag about how much they had made buying Bre-X shares on the way up. Even the TSX was sucked in by the hype as a stock issued at 30 cents closed at $286.00 before the scam unravelled. It all ended in tears and several friends took years to repay loans used to buy worthless shares.
Caveat Dumptor is essential in this era of mass communication.
#57 binky barnes
You rock! I’m a fan. Rock on!
Freedom First
I bought 1,000 shares of BB (in TFSA) in early April of last year at $4.70 & sold at $32 on Wednesday! Which group of financial illiterates do I thank for pumping Blackberry up like that. I was going to hold for a wait & see long position, but I’m waaaaay happier to pocket $27,000 in 10 months. Complete luck, but I’ll take it.
There are old traders and bold traders, but there are NO old bold traders.
This is reminiscent of Bre-X and the junior mining craze at the time. Those involved were the first to take advantage of the internet pumping up Bre-X stock through new internet forums such as Stockhouse. Many stocks were pumped in the same way but in reverse. The stocks were pumped by insiders and retail “investors” lapped it all up like a kitty drinking milk. I never bought in to the fad but I certainly watched and learned from it.
The thing about life is everything new today has already happened in the past for everything. We just weren’t there to experience it. It will happen again in the future and those living at that time will think it is all new. And the cycle repeats.
The best long distance runners eat raw meat, run naked and sleep in the snow.
#109 Do we have all the facts
Good old Bre-X is complete example on what is going on; and this is before the internet days. You mentioned that a few friends of yours lost their shirts while a couple of mine became millionaires over night; they had the hindsight on when to sell.
I have been a holder of B.B. for years, usually around the $8 dollar mark and then all of a sudden it spiked and I sold it for $24; I guess all those years of waiting finally paid off,
Gotta know when to hold them and when to fold them!!
The market is always right, Garth.
#91 HUNGRY BEAR on 01.29.21 at 5:02 pm
IF YOU side with the 1%ers in a pool filled with 98%ers your going to get eatin alive.
Thats basic survival training 101.
Now your either going to side with the majority or were going to “SHORT” the comments section.
———
The vast majority of the 1% (likely 99% of them) are not typically gamblers. They mostly want to preserve and grow their wealth at a reasonable rate that they can outpace inflation. The hedge funds cater mainly to speculators and gamblers.
You’re pretty ignorant for someone claiming basic survival training 101. You do realize there is 201, 301, 401 and so forth, right? I guess you didn’t pass 101 yet to qualify for the higher levels. Pity, that.
As a 1%er, the grass is greener on this side. I’ll stay here, thank you very much. Also, their toys are better.
Did I just hear correctly on CTV news that refusing to take the covid test upon arrival in Canada would result in a fine of $750? Would people prefer to quarantine for 3 days in an hotel at their expense of $2,000? Can someone clarify?
BlackBerry has signed a deal with Amazon to provide QNX for integrating Alexa music into the infotainment systems in millions of cars.
Been there, done that, played the dot.com, pink sheets, pump & dumps, day traded….what goes up, must come down. When it does, who do you think has bought GME at these ridiculous prices? Not the wrinklies, not the invest co’s, not the ETF’s, nor the advisors. It’s no where in my Veritas RRSP model. So when sentiment turns to ” it’s time to find the exit, and fast”, who is left holding the bag? The Hoodies who jumped in. They are the buyers, and they’ll be the criers. It’s-not-a-video-game.
#118 Buy Low Sell High on 01.29.21 at 6:11 pm
Did I just hear correctly on CTV news that refusing to take the covid test upon arrival in Canada would result in a fine of $750?
/////////////////
Guilty till proven innocent.
Sick until proven healthy.
#118 Buy Low Sell High on 01.29.21 at 6:11 pm
Did I just hear correctly on CTV news that refusing to take the covid test upon arrival in Canada would result in a fine of $750? Would people prefer to quarantine for 3 days in an hotel at their expense of $2,000? Can someone clarify?
—————————————————
Sorry…wrong blog. Take a left, then a right. Go past the CBC website. Then a little further on the interweb. Don’t forget to scroll your mouse on your screen. Yes, scroll…your mouse…directly on the screen…of your monitor. Then click on a google search…that’s it…you got it!
#118 Buy Low Sell High on 01.29.21 at 6:11 pm
Did I just hear correctly on CTV news that refusing to take the covid test upon arrival in Canada would result in a fine of $750? Would people prefer to quarantine for 3 days in an hotel at their expense of $2,000? Can someone clarify?
////////////
you must take the test and also quarantine at your expense for three days and $2000,
If you test negative then you can go home and quarantine for another 11 days.
fooked ain’t it
#70 Jason Lenz on 01.29.21 at 4:27 pm
I am a 26 year old “moister” who has learned a lot from this blog over the 8 years I’ve been reading it. I have a good sized healthily diversified ETF portfolio, have never held an individual stock, and I rent quite happily…
And kindly ignore my idiotic peers. You would not believe the number of friends I’ve talked out of buying GameStop in the last couple days.
————
Wait until the one who didn’t listen pulls up in his new Porsche paid from GME profit and everybody you talked out of it turns to look at you while a long, awkward silence ensues among your previous friends.
Maybe then you’ll start minding your own business…
————————————————————–
Pot calling the kettle……
Market integrity ? Morals ? They have never existed in the stock market ! The only reason this is even news is because the big hedge funds are finally losing and retail is sticking it to them. How dare they !!
The market is not a very good place to be right now regardless of what side your on …all time highs, bubbles everywhere. Once stimulus stops the markets will come tumbling down like Humpty Dumpty.
I’ll bet at some point IF everything comes to light about all of this fiasco, it will be revealed that a small group that knows exactly what they are doing are behind the whole thing. They will make a fortune and these rubes will lose everything. Like every pyramid scheme ever.
Reddit manipulators? Hedge funds are masters of manipulation, how is ok for them?
How does any of that justify this manipulation? I thought you kiddos had morality, ethics and moral superiority. Oh well. – Garth
Garth do you think there isn’t anything wrong with the system already? Is shorting 140% ok? They found a weakness and used it to their advantage. This is a free market after all isn’t it?
Investing is not exploiting. Grow up. – Garth
Starting to regret moving all my financial accounts online.
Just wanna crawl back inside my Luddite Sleeping Bag and take a nap.
Just making me feel old.
25 years ago, when my buddies and I wanted to throw some money into the wind, we would get dressed up and go to the race track for the day.
Hey, that horse has a shiny coat, let’s put a hundred bucks on that one…
M46BC
#117 – Stone, well said. We earned our 1%er the hard way, working hard.
#115 Drinking – you said it. The key is to know when to sell. I’ve gotten greedy way in the past, been way up ($100K), held on, bought more, barely recovered costs. It’s very exciting, adrenaline rush when things are flying, FOMO….will the Hoodies know it’s not forever (unlike houses, so it seems), and get out with a decent profit, or be greater fools? Takes hard lessons to know to get out when the getting is good.
#102 ALL CAPS & others, you said it — no profit till the sale is done, money’s in the account. When all the rats are jumping off the ship, you may not get your order filled. Or not filled anywhere near where you’d like it. (lesson about stop losses, but they don’t always get filled). We teethed on Bre-X.
In less terrible news
The photo for today’s post is of a rescued fox named Juniper and a sweet old dog named Moose. They are truly best friends and live with a whole host of rescued animal misfits.
#101 Sail Away on 01.29.21 at 5:22 pm
#73 Faron on 01.29.21 at 4:29 pm
Cool story.
Here’s one I call TSLA buy and hold:
—
That would be a cool story if we hadn’t heard the exact thing from said defensive sailor a thousand times over. But, now that you’ve repeated myself, I’ll take the opportunity to repeat myself.
Here are some words from your genius dated July, 2020:
Yeah, wow.
Genius at sucking up to his manchild fans? Sure. But, when you are running a multi hundred billion dollar, publicly traded corp, not so smart. There are a lot of geniuses out there and there are a lot of very good CEOs. Something tells me that Elon isn’t in the somewhat thin overlap of that venn diagram. He may not plot anywhere on that chart. I would love to know what makes you think otherwise.
Currently TSLA is a decent, albeit low volume, EV maker with some serious QC problems sitting on a pile of vapourware in a market that is going to eat his company alive in a year. I applaud Elon’s bravery and he has some smart ideas, but I don’t think he knows how to deliver. The only way TSLA keeps this share price is through rampant fan-boy harvesting of new rubes and/or delivering on any of numerous promises that keep. getting. delayed. and/or a surge in demand for the cars.
Regardless, like GME, I wont touch it with any length pole.
#100 Howard on 01.29.21 at 5:21 pm
#89 Stone on 01.29.21 at 4:59 pm
LOL what I clearly meant is …you’re not one to talk, given your extremely emotional reaction to a simple statement. Yeesh. Do you assume a literal interpretation of everything you read?
Anyway this dialogue isn’t worth continuing.
———
I know. I know. Using brain is soooo hard. It’s ok. Take a breather. When the steam has dissipated from around your head, you can go back out and play again.
If your mom lets you.
Dear Garth
I have decided to write after your recent post as I believe the public is confused about situation surrounding GME. I have been watching trading action and could clearly see blocks of shares in the thousands hitting bids – these are not hoodies with their limited capital. To put this into perspective, one would need close to a million in margin to buy 10K of stock at 150 (i think the real squeeze started after hours on tuesday).
Hoodies may have started the move, but real wolfs in sheeps skins are funds that saw opportunity to make a coin at the expense of their fellow traders. This is how Wall st operates – sharks eat sharks.
All the best and stay healthy.
I looked at a certain financial statement a few days ago. Wow! Losses everywhere. I did a lot of selling after that.
Trading is tough. Few survive. Every time I do a trade I factor in how much I’m ready to lose.
Well said, Garth. You didn’t waste a single word.
These fools don’t even know they are being played, and the whole affair reeks of major manipulation. I mean, seriously, the Reddit gang couldn’t find any value stocks to push from real, credible companies?
But you’ve gotta admit, Tenev really knows how to play with his deplorable prey before he eats them for lunch:
Just listen to this crap (it would actually be funny if they didn’t fall for it so easily):
“What we’re seeing is really a new era of market dynamics, it started last year with pandemic and its accelerated through the first month of 2021,” Tenev said in an interview, adding that the involvement of smaller investors was part of a “positive transformation” in trading.
Tenev reiterated remarks he made earlier this week, in which he defended retail stock buyers that “have felt like they’ve been talked down to. Lots of them felt like they haven’t been taken seriously,” he said.
Marketing 101: find a nerve to strike and keep on hitting it as the cash rolls in. It’s quite remininscent of the Trump ploy, really.
Zoolander 3. Script update.
Prime Minister Zoolander looks at the crowd of Munchkin politicians before him and says to himself: “I don’t think I’m in Canada any more,” then he says to the Munchkins:
PM Zoolander: “Where am I?”
Munchkin Politician: “This is the U.S.S.A.”
PM Zoolander, shocked, looks around himself and notices the curled up stockings under the house and rushes up them to see if she or he’s okay.
Munchkin Politicians: “Insurrectionist! Seditionist! Domestic Terrorist!”
PM Zoolander shocked at their response quickly moves away from the stockings and says:
PM Zoolander: “I just wanted to see if she’s okay! Who is that? Wait a minute. The Wicked Witch of East New York, Queens? Is that Donald Towers in drag?”
Munchkin Politicians: “Hate speech! Domestic terrorist! Homeland Defense! FBI! National Guard!”
A group of Munchkin National Guard Soldiers step forward. Although their uniforms are covered with gasoline, motor oil and axle grease stains from sleeping on the floor of their parking garage barracks their cork-popping air guns still look dangerous to PM Zoolander’s eyes.
PM Zoolander: “Wait! Wait!…”
P.S. Garth, I can offer you an even better title for today’s post:
Boomersplaining.
Ok, Boomer?
Inter-generational animosity isn’t new. Hoodies are angry and have discovered call options. They want to lash out at perceived causes of the current enormous wealth inequality. Better hope they don’t discover puts.
Regulators have been asleep for 20 years. I would expect that “ manipulation “ will have to get a lot stronger before they’re likely to do anything.
Garth,
I’m a years long fan, and have used your advice over the years to do quite well for myself. I don’t hate you at all (as you suggest). But I’m dying to know:
What do you think of a hedge fund that shorts 140% of the float? Seems foolish to me, and perhaps they’re reaping what they sow (and have been for years)?
I don’t care, actually. Nor should you. – Garth
One thing about this GameStop thing is that it is giving a whole bunch of people a lesson in markets and how they function. Last night starting at 11pm I spent 45 minutes explaining what “short selling” was and how a “short squeeze” works to my 14 year old son because the buzz is so big he’s even reading about it on his gaming sites. I used napkins for shares and salt and pepper shakers for investors and a brown banana for the hedge funds. I think he’s ready for Wall Street now. I think I am going to have to throw the banana out because I don’t think my wife is planning to make banana bread anytime soon. There are really only 2 things you can do with a brown banana, throw it out or bake it. I think the analogy holds.
We apparently woke my wife up and she came out to make sure we weren’t fighting. We were not.
He still walked away feeling that short selling was morally unjust. But he is also a kid who when 7 years old asked me why I had a radar detector unless I planned to speed. I tried to explain that it is part of the market price discovery process, but still at 140% of the float he wasn’t buying it.
And I am not sure I buy it either. At 140% of the float, each short share representing an artificial share that somebody has bought so a long position too, the long position was 240% of the actual float. If that doesn’t look like an attempt at market manipulation I don’t know what does (by the shorts I mean). It is one thing to take a short position in a share you think is going down, it is quite another to effectively double (or more) the float.
So I won’t be crying for anybody who loses money when this is all over. You reap what you sow.
————————————-
And my guess is the hedge funds are “learning by experience” as well. In retrospect, who on earth would short the heck out of a gaming store in the age of gaming? My son is a regular customer at EB Games even when he isn’t buying new games. He also buys the paraphernalia. Figurines, shirts, etc. Ya, you can get that all online too, but there is a certain customer experience associated with being able to see it all at once and pick one. Brick and mortar stores have a “feel” to them that you don’t get online, whether it be EB Games, Hot Topic, or Bass Pros. Especially Bass Pro. I can spend all afternoon in Bass Pro. There are a lot of different smokers to consider. And lures.
Shorting AMC probably also a bad idea. Do you know what is going to happen when covid goes away? Unprecedented numbers of millennials cramming themselves into movie theaters. It is a particular form of entertainment that the millennials love. The malls will pack up too, as there is pretty much no better way for a teenage girl to spend the afternoon than shopping with her friends, followed by a movie. It is a social outing as much as anything, and I am sorry the online experience just doesn’t measure up.
————————————————
Third topic, movies. If you are my age you are probably frustrated by the lack of plot and humor in modern movies. The Marvel movies come to mind. It all started with Star Wars and “the force” plus all those fancy space ships blowing up. No real plot or dialog required. So sad. But then I read some psycho-babble article stating that over 80% of communication was non-verbal, in other words visual. The movie makers figured it out. The kids don’t want a complicated plot carried out within a predefined universe like the old Star Trek movies, or maybe a weird twist on reality like “Garp” or “Gump” , they want to “see” things. Big things. Big things in high def. With explosions. And that is what Hollywood is providing. They don’t make many movies anymore that might appeal to someone my age, but why would they? The kids are the future and they want to see a fancy spaceship explode.
The quintessential modern western was probably “Unforgiven”, and it was the last of its kind. The kids don’t want to see that crap because it involves morals and the harshness of life and other crap and there are no spaceships with lasers.
Garth,
Why you decided that somebody don’t like you or even hate. Everybody here loves you… in different way…. But for sure we all love you. We can be disagree with you – that is normal! If everybody would be agree with you …. I’d live this blog forever (I’m here probably 5 years). Personally I’m interesting to have different opinions about what you telling us from other people. Some of opinions is very interesting for me and I’m thinking for you too. It helping me to develop and do correction my own knowledge about market –housing and financing. So, thanks everybody (Garth, you in list!) who coming here and “hate” or “love” you Garth.
————–
Garth…This undermines market integrity where pricing is constantly scrutinized and adjusted (earnings reports, fundamental analysis, forward guidance, prospectuses, p/e ratios, macroeconomics, sector analysis – you know, the adult stuff)….
What about Tesla – let’s just use Tesla like example. They have first year with profit, but capitalisation more than total capitalisation all car producers!
Tesla already “undermines market integrity”. But nobody complained. Why everybody so excited with GameStop? Problem existing very long time and nobody care.
———-
Garth… Taking a rabble of four or six million traders, hopped up on Internet chat, and throwing it against one security or asset to purposefully inflate its value…
—–
First. Same doing investors from Wall Street. Only one differences – they have enough money to buy not one- two shares – just millions to play same game. And doing same like four or six million traders with one-two shares. Unfortunately for us they game hidden underground.
Second – Sorry, I completely disagree to call this investors – RABBLE. Why they rabble – only b’s they used new ideas and technologies? Only b’s they didn’t use investing funds? I’d call them like TALENTED investors, who can organize and reach one goal in very very short time just using computer. They may change investing process. Time came for that! Of course somebody will lost money. They know risk and know what they doing. For me, even they lost money – positive thing is that they tested in real time new trading technology. Tested successfully!
Market integrity? Central banks have done their very best to destroy that. Their stupidity has removed price discovery, encouraged reckless gambling and people taking on unfathomable debt loads. One look at interest rate policy errors for the past 14 years should be clearly evident.
I like your blog a lot Garth and think you’re a rather brilliant guy.
You are, however, obviously biased on this topic due to your day job. It’s why you also have been crying “the sky is falling” about the housing market for the last decade – while in the meantime house prices have provided rather nice returns for people who chose to ignore your advice and buy in – especially in the two largest markets in Canada. You seem to disdain ‘permabears’ (Rosenberg etc.) who are constantly pessimistic about the financial markets, and proclaim that just because they are always crying “the sky is falling” and then it eventually does, doesn’t make them experts on anything. Well, what will you claim when the housing market corrects, except “I was right all along”.
In truth anyone with common sense can see that both are artificially inflated bubbles. It has been easy money for boomers, especially in more recent decades…every crisis is met with the money printer going BRRRR and immediately recovering the financial markets and boomer portfolios, as well as inflating their real estate (normally 2, maybe 3 properties at any given time). In truth central banks seem to younger generations to exist primarily to preserve the wealth of the baby boomers at all costs. Any glance at a long term chart of the S&P 500 just shows a hockey stick, much like the chart you displayed of Gamestop’s exceptional run, except with a few brief dips in the last couple decades which were met with QE and miraculous recoveries. Nothing natural about it. Nothing natural about a skyrocketing stock market while a pandemic continues in full swing. But you don’t complain, not one bit, in fact there has been a fair amount of gloating in the last year about how well your B&D portfolio is panning out.
So why not let the kids have a little bit of fun for crying out loud?
I really do think you’re a brilliant guy. We all have our biases.
I know I singled out the boomers a lot in this post, but man oh man you have come up with your fair share of terms of endearment for us millenials…perhaps we’re both a bit ageist?
Nasal swab for Covid apparently not good enough. Get ready for your anal swab!
https://www.forbes.com/sites/roberthart/2021/01/27/china-deploys-anal-swab-tests-to-detect-high-risk-covid-19-cases/?utm_campaign=forbes&utm_source=facebook&utm_medium=social&utm_term=Gordie&sh=5f31adf96e81
#29 Jesse
I did look up FD and that’s hilarious.
Here’s the link to anyone too lazy to search for it:
https://trialsofchampions.medium.com/what-does-fd-mean-on-wall-street-bets-8e162b483cb6
#81 Penny Henny on 01.29.21 at 4:46 pm
, which is expected to be more than $2,000,” he said.”
////////////////
$2000/per person for a three day stay. Must be a nice place.
————————
that insufferable, vacuous, pathetic, trust fund sockhead probably doesn’t know that some hotels go for less than 600/night.
“ what’s taking place sure smells like deliberate crowdfunding manipulation. The issue is simple: values purposefully detached from reality.”
Hmm, just like Real Estate, eh Garth?
Where have houses been crowdfunded? – Garth
These Reddit investors have…what, a few hundred bucks each they’re prepared to light on fire? Maybe a few whales have a thousand or so?
Hedge funds who shorted Gamestop lost $14.3 BILLION in ONE DAY (today).
The kids won this one hands down.
So I asked my Mill (late stage) daughter who is in banking at a exec level what she thought of all this. Here is her reply….(remember she is discussing this with her dad)
“…Definitely an interesting situation, but it does not surprise me at all. Look at what happened with Enron, Worldcom and the 2008 US mortgage crash. More recently all the cryptocurrency fraud.
These were big deals but brushed under the rug after the initial panic because big business made money and did the similar things (hedging, insider trading, etc.). Heaven forbid anyone find out what they did.
However now that “stupid kids” have done something to make big business lose money it is being investigated and more security measures are being looked at. This all goes to show that the markets are still ruled by the big boys and us little people are at their mercy Sorry just my little rant!…..”
So there is no love lost for the banks even when you work for them….huh, go figure?
Whatever side one is on in this current brouhaha let us remember that if you are reading about it in media, if you are hearing about it from media or workmates, etc. you are well behind what is currently happening.
I, for one, eagerly await the deep dive, long form journalism from the likes of Salon, Vanity Fair and Vox online that will come out soon enough.
~~~~~~~~
~~~~~~~~~
#25 the jaguar on 01.29.21 at 2:55 pm
…we see it over and over again. Their favourite bit of fun is the pile on, cancel culture, and bully tactics…
Unlike your ham fisted attempt to cancel Faron and the subsequent piling on of your fans that certainly bordered on bully tactics, eh?
exploiting vulnerabilities in a system designed by people who never thought folks could be this stupid. Now we know.
almost lost my afternoon martini!
These wallstreetboys aren’t as dumb as you think. What they did was load up on call options before they started driving up the price of all the targeted companies. After the shares price increased due to a short squeeze, the call options they own increases in value exponentially. Some of these guys that were in early made upwards of 40000% returns on their initial investment. Thats the part you failed to mention.
The hoodies don’t have ethics or care about moral superiority when doing acts like this – to them it’s like taking a skateboard to the windshield of a Mercedes- and it’s beautiful- it’s their version of a Banksy painting – it’s Anarchy in the purest sense and it’s liberating as hell for them – dog speed kids dog speed
#145 Nelson on 01.29.21 at 7:26 pm
“I like your blog a lot Garth and think you’re a rather brilliant guy.”
I’ll try and help you out with how to actually present a complement. It’s simple, deduct the hedges.
It should be as follows:
“I like your blog Garth and think you’re a brilliant guy.”
Do you see the difference?
The LPC are such sleazoids. Appologies to the Mafia.
#129 Flop…
In my days, we studied, watched the trot, got to know their attitudes, sometimes the cocky one’s got the best of us but we found those quiet, muscular one’s usually made us a few bucks that had all of us just enjoying life! :)
Apparently everybody now hates me. Finally.
___________________________
Oooh, p… surprised? Don’t be, … there can only be peace for you on this stage of yours, Mr. Turner, … when every single person not only accepts what you preach, but thinks exactly as you think. Also believes what believe, yes, … and when you change your tune, changes at the same time, too!
Anyway, … don’t fret much, Sir. One day, … when your
amour propre finally becomes fulfilled, … only then can there be peace on this stage of yours. Hate will vanish, …
Best,
F.S. – Calgary, AB.
First, why would you accept financial advice from a reddit board? Second, how is this different from delinquent gamblers thinking they can beat the house. Third, we’re all on the hook because that’s taxpayer and stimulus money being thrown away.
#139 Millennial Realist
Show some respect or eff off. Garth is offering a “FREE” blog to all that are interested! We can disagree but you need to grow the @## up!
A bunch of hedge funds shorting a stock and WSB boys taking the other side.. nothing new, except that this has become big news.
It’s normal for traders to jump on a highly shorted stock, short squeeze happens every day across many names. GME is just a bit extreme example.
But it’s interesting to see how those “nose up in clouds” fund managers cry and run to big daddies asking to change the rules now that they are getting crushed.
Citron guy got what he deserves – he was manipulating and downgrading stocks for years, to crush little guys, then would buy it and run it back up. Karma.
There are always two sides in a trade, some will make money, some will loose. What is interesting in this saga is that those pro`s haven’t used stop loss – pure arrogance and egoism.
I
@#288 Howie Geeker
“Since when are you rich? I thought you sold your Vancouver home in 2010 and have been bitter about it ever since?”
++++
Actually sold in 2012 and made a hansome profit after living there 20 years ( 10 years mortgage free.)
Dumped all the money inta a balanced and diversified portfolio and …..to the moon Alice.
I havent posted much today.
Was busy wrapping up one job.
Got back to the office late and had a note to call a customer…..
Landed a HUGE contract.
It’ll keep my employees busy for 5 months.
And the profits…….Oh the juicy profits.
I hate to repeat myself but….when you work hard and you can ignore the pc bullshit…..
The rich really do get richer.
:)
Time for another cold, frosty, Kokanee…..
The hoodie mania has made it’s way over to LinkedIn as well. Saw the following posted today from a very young looking lad with “entrepreneur” in his headline.
“I just bought GameStop stock.
Not because I think I’ll make money. Not because it’s the “smart” thing to do. Not because I’ve got a ton of extra cash lying around but because what happened yesterday was corporate terrorism.
I believe in capitalism and yesterday showed and proved that the ultra wealthy are rigging the game against the common person.
I took a stand this morning to send a message with everyone else that we will not sit around and watch the wealthiest of the wealthy make billions of dollars at the plight of everyone else.
Whose going to join in the movement?”
Aren’t they cute? – Garth
@#52 Floppie
“Would you prefer to get Anal Swabbed or Charles Schwabbed…”
+++++
Good one floppie.
The Peking Poop Plunge or the California Handshake .
Either way, a disturbing visual.
@#161 Drinking is my entertainment
Re, Millenial delusionist
“We can disagree but you need to grow the @## up!”
+++++
You’re asking a lot.
Investor’s and trader’s primary job, if they want to survive (and thrive) in this game is what? Risk management – position sizing and stops vs targets, risk:reward.
I am sure majority of GME longs will become bagholders, minority has made a fortune, market is very efficient machine for money transfers.
I have ETFs and blu chip dividend names in my investing account, but I also swing trade options and leveraged ETNs in my trading account.
It doesn’t matter which account it is – stop loss, position sizing and profit taking rules apply. The difference is in time frames of my charts – weekly vs daily/intraday.
And this is my second job. It takes time, and more than that – money one has to pay the “market education fees” i.e loses. It’s a serious business, requires planning and discipline.
If people are not willing to learn, they should pay professionals, most end up doing that when they lose their shirts.
Becoming a doctor, engineer, plumber, carpenter, lawyer – takes years of learning. Why would investing and trading be different? But people think it’s easy. It is not, not at all.
Great post Garth. Just maybe these new “investors” can learn something from the Boomers after all!
#166 crowdedelevatorfartz
lol,
thanks Fartz, I have heard from a few that I am entertaining to them, I am glad, we all need a break from this crazy fiasco out there, stay safe everyone!! :)
Wall Street Hedge Funds got their noses bloodied and are now crying foul ? pffft.
They’re big boys and girls and know the risks of shorting a company 120%
I still applaud the Reddit kids for ‘sticking it to the man’
#145 Nelson on 01.29.21 at 7:26 pm
You state the obvious and then you do a good job of assuming the rest. And your reading comprehension needs work in relation to what you THINK Garth is about.
Do you feel better now? And by the way you own a house for longer than ten years and most likely longer than any stock. If you think they are both in fact bubbles…what exactly do you think will happen next…especially with these increased shocks to finances. Remember every generation thinks their brilliant before they get the shock of a lifetime.
Blog on Garth and appreciate your candor ! We have been reading with great interest ever since the Smoking Man almost went down with his ship in a thunder storm on Lake Ontario . Cheers fellow Canadians, pulls pull together rather than criticize.
#164 Timberrr
Aren’t they cute? Garth
And that Garth is your typical condescending, pompous, and sad put down you always fall back on – shame on you – these “kids” are doing there utmost to be alive and feel a sense of empowerment, a feeling of being in control and NOT a part of a very old and polluted archaic system – perhaps #159 is right
When they fight for something that actually matters, I will be impressed. This ain’t it. – Garth
You’re doing the world a service, Garth. But you already knew that. Keep fighting the good fight.
#46 Millennial 1%er on 01.29.21 at 3:30 pm
I think Linda is really GPT-3.
I’m going to admit it. I’m heavy on OTPP.
Best idea to solve so many problems with the stock market manipulation is a small transaction tax that would pay for sooo much society needs while not make a dent in the ability for longterm investors to support enterprise, innovation, productivity and their own savings.
Garth,
I love your perspective, but what you fail to understand is that this started as a trade, but it became so much more than that once our ability to trade was crippled.
1 – I purchased shares to speculate (I’m an adult, I understand I might lose money, so I risked less than 1% of my $$ on this)
2 – When the price crashed, I tried to buy a bit more. I couldn’t. I’m not trading on margin, this is cash. Do you know how powerless I felt when this happened?
3 – I could have sold for a profit this morning. It doesn’t matter. It’s not a significant sum. So I didn’t sell to support the people who also didn’t sell.
By the way, the guy who started all this is no one less than Michael Burry, the guy from the Big Short. Everyone else is a small fish compared to him.
Is it completely stupid for me (and others) to buy this stock at the current price? Yes.
Does that give the right to the broker, or anyone else, to restrict my ability to do so, to minimize their risk? No.
So, to summarize, I fully expect this will not end well for a lot of people who put more on this trade than they can afford to lose. I feel bad for them, but instead of trying to force them to close their positions (and make them lose money along the way), why didn’t the brokers simply put a BIG disclaimer when someone tried to buy into this insanity?
“Yes, valuations get out of whack when investors make bets on the future, but this is new ground. This is inflation merely for the sake of creating notional wealth. Greed, personified. Turned into a video game.”
Bitcoin?
Kilt.
Shorting 140 percent of the stock!!
Suck it up, Garth, when you had Hedge Fund spending billions on fiber optics in the ’90s to increase their trading speeds.
Greed is Good, lmbo.
Boomers, you are useless parasites.
Exit, stage right.
#133 Faron on 01.29.21 at 6:49 pm
Currently TSLA is a decent, albeit low volume, EV maker with some serious QC problems sitting on a pile of vapourware in a market that is going to eat his company alive in a year.
————–
You may be right. On the other hand, you may be wrong in the same way you were with your last eleven TSLA predictions.
I’ll choose the door on the left without the repeatable pattern.
Hey, did anyone hear about this hedge fund that apparently shorted 140% of a company’s float??
#133 Faron on 01.29.21 at 6:49 pm:
The competitive advantage Tesla has over all automotive , space, utility companies and any other sector for that matter is their CEO, Elon Musk. He is the reason Tesla and Space X ranks first & second (alternates annually ) that the top engineering graduates want to work for. Having the pick of the first draft engineering talent is always your superior competitive advantage. And please don’t sing “The Competition is a Coming” song, that one was worn out by Bob Lutz along time ago.
@#134 Stone on 01.29.21 at 7:00 pm
#100 Howard on 01.29.21 at 5:21 pm
#89 Stone on 01.29.21 at 4:59 pm
LOL what I clearly meant is …you’re not one to talk, given your extremely emotional reaction to a simple statement. Yeesh. Do you assume a literal interpretation of everything you read?
Anyway this dialogue isn’t worth continuing.
———
I know. I know. Using brain is soooo hard. It’s ok. Take a breather. When the steam has dissipated from around your head, you can go back out and play again.
If your mom lets you.
–
lol, you two keyboard warriors are hilarious.
by the sounds of it, you’re both stuck in your folks basement.
#156 Nonplused on 01.29.21 at 8:00 pm
#145 Nelson on 01.29.21 at 7:26 pm
“I like your blog a lot Garth and think you’re a rather brilliant guy.”
I’ll try and help you out with how to actually present a complement. It’s simple, deduct the hedges.
It should be as follows:
“I like your blog Garth and think you’re a brilliant guy.”
Do you see the difference?
—————
More concise: Brilliant blog, Garth!
The rest can be inferred.
Investing is not exploiting. Grow up. – Garth
With all do respect Garth isn’t shorting GME 140% exploitation?. They were taking advantage of the failing company. I’m not here to criticize or argue with you. These are good conversations to have.
Thanks for everything you do.
So the moral of the story is that its ok for institutional investors to gamble with other peoples money by shorting stocks and manipulating prices but the young person today should just buy indexes and rent an apartment until they can move into the old age home? Theres no doubt this cluster of garbage is going to come crashing down but it wont be because of the young guy at home on his computer with a 20year old forum software and a trading app. It will be because governments cant stop buying votes with printed money to the point at which the currency collapses. By that time people will understand the value of bitcoin being the best invention since capitalism! A currency the government cant manipulate.
Okay this is getting a bit surreal.
Listen Robinhood as a broker is Mickey mouse, get a grownup broker that has the size and liquidity you so proclaim as injustice. Yes you have to pay, and margin is expensive. Gee think RBC, Etrade or Scotia clear orders by the goodness of their hearts and / or HFT benefactors?
Why is it gmail and youtube are “free”?
Hi Garth, just another Gen X professional here apparently like many of your readers.
Great post today. We’ve seen this movie before and Bre-X and the .com madness come to mind in particular. This will end in tears and sadness for most. A handful will win big (they’re probably already out) and financial ruin for some.
Advice to hoodies: ignore the foolish “hold!” nonsense and get out while you can. The easy money is gone and the sharks are circling. When this goes down, it will happen like lightening.
#142 Nonplussed
The quintessential modern western was probably “Unforgiven”, and it was the last of its kind. The kids don’t want to see that crap because it involves morals and the harshness of life and other crap and there are no spaceships with lasers.
———————
Yep.
Must have watched the movie at least 5 times.
1st class cast.
#162 TrendIsYourFriend on 01.29.21 at 8:28 pm
“What is interesting in this saga is that those pro`s haven’t used stop loss – pure arrogance and egoism.”
Stop losses aren’t all they are cracked up to be. In a case like what happened to GameStop they can make matters worse. So say the shorts have set their stop loss at $25 but it goes to $250 in a few minutes with no offers, then the computers are busy trying to buy at whatever price. Suddenly there is this big mechanical buy that knows no price. That is why most active traders do not use computerized stop losses. They have a stop loss, but they implement it themselves.
But when things go this whacky the risk management committee tells their wives and husbands they won’t be home for dinner and sits well into the night formulating a strategy for tomorrow, which includes how much to buy or sell at what prices, estimates as to how long the crazy can last and whether they can survive it, and who is calling who about raising the required funds and bailouts.
“Probing stops” is a famous trade strategy. You know there is a bunch of bids on the board at declining prices. But where are all the stops? So if there isn’t very much volume on the board, and you want the price to go down because you ae short, you start hitting the bids. Doesn’t take a whole lot of money to do in smaller markets. Then the machines that have stops set to sell if the price falls below a certain level, which prices might already be on the board but lower down (but are hidden, stops never show), off they go. Hopefully you have started a computer generated cascade and down she goes as all the computers are trying to sell. Well then you close out your short by buying from the computers. Whee!
Never put your faith in a computer stop. You’ll guarantee the stop gets exercised, but the price you put in only works in really liquid markets.
You can’t even tell your telephone broker, if you have one of those still, “call me if January goes down to $3.20”. He’ll immediately start telling his other customers that $3.20 is the number (but not your identity) trying to get deal flow to happen so he can earn his commissions.
Heck back in the day NGX, which was all on line, had a guy who would look at the deal flow and phone around seeing if he could get trades to close. We were anonymous to each other, but not to him.
I remember a story told to me by a friend of my father. Just after WW2 he travelled by train to Vancouver for a new life. He was looking out the widow while going through the Fraser Valley and saw a farmer throw a huge salmon into a trench as fertilizer.
If they can do that, this is my place! He did well.
“What do you think of a hedge fund that shorts 140% of the float? Seems foolish to me, and perhaps they’re reaping what they sow (and have been for years)?”
I don’t care, actually. Nor should you. – Garth
————
Really? Naked short selling is illegal, yet no one is in jail. Where is the SEC?
Not one banker went to jail for the 2008 debacle.
Rules/Laws are just for us peasants.
Petulant. – The West
I am surprised that anyone is surprised that our 200 year old stock market business model is next on the web disruptors’ list. It had to happen. I am only surprised that it took this long. Yes how do national regulators control global movements? Answer is that they can’t.
No one will cry for the global merchant bankers and former market makers as they are universally hated due to 2008. They are just going to have to learn play the new games with the new rules. The internet disrupted the travel, retail and consumer banking established models and many other legacy businesses. Now it is the turn of the stock markets.
#142 Nonplused on 01.29.21 at 7:20 pm
. I think I am going to have to throw the banana out because I don’t think my wife is planning to make banana bread anytime soon. There are really only 2 things you can do with a brown banana, throw it out or bake it. I think the analogy holds.
***************************
I’m not so good with all the fancy shorts and investing stuff but I know you can freeze the brown bananas for futures in banana bread.
I remember a story told to me by a friend of my father. Just after WW2 he travelled by train to Vancouver for a new life. He was looking out the widow while going through the Fraser Valley and saw a farmer throw a huge salmon into a trench as fertilizer.
If they can do that, this is my place! He did well.
I got a kick of another friend, Stan. He became an outfitter and a bush pilot. He did care much for the American hunters but he took care of them. They came back. He overloaded his plane, a twin otter. He got his passengers to lean forward as he took off. An amazing guy and he convinced my father to buy an acreage near Dawson City that he had flown over many times. I pumped money into that place. My dad did make it even at the the end of the day.
Stan gave my father horses and a cat to log it while the Alberta Government had a pulp mill nearby. The German neighbors loved him and he sold hay, cheap. They would send their equipment over to harvest.
It ended after a couple of years when Stan divorced and he was wiped out. My daughters enjoy the time they were there though the 9 hour drive was a chore. I enjoyed exploring the area. I nearly bought a house near twin falls in the Peace River area after the coal mines shut down, temporally. They were new and beautiful and cheap but I though an 11 hour drive one way was a bit much when I did not have the spare time. A company town and a decision I regret.
So you want to make a little money?…buy a new Porsche.
Why not buy a million dollars worth of GME shares at say $250.00 per share (example only)…gets you 4000 GME shares…sell them 5 minutes later when they hit $450.00 per share. You bank $800,000.00 earnings…give half to the taxman, then call the Porsche dealer to order your new 911 turbo convertible 15 minutes later.
Or put $500.00 hoodie money down at $250.00 per share (example only)…gets you 2 GME shares…sell those 5 minutes later when they hit $450.00 per share. You bank $400.00 earnings…then go right out and buy you a new skateboard.
….in a perfect world…this world…and not a thing under the sun goes wrong…all in a days good investing.
Forget about any vaccine coming to Canada. EU just made it illegal to export outside the bloc. ‘22 and hundreds of thousands more dead might just be a dreamscape. Likely Canada will be a killing field where pariah stays will isolate the country for years.
No link yet, this was announced only minutes ago on DW English Media Germany.
Sorry to all you Trudeau supporters. The fact is that Trudeaus cancellation of funding for bio-tech industry in Canada will be a real killer.
…and not one word about Melvin’s 140% shorts, Garth? Not fair.
If people in suits do it you have no problem?
Expert Hoodie Newb Options Traders…Too Funny.
I like multiple boring income streams, year in and year out. I am amused at the market folly but insulated from it. Back to grooming the forest trails.
There is a show on CNBC where three ‘experts’ describe how to play both sides of a trade with the objective of making money no matter what might happen to the price of a stock. Various forms of derivatives allow investors to risk a minimum amount of capital to make money when a stock appears to be ‘in play’.
What I gathered from their strategies is that the key to making money is as simple as market volatility. By tracking stocks that are attracting attention an investor can play both sides of the action and exercise the one side that makes money.
The ‘VIX’ is the bell weather that guides the weighting of their ‘puts and calls’ decisions. What I gathered from all their chit chat is that media hype creates volatility and an opportunity for them to make money with little risk since they play both sides when the final outcome seems uncertain.
In my opinion the use of social media to create a buzz and subsequent volatility for the stocks of companies that are facing an uncertain future enhances the chances of a ‘straddle’ becoming profitable.
At least in the housing market no one can purchase a derivative based on whether the price of a home will go up or down in the future. One could only imagine the battle to influence public opinion if investors could use social media to hype both sides of future residential sales.
Obviously I love and respect the blog, or I wouldn’t bother being here… So here goes. There is a complete and total logical inconsistency in the actions you recommend. As more assets flow into etf’s, that very dynamic of daily recalibration of a stock’s value (earnings, news, etc) falls by the wayside. At the whim of the etf sponsor, or index manager such as s&p, a stock will be added or removed and given a certain weight. After which, the blind funds entering or leaving the etf cease to reflect on the actual value or prospects of any individual company within. As the market share of etf’s grow, more funds disconnect from valuations. It is ONLY the traders of individual securities who can fulfill that essential function.
Not to mention the systemic risks on the downside when etf’s become too big a part of the market… Anyhow, keep up the good work. Interesting times.
#142 Nonplused
There are really only 2 things you can do with a brown banana, throw it out or bake it.
——————————————–
Smoke ’em up ’60’s style! (E-lec-trickle-ban-an-na)
https://www.youtube.com/watch?v=64mb_hUOb4g
#197 Don Guillermo on 01.30.21 at 2:11 am
#142 Nonplused on 01.29.21 at 7:20 pm
. I think I am going to have to throw the banana out because I don’t think my wife is planning to make banana bread anytime soon. There are really only 2 things you can do with a brown banana, throw it out or bake it. I think the analogy holds.
***************************
I’m not so good with all the fancy shorts and investing stuff but I know you can freeze the brown bananas for futures in banana bread.
***************************
Yes and yum.
Wow..what a crazy week. A couple of observations if I may.
1. Never assume you’re the smartest guy in the room.
2. When something goes wrong in your life, have a look in the mirror and ask what you might have done differently to avoid the problem.
3. If you don’t understand how things work try googling it. ex:
https://www.fool.com/investing/2021/01/28/yes-a-stock-can-have-short-interest-over-100-heres/#:~:text=This%20can%20lead%20to%20market,short%20interest%20to%20exceed%20100%25.
I believe in capital markets but I also think we do a poor job of ensuring that everyone has a realistic opportunity to benefit… the social safety net isn’t in-line with the trillions of dollars of equity held by a limited number of people. The Reddit-induced attack was at least advertised as an attack on that system. True? Partially… no doubt some of the masses believed that’s what they were doing but there were likely a lot of others who knew very well what they were doing who capitalized on the ‘resentment culture’ that someone else has mentioned already.
The argument against the greed of the Hoodies holds equally (if not more so) for the big banks, investment funds, and multi-billionaires. There was clearly some form of stock manipulation here and we will see if the authorities can actually track them down and charge them. However, this points in the direction of curbing greed more broadly – people should be investing in companies that have good prospects (or that they believe in) and not investing in those that don’t. This includes shorting stocks… get rid of that and get rid of share buybacks (which takes money out of R&D, shareholder hands, employees, and inappropriately influences a company’s value).
Put the money back in the hands of those who legitimately believe in the company or into the economy more broadly through acquisition, expansion, and R&D while also keeping the speculators or gamblers on the side. There will always be a gambling component to the market but shorting and share buybacks increase that chance and the volatility that comes with it.
My 1.5 cents (in Canada so it’s only worth 3/4’s of 2 cents.
Death match – WSB flash mob VS the too big to jail mob. Who will win? The naive young ones see the light at the end of the tunnel without seeing the freight train.
This week CNBC was laser focused on GME — an insignificant, struggling stock sheltering in a moldy corner of the market. And suddenly, valuations and fundamentals were all the rage again. But only those of GME. They never say the quiet part out loud.
The quiet part: The small businesses, where social distancing could easily have been implemented, were locked. Their rightful profits were stolen and subsequently sluiced into the Nasdaq Bigs.
When the market tanked this spring (it’s last HONEST move) the fed juiced it with trillions. Now it sits at all time highs… while 10s of millions are unemployed and without any new job prospects.
Does this resemble a free & fair market? Not even remotely. We’re rapidly approaching a command economy.
How long before Robinhood becomes Robbin’ Hood? I give it a week. When it goes down…anyone using that trading platform will probably go down with it.
Maybe I’m wrong though. Because Google’s trying to save it. It’s good to have friends in high places isn’t it?
“Google salvaged Robinhood’s one-star rating by deleting nearly 100,000 negative reviews”
https://www.theverge.com/2021/1/28/22255245/google-deleting-bad-robinhood-reviews-play-store
@ #23
Never did….just ignore them.
Play your own game.
@#181 Boomers here to stay
“Boomers, you are useless parasites.
Exit, stage right.
++++
I came into the world kicking and screaming and plan to go out the same way….many, many, many, years from now.
Statistically speaking….there will be Boomers around for at least another 40- 50 years.
Will we have to put in elevators on our homes to help some of you kids get up from the basement in your 70’s???
Nah we’ll just sell our homes and move into 100 % care homes to be endlessly pampered.
Because.
The rich keep getting …..richer.
:)
#47 TurnerNation on 01.29.21 at 3:31 pm
So who H8s our freedoms? If you are not yet aware it’s the people running this country into the ground.
Key to Communism is breaking our spirits.
In Ontario:
1. Snowmobile trails in some areas have been closed by local health board comandants.
2. Ski Hills are closed by the government.
3. No sleeping overnight in Ice Fishing huts – by law
4. Drive Thru Christmas light shows – also closed. Too dangerous!? No, it’s trying to break people.
5. Overseas vacations are effectively banned; some provinces have curfews as errant kids would have.
Who will enforce all this? People like ourselves who are just Doing Their Jobs as they have bills, mortgage to pay. Willing participants.
– Only work is allowed Comrades, after which you return home and plug into the Globalists entertainment system and smoke government weed. Makes sense now why it was legalized. Nothing is ever given freely. This is the price.
Spot-on, sure ratifies my decade-old decision to bail on Canuckistan for a tropical Republic for retirement!
I see your point. Whole lotta Whackjob here.
Based on the recent comments from the steerage section, Turner Nation has risen in the ranks of credibility.
Everyone else is making him look sane.
He is right about a lot of issues.
Crowdedelevatorfartz is still the one who is always on the money.
My son picked up a tidy profit in about an hour on GME:US yesterday then went skiing for the weekend. If the rest of the Mills are that stupid then let the free market clean them out.
Ditto for the hedge funds. I don’t feel sorry for them either. They created a massive vacuum through ongoing corruption and now they’re surprised that someone figured out how to game them and make them eat it.
Too bad, so sad. Please do CUF.UN next!
#64 IHCTD9 on 01.29.21 at 3:59 pm
Rocket stoves look tempting and initially it sounds like you save big money on heating but:
#1. your home insurance will go up by at least 25% if you can get it after installing a homemade wood burning anything.
#2. you must be an excellent welder preferably pressure certified in order to make sure that there are no leaks, even pinhole sized because CO can be a problem with home built heating things.
#3 after you burn all your scrap stuff you will need to come up with firewood or the equivalent. While some people may view it as fun to go and cut and dry firewood, it requires quite a bit of equipment and time. You may also need to buy, license, and maintain a truck.
#4. some cities may not allow burning wood in buildings.
Increased insurance rates, the up front cost of the wood burning heater and the cost and trouble of finding fuel may make wood heat more expensive than other options. Plus it is grossly inconvenient.
You have to ask yourself, how much is it worth to you to simply say “Alexa, turn up the heat to 23” when you feel cold in your bed versus having to start a fire in your wood stove in the middle of the night.
Yup … you ain’t nobody until you are a “victim,” and announce it to the world. Everybody has to know about your “struggles.”
We don’t celebrate accomplishments anymore, we applaud weakness. Let’s see how well that guides society for the next few years.
It won’t be pretty.
Thank you for your rational, dispassionate insight. The rhetoric and spin of the past week has been deafening and disorientating. It is tempting for the newly initiated, like myself, to believe the competence of such “avaricious day traders” because of the arrogance and veracity that they hold regarding their assertions. Their strategy seems like a Pavlovian response coupled with a “bro culture” mentality of one-upmanship/ a commodified experience where screenshots of portfolios can be posted online instead of distilling prudent, patience, investing advice based on due diligence and long-term, substantiated gains. Many thanks!
I listened to old vedios of DFV, the guy from WSB. He invested in GME, beacuse he believed in the real value of the company, not a random gamble. However the moon rally originated from over shorting of GME, amd it got magnified with the cult.
Bravo Garth!!!
You nailed it – making money without working for it. It’s time to wake up for many people
#134 PM Punch in the Face”
Maybe this will suffice?
https://duckduckgo.com/?q=TRUDEAU+GETTING+PUNCHED+IN+THE+FACE&t=h_&iax=images&ia=images&iai=https%3A%2F%2Fwww.novanewsnow.com%2Fmedia%2Fphotologue%2Fphotos%2Fcache%2Ftrudeau-2701105_large.jpg
I love this blog. My daily ration of sanity and rational outlook on money. Hopefully this positivity counteracts some negativity down here.
My only diversity in the market are a couple of Vanguard ETF’S.
I’m more on the side of Buffett and Munger. I’m doing well swing trading last 20 years. Don’t think I’ll change that.
https://youtu.be/ibSp1xzLfy8