A behavioural perspective on…

RYAN   By Guest Blogger Ryan Lewenza
.

Getting tired of hearing about GameStop yet? No, ok, here’s some more red meat for you!

Today I’m going to review the GameStop madness but this time from a behavioural perspective, since what I’m seeing from these Reddit traders would make a behavioural finance professor roll over in their grave.

We all have behavioural biases that impact our emotions and in turn, our investment decisions. Behavioural finance is a growing field in the academic and investment world that studies these biases and how they impact our investment decision-making process. So today I’m going to review some of these biases that Reddit traders are exhibiting when investing in GameStop, so we can try to learn from these biases (and their mistakes) to be better investors ourselves.

The first obvious bias that jumps out is ‘overconfidence’. Overconfidence bias is the tendency of investors to overestimate their own skill, intellect or talent. This bias often manifests in excessive trading and risking taking, and ultimately, poor investment outcomes.

Are we seeing this from the Reddit traders? You bet!

Through the Reddit chatrooms they are pumping up GameStop, trying to induce more investors to pile in and drive the stock higher. There was no analysis of GameStop and how it was grossly undervalued. There was no consideration of the risk involved in buying a struggling company like GameStop. And there was surely little to no consideration of diversification or whether this stock made sense from a portfolio perspective. It was simply driven by more investors piling in, creating an unprecedented ‘short squeeze’, and on the hope that someone would pay a higher price in a few days (a greater fool).

To me this all screams overconfidence as these traders confuse their luck for skill (for the few winners that sold at the top), took incredible risks in buying this struggling company, all of which has led to a very poor investment outcome for most Reditt traders (GME is down 90% since its intraday peak of $483 on 1/28).

The second prominent bias is ‘pride and regret’. One of my behavioural finance books says it best, “People avoid actions that create regret and seek actions that cause pride. Regret is the emotional pain that comes with realizing that a previous decision turned out to be a bad one.

Pride is the emotional joy of realizing that a decision turned out well.” That is pretty insightful and accurately describes how many of us think about investing and realizing gains and losses.

I believe the GameStop traders are already feeling this regret as they begin to take realized losses and/or still mounting unrealized losses. I read one quote from a Reddit trader that said he didn’t care if he lost all his money, as he’s more interested in beating up the hedge fund guys. I think he’s saying this to make himself feel better about his big losses, likely having bought near the top, and now the reality that almost all of his investment is wiped out. He’s simply delaying recognizing his loss in order to avoid feeling regret over his poor investment decision.

So, ‘overconfidence’ helped to drive the stock from $20 to over $400 two weeks ago, but it is now ‘pride and regret’ that is prevalent as the stock craters 90% from its recent high.

Price Performance of GameStop

Source: Stockcharts.com, Turner Investments

The next bias that these Reddit traders are exhibiting is an extreme case of ‘herd mentality’, which is when investors blindly follow what other investors are doing. These investors fear missing out so they follow the ‘herd’ and all pile into the stock, in this case GameStop. The Reddit traders are not doing their own independent analysis, rather they are all just following the herd, hoping it will all work out and the stock will keep going up. This can work for a bit, but once the majority of investors who will be buy the stock are in, then there is no one left to buy and drive the stock further. Then, pop! The stock implodes, and we’re on to the next thing. Like a herd.

Lastly, I’m seeing a lot of ‘confirmation bias’ in the GameStop speculators, which is when we seek out information that confirms own pre-existing ideas and ignore contrary information. The Reddit traders are exhibiting this confirmation bias as they focus on the information/data that supports their thesis (the stock will go higher given the huge short position) while ignoring information that counters their pre-existing ideas (the bulk of shorts have covered the position and the stock is extremely overvalued). One important key to successful investing is to counter this bias by seeking out opinions and information that challenges our existing beliefs and be prepared to change our view if the information/outlook changes.

Emotions are a great thing, but when it comes to investing you really want to keep those in check. These behavioural biases that we all possess can stir emotions in us, and as I outlined today, can drive us to make poor investment decisions like selling after a big market drop, or buying GameStop in the $400s.

Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Vice President, Private Client Group, of Raymond James Ltd.

 

114 comments ↓

#1 Toronto vs. Jersey Shore on 02.13.21 at 9:49 am

$2M Toronto:
https://www.realtor.ca/real-estate/22815878/382-brooke-ave-toronto-bedford-park-nortown

$2M Jersey Shore
https://www.zillow.com/homedetails/14-Imbrie-Pl-Sea-Bright-NJ-07760/39366245_zpid/

…be sure to check out all the photos, all the way to the roof.

Now…choose!

#2 Lieutenant Commander Data on 02.13.21 at 9:51 am

Anyone see the news about Covid risk of death being 3.5 times of the flu?

https://globalnews.ca/news/7633055/covid-19-death-influenza/

#3 Cheese on 02.13.21 at 9:51 am

The same thing happened with TLRY/APHA recently. I had invested a few weeks ago, and missed the opportunity to sell at the peak of the bubble. I got greedy and it cost me an amount equivalent to 10% of my portfolio. Still made a significant profit, but I learned a valuable lesson. Take profits when you can, especially when there is hype, even if you miss out on more significant increases. If its too good to be true, it is.

I can feel Warren scowling at me, and will never quite forgive myself for letting greed guide an investing decision of that magnitude.

Its very difficult when you have very little, hope drives irrational decisions. Hope that ‘this might be my chance’ to not be poor.

#4 SCOOBY DOO on 02.13.21 at 9:55 am

This is all over blown, get over it and move on.

Wallsreetbetz and Reddit will never be able to pull this off again.

But the fact they were able to bring a few big hedge funds to their knees and alter the investment landscape forever will go down in the books.

https://www.marketwatch.com/story/after-gamestop-andrew-left-says-citron-will-no-longer-write-short-selling-reports-11611931285

https://youtu.be/PfMxIIdsxGU

#5 Wait There on 02.13.21 at 10:01 am

Thin line separates optimistic and overconfident.

#6 crowdedelevatorfartz on 02.13.21 at 10:12 am

Overconfidence then regret.

Its kinda like Vancouver drivers venturing out in 1 inch of snow and immediately smashing into something or someone.

Snowing this am……and its sticking…..
My prediction for the future?
Govt insurance ( ICBC = Cash Cow) rates…… goin up!

#7 uncle dave on 02.13.21 at 10:25 am

a https://www.realtor.ca/real-estate/22763444/189-coxwell-ave-toronto-woodbine-corridor
A beautiful shed for sale

#8 crowdedelevatorfartz on 02.13.21 at 10:25 am

@#2 Lt Cdr Data
“Anyone see the news about Covid risk of death being 3.5 times of the flu?”
*****

You’re an android.
You only have to worry about the next Stuxnet virus.

#9 STONKS! on 02.13.21 at 10:31 am

it’s a game of musical chairs. they are called STONKS!
guys getting in early manipulating the crowd make tons. the poor guys at the end get stuck holding the bag. it’s the same story over and over. no big deal. it will continue because people have become desperate. sad but true.

#10 Bezengy on 02.13.21 at 10:33 am

So if one has the perspective to realize that they can be a victim to their own personal biases, and I doubt many do, how can we avoid falling into the same trap next time? Your financial advisor probably has biases too, and even a large group of people can hold almost exactly the same biases as we’ve seen the Gamestop travesty, so getting multiple opinions might not work either. Not sure what the answer is but this “behavior economics” is worth spending some time on trying to understand why we make the decisions we do.

#11 MF on 02.13.21 at 10:42 am

#4 SCOOBY DOO on 02.13.21 at 9:55 am

“But the fact they were able to bring a few big hedge funds to their knees and alter the investment landscape forever will go down in the books.”

-Exactly. Very few of the Redditors actually believed that GME would continue to go up. The high of $483 on 1/28 was already mission accomplished to them.

End of story.

There are no lessons here about “investing” here. Greed perhaps, but greed is a fixture on all financial markets in some way or another.

GME is just another symptom of market sickness. We’ve all heard stories of our grandparents rushing to buy GIC and Canada Savings Bonds in the early 80’s at like 30% interest. Since 2008, the worldwide central bank surpression of interest rates has forced everyone (institution and individual alike) into more risky investments like stocks and real estate since money has to go somehwere. This is why everyone is leveraged with Canadian real estate and it’s in a bubble of epic proportion never seen before..probably visible from outer space, BTC is some joke price, the S and P 500 is at all time highs, and so on.

Obviously being balanced and diversified is the way to go for the average person and their best bet because it is a bit of a defensive play for protection during the next economic crisis, which is invevitable.

So, it’s not the next year or so with more QE and “stimulus” that anyone should be worried about, it’s further down the road when the stimulus is forced to end that will be the real test. What is the deleveraging plan? Where will the debt go? How will our portfolios fare? That is the question.

MF

#12 Doug in London on 02.13.21 at 10:55 am

I still don’t get it, piling money into something that’s already gone up a lot. I figure what you want is a stock or sector that’s getting about as much attention as the program of events for the 1964 Tillsonburg Fall Fair. That’s how you get stuff cheap.

#13 Sail Away on 02.13.21 at 10:57 am

#1 Toronto vs. Jersey Shore on 02.13.21 at 9:49 am

Re: $2M house

—————

Well, sure, the Jersey mansion is 100 times more opulent and in a great location, but at least in Toronto your salary would be much higher, right?

Right? Hey… wait a minute…

#14 Sail Away on 02.13.21 at 11:10 am

Money, schmoney- cash is a fiction, trading is a shell game.

Sure, play the game and accumulate, but never mistake it for reality, and don’t overlook actual tangible assets.

#15 TurnerNation on 02.13.21 at 11:10 am

This is the only chart you need this month. As oil goes the market goes.
https://finviz.com/futures_charts.ashx?t=CL&p=w1

………
What’s really going on in Kanada this weekend?
The latest Regional Economic Shutdowns: The Least Coast: NB, NFLD.
The country has not seen this kind of regional economic induced damage since…T1 and the NEP (before my time).

This all makes sense when you realize our so-called leaders no longer are working for us. Led by A.I. real-time sentiment tracking (aka the Comments sections in the newspaper articles) and economic data models the screws are being tightened. But for whose benefit?

Wow from 2008:

https://www.amazon.ca/Shock-Doctrine-Rise-Disaster-Capitalism/dp/0676978010/ref=sr_1_1
“”Klein tracks the forced imposition of economic privatization, rife with multinational corporate parasites, on areas and nations weakened by war, civil strife or natural disasters….pointing an alarmed finger at a global “corporatocracy” that combines the worst features of big business and small government…. Klein’s book incorporates an amount of due diligence, logical structure and statistical evidence that others lack….[P]persuasive…Provocative…. Required reading for anyone trying to pierce the complexities of globalization.””

…………..

Here come the Q1 checkpoints. Yep CV does this too. Life in a UN-controlled open air tax farm camp. Post-national, natch.
Did anyone here ever think we’d have virtual Berlin Walls? No wonder our leaders praise Cuba, China regimes and tactics. The signs were all there.

https://montreal.ctvnews.ca/quebec-small-town-mayors-call-for-police-checkpoints-to-limit-travel-during-spring-break-1.5305409

#16 Mattl on 02.13.21 at 11:13 am

Ryan – would love to see a post on Sportscards, I understand you are a collector.

It’s not just the reddit crowd blowing up equities, look at the 86 Jordan. PSA 10 from 50K to 750K in 6 months. Key cards doubling every week lately.

I think this media focus on Reddit and GME misses the broader point that everything is being juiced, speculators are in every asset class pumping things to the moon.

#17 DON on 02.13.21 at 11:22 am

On the island where we are not supposed to get snow…

If it wasn’t snowing it would be a heavy mist of rain. I’ll take the snow…powder really.

White Swan event for those who had plans today but a boom for the kids.

To the year of potential black swans.

#18 Lieutenant Commander Data on 02.13.21 at 11:25 am

#8 crowdedelevatorfartz on 02.13.21 at 10:25 am

You’re an android.
You only have to worry about the next Stuxnet virus.

010001001011101101101

I am an android. I can not experience feelings of anxiety or unease as I removed my emotion chip.

However, humans have feelings and data is now available to suggests humans potentially had a WARP-9 emotional over-reaction due to irrational fear of the inevitable. Data suggest that certainty of death in human species by age of 122 is 100%.

Humans also repeatedly failed to protect those most at risk, clearly illogical and criminal under Starfleet General Orders and Regulations

Bubble could easily be set up around NHL Arenas in Canada, but it appears it was impossible by politicians to do so around Long Term Care Homes, where 80% of Covid deaths occurred. As usual, I am left confused with human behaviour and incompetence.

#19 David Prokop on 02.13.21 at 11:33 am

Market has gone absolutely parabolic, especially small caps
PE ratios on Russell 2000 are in the 90s. As someone said, vertical markets don’t correct by going sideways, so you know when we get sharp drop like it happened several times before Fed will panic again and come up with more money printing. Stock market is the economy now, they will do anything to defend it. The money printing will never stop

#20 IHCTD9 on 02.13.21 at 11:39 am

#1 Toronto vs. Jersey Shore on 02.13.21 at 9:49 am
$2M Toronto:
https://www.realtor.ca/real-estate/22815878/382-brooke-ave-toronto-bedford-park-nortown

$2M Jersey Shore
https://www.zillow.com/homedetails/14-Imbrie-Pl-Sea-Bright-NJ-07760/39366245_zpid/

…be sure to check out all the photos, all the way to the roof.

Now…choose!
— —

I can’t decide! They’re so close!!

#21 MF on 02.13.21 at 11:43 am

#13 Sail Away on 02.13.21 at 10:57 am

You are right. The salaries of Americans in 2008 were able to stave off complete collapse of their housing market right?

..hey wait a minute…

MF

#22 willworkforpickles on 02.13.21 at 11:44 am

Are you experienced?…tell the hoodies, we don’t start out that way.

#23 crowdedelevatorfartz on 02.13.21 at 11:53 am

@#18 Lt Cdr Data
” I am left confused with human behaviour and incompetence.”

+++++

For further explanation, access “Justin Trudeau” in your data banks.

#24 willworkforpickles on 02.13.21 at 12:06 pm

#9 STONKS
“it’s a game of musical chairs. they are called STONKS!
guys getting in early manipulating the crowd make tons.”
……………………………………………………………………………………………………..

I posted this earlier…50 or more heavily shorted stocks had massive price spikes late in the month in January…only shortly thereafter to see massive drop backs to where the prices previously were.
Even many many of the ones who were thinking they were getting in early for a big short squeeze got burned.
Greed and stupidity came out to play on a much broader scale than most realize this past month.

#25 TurnerNation on 02.13.21 at 12:13 pm

#27 Calgary Rip Off on 02.12.21 at 3:13 pm
“That being said, it seems quite unlike any typical virus.”
“Much of Covid 19 seems cloaked in mystery, much like HIV. Is it true that Fauci was aware of research assigned to Wuhan to generate a more virulent coronavirus when he said in 2017 “A surprise is coming?””
“Scientists still have not identified why exactly some seemingly well patients survive quite well, while other patients that are elderly with comorbidities are asymptomatic.”

….
Calgary rip off but the vaccines have been developed. That work. It’s over. How can there be any mystery? This is science is it not – reproducable, replicatable on demand?
How can anything still not be identified? I mean, half assed products are not being rolled out are they?
Are you telling us the truth, or performing mental gymnastics? Are we being sold a false hope?
Tell us more.

#26 Faron on 02.13.21 at 12:14 pm

As usual, I’m a fan if your post today. Do you have any comments on how the derivatives market played into GME?

Here’s what I’ve gleaned.

The GME story has played out many times before and since the big event with similar outcomes. GME was different because of the short squeeze and hedge fund attack dynamic, but I think those only amplified an increasingly common gamma attack.

Retail traders have been granted the ability to trade options through RobinHood and that lets them swing way way above their weight in terms of moving the market by forcing the market makers to buy or sell the underlying en mass when hoodies gang up on buying calls. Once the name is exploding upward it draws in even less knowledgeable buyers of long stock who wind up being the bagholders.

I’m not sure how this ends because the dynamic is reenforcing. But, the market quake that came out of the GME forced degrossing was spooky. VIX had one of its largest one day gains ever. I think that’s why the SEC got involved. Some also argue that they forced the trading halts in retail to protect the overall market.

Anyhow, that is what I’ve gleaned.

#27 triplenet on 02.13.21 at 12:24 pm

Ryan,
So a collection of minnows went after a shorting shark. Yes, a very risky manoeuvre however when they were feeding on the short shark, the other sharks sensed blood in the water and joined in the ‘feeding’. The short shark was a hurting unit to the tune of 4 billion.
The minnows obviously got some of that but the big sharks took most of it.
All in all an unwise financial move for a little minnow – but a smart move for some well fed sharks.

#28 Roial1 on 02.13.21 at 12:37 pm

Oh BOY! Snow on V.I. I get to use my snow blower.
Haven’t used it for 6 years. (been out of the country every winter LOL) HAPPY COVID.

Oh ya, my investments in my balanced portfolio are still growing. YA HOO!

#29 wallflower on 02.13.21 at 12:54 pm

I think there is more technical context than being presented; a confluence of unique circumstances:
-many, many more robinhooder redditer types internet connected more of their daily routine than previously – disemployment (pandemic)
-lots of free money swooshing around (USA free money cheques; Canada CERB now CRB)
-whole new cadre of disemployed, internet-connected youth, with new accounts, bombarded with free-trade ads
-still no baseline education on investing versus gambling

#30 Q&A on 02.13.21 at 12:55 pm

I just want to make clear for some: when i had 5k in my account i wanted 100% per year which was only 5k. Once your portfolio is 300k you want 10% return which is 30k. Speculating is for young and impatiant people with small portfolios to waste. Investing and long term positioning is for serious investors.

#31 Lieutenant Commander Data on 02.13.21 at 12:59 pm

@#18 Lt Cdr Data
” I am left confused with human behaviour and incompetence.”

+++++

For further explanation, access “Justin Trudeau” in your data banks.

010001001011101101101

My positronic brain has several layers of shielding to protect me from illogical data input.

#32 Dolce Vita on 02.13.21 at 1:01 pm

Ryan you’re a smart guy and are trying to make sense of what happened with GME using conventional wisdom.

BUT and it is a BIG BUT

it was no just the Redditors in on this.

Black Rock and 8 other Wall Street firms jumped in after your 1st peak “Price Performance of GameStop” chart and made $16B in a few days.

Why I cannot wait to learn what Yellen does. Basically whom does she render harmless?

The egregied Hedge Fund people or the happy Black Rock people? Which parts of Wall Street does she side with?

To begin to understand go to this video, best take so far I have been able to find and begin watching at the 9:40 mark when the Short Squeeze is described.

Patience, it gets juicy by the 13:38 mark, enter Black Rock et al.

https://www.youtube.com/watch?v=YFQ-v1jCpF0

My point is your chart, admirable, does not summarize all the different groups and agendas in on GME:

1. Redditors, pump & dump.
2. Redditors, stick it to the man, revenge of the 99%, “Diamond Hands”.
3. Greedy Hedge Funds caught with their pant/panties down.
4. Competitor Hedge Funds throwing in with the Redditors to “stick it to the other man” a.k.a., their competitors (e.g., Melvin Capital).
5. RobinHood* revenue sources such as Hedge Funds (e.g., Citadel) trying to shut it all down since it cost them a couple of Billion in the end.

and they cannot be captured easily with a chart (e.g., NO REGRET from Black Rock, more like GLEE).

A lot more complicated than that. Still, good your are trying to understand what happened using conventional theory.

*Ya their RobinHood devotees, RobinHood sells your trading data to people like Citadel to the tune of US $700M per year.

No such thing as a free lunch.

#33 Sail Away on 02.13.21 at 1:03 pm

#21 MF on 02.13.21 at 11:43 am
#13 Sail Away on 02.13.21 at 10:57 am
#1 Toronto vs. Jersey Shore on 02.13.21 at 9:49 am

Re: $2M house

———–

Well, sure, the Jersey mansion is 100 times more opulent and in a great location, but at least in Toronto your salary would be much higher, right?

Right? Hey… wait a minute…

———–

You are right. The salaries of Americans in 2008 were able to stave off complete collapse of their housing market right?

..hey wait a minute…

———–

Haha- like a momma bear to the defense!

Great consistency. Accuracy not so great, but very, very consistent.

#34 Bert on 02.13.21 at 1:25 pm

What if the Nasdaq goes to 20000 by 2022? Are you overweight technology?

#35 Ryan Lewenza on 02.13.21 at 1:27 pm

Mattl “Ryan – would love to see a post on Sportscards, I understand you are a collector.”

That’s Doug that is the sportscards collector. He has his sportscords and I have my guitars. We all need a hobby! – Ryan L

#36 Bert on 02.13.21 at 1:28 pm

We could get a massive equity chase in the market. Fund flows have been starkly negative for equities since 2012. The only positive year of fund flows in the last 10 years was 2013 and part of 2014.

Bonds on the other hand continue to experience inflows even as yields have come off the lows.

#37 Dr V on 02.13.21 at 1:31 pm

Roial1 – yes, bike rides and bowflex replaced with….shovelling???

May you keep B & D……

#38 Figmund Sreud on 02.13.21 at 1:32 pm

Getting tired of hearing about GameStop yet? No, ok, here’s some more red meat for you!
____________________________________

Yes, … there is a story to tell in all of this. Many stories! There are many story tellers, too.

Anyway, … olden Aesop was a story teller (6th century, bc), … he held an angle on behavioural perspective. Yes! Specifically, on behavioural biases of men, … here is what is recorded he said:

“There are many statues of men slaying lions, but if only the lions were sculptors there might be quite a different set of statues.” ― Aesop

Anyway, … the true truth, just perhaps, is, … while you judge them – Reddit traders – through the outside perception, they doing the same to you, … your ilk. No?Yet, … yet there is an overwhelming chance that in both cases assumptions made are, … vastly inaccurate.

Best,

F.S. – Calgary, Alberta.

#39 Ryan Lewenza on 02.13.21 at 1:33 pm

Faron “As usual, I’m a fan if your post today. Do you have any comments on how the derivatives market played into GME?”

The options markets definitely played a big role in this rally. Many of the Reditt traders bought call options on GME. As they did this the option writers or sellers had to buy the underlying stock to hedge their call option positions. So more GME call buying, led to more GME stock buying, which led to more stock buying from the shorts and we now have an insane feedback loop. But as I predicted, it ended in tears for so many investors with the stock now down 90% from the peak. – Ryan L

#40 Don Guillermo on 02.13.21 at 2:07 pm

#35 Ryan Lewenza on 02.13.21 at 1:27 pm
Mattl “Ryan – would love to see a post on Sportscards, I understand you are a collector.”

That’s Doug that is the sportscards collector. He has his sportscords and I have my guitars. We all need a hobby! – Ryan L
*************************************
Got me excited for a second. Thought it read sportscars. Guitars are good as well.

#41 tkid on 02.13.21 at 2:13 pm

/r/wallstreetbets describes itself thusly: “Like 4chan found a bloomberg terminal.” That’s all you gotta know.

My O.o posts on the sub are the ones where they post these massive freakin’ losses (no lie) and are now horribly in debt. Like, I freak out when I gain/lose a month’s salary, but these dudes take losing a lifetime’s worth of money in stride.

#42 Stone on 02.13.21 at 2:20 pm

After reading today’s blog, I’m feeling a bit nervous about owning a balanced and diversified portfolio.

Bias #1 overconfidence – yes, i’m overconfident. B&D is where it’s at. Oh oh! Red flag there.

Bias #2 regret and pride – I regret I can’t buy more as I’m fully invested in my B&D and I love how it’s performing. Proud of my 6.29% YTD performance. Oh oh! Red flag #2.

Bias #3 herd mentality – lots of sheep out there buying ETFs and using robo-advisors who set up ETF portfolios. Oh oh! Red flag #3.

Bias #4 confirmation bias – I keep coming here to read from Garth and the gang that balanced and diversified is the way to go. I use this to reinforce that what I’ve done is the right thing to do. Oh oh #4!

Alright. Stay calm. Breath in a paper bag to stop hyperventilating. You know what you need to do. Login online. Set sell market orders for all your positions immediately. Ahhhh. I feel better. Monday at 9:30 am, I will sit 100% in cash. Phew. And then I’ll throw all my money into a mouldy slanty semi.

Thanks for saving me Ryan.

#43 SoggyShorts on 02.13.21 at 2:40 pm

#219 Steve on 02.12.21 at 5:00 am

If pcr tests work, why all the false positives?
If 6 feet works, why the masks?
If masks work, why the 6 feet?
If masks and 6ft work, why the lockdown?
If 99.5% of people with covid recover why the shutdowns, restrictions?
If the restrictions and shutdowns work, why vaccines?
If the vaccine works, why more than one? Why the masks and the 6 feet distance after vaccine?

************************
If speed limits work, why have brakes?
If brakes work, why have crumple zones?
If crumple zones work, why have seatbelts?
If seatbelts work, why have airbags?

Because they all work but none work perfectly.
Seriously man this it’s been a year and you’re still this ignorant? At this point it’s willful. You can’t possibly have not come across this explanation over the past 12 months unless your head was stuck somewhere dark on purpose.

#44 Odif on 02.13.21 at 2:45 pm

Ryan,

I’m sorry but your oversimplified statement is wrong, saying there was no due diligence done on GameStop. When the play was initially posted, Gamestop was trading well below $10, and there was solid evidence it was undervalued.

You can go to youtube and watch “roaring kitty” videos posted last year. He has a CFA and is a very competent analyst. Trying to say a bunch of kids piled up on a stock with no brains is very disingenuous.

What happened next I agree with you, the stock going to the stratosphere made no sense. The initial players who bought in when it was undervalued made money (even now with the stock at $50). Those who got greedy and jumped in at the insane valuations made a gross mistake.

#45 Diamond Dog on 02.13.21 at 2:46 pm

Hi Ryan, I quite enjoyed your post today concerning behavioral finance. Most certainly bias has a psychological role to play in investing and we really see this come out as retail investors jump into a frothy market such as this one.

It’s good to know the psychological bias terms that move the herd such as Dunning Kruger (overconfidence) and extrapolation bias (pride & regret) or herd mentality and confirmation bias. These bias’s and all others for that matter point to one common denominator, good old fashioned “inexperience”. There are lots of psychological terms to describe its forms, but for the most part that’s what it is.

Take herd mentality. Buy and sell on the trends, even inexperienced investors get buying on trends but where inexperienced investors go wrong is in not knowing the full range of orders they can place to protect themselves with trends like with the use of stop sells when you’ve gone long on a high volume stock has run up way past fundamentals as was the case with Game stop.

I should have taken some time myself to follow options trading on GME just for the experience on the calls and puts and the spreads in their intrinsic values, movement like that is where one wants to be and there will be more of them in a frothy market bubble like this one.

https://www.bing.com/search?form=MOZLBR&pc=MOZD&q=stop+order

#46 SoggyShorts on 02.13.21 at 2:53 pm

#30 Q&A on 02.13.21 at 12:55 pm
I just want to make clear for some: when i had 5k in my account i wanted 100% per year which was only 5k. Once your portfolio is 300k you want 10% return which is 30k. Speculating is for young and impatiant people with small portfolios to waste. Investing and long term positioning is for serious investors.
**********************
If you try to get 100% gains in one year you’re going to have a hard time getting up past that 5K mark. Reaching the 300K mark is… unlikely.

#47 Faron on 02.13.21 at 2:54 pm

#37 Dr V on 02.13.21 at 1:31 pm

Roial1 – yes, bike rides and bowflex replaced with….shovelling???

May you keep B & D

Already shovelled twice. Did mine and neighbours first round. Not se generous on round two.

Hopping on the skis in a bit. Could use a week of this. Sadly, will start washing out tomorrow then back to typical west coast rain. Long range models hint at a late Feb round II.

#48 Simon on 02.13.21 at 2:55 pm

same thing on this site, just people following people. A chart gets pulled out saying that the S&P went up from a certain date to now, so therefore it must go up more.

#49 Yuus bin Haad on 02.13.21 at 3:00 pm

so, don’t trade GameStop

#50 mark on 02.13.21 at 3:06 pm

There is a reason Buffet is holding 30% cash, prepare.

#51 Blair on 02.13.21 at 3:07 pm

I see articles in The Globe and mail and The Economist suggesting that the stock markets are “overheated”. Despite the optimism about growth as the pandemic recedes, is there any major concern about a significant fall in stock prices?

#52 Handsome Ned on 02.13.21 at 3:16 pm

Money for nothing and your chicks for free…that’s the way to do it. I was stupid, I made most of my money burning calories.

#53 Capuline on 02.13.21 at 3:21 pm

#14 sail
What tangible assets are you referring too? Are you suggesting buying real estate, land?

#54 IVoteIndependent on 02.13.21 at 3:34 pm

“what I’m seeing from these Reddit traders would make a behavioural finance professor roll over in their grave”

Ryan, are any of them still alive?

Or have they all died from banging their heads against a wall?

#55 ogdoad on 02.13.21 at 3:58 pm

Great post.

Behavioral finance, eh? That sounds GREAT!

lots of ‘biases’. I would venture to say that ‘herd mentality’ could exist in the same thread as ‘social proof’.

Where does ‘hope’ fit in?

I bought Nortel stock with OSAP loans. Hope that it would grow squashed the fear of losing my money…was my hope misplaced? Cultural surroundings gave me that hope.

Enjoy your weekend!

Og

#56 TrendIsYourFriend on 02.13.21 at 4:04 pm

Not just WSB, there are countless chat rooms, Telegram and Discord groups with their pump and dump schemes, Twitter private subscriptions, Stocktwits… you name it.
I heard in the old days there were newsletters and CDs with the next great secret system that will make you a millionaire..

Nothing has changed in terms of psychology, everything went online.

Van Tharp and Mark Douglas books are something that traders and investors must read, over and over till it sets in.

Yes, there are genuine, honest people out there with their trading (and education) services but so far I have been able to count less than 10. Thousands out there with fake accounts, paper trading millionaires .. My youtube adds full of them, Ragingbull poster boy of that scam.

Reddit is just another pump and dump content delivery vehicle. People have become lazy to learn, put in hard work with no guarantees of profits, we want to believe and pay for quick and easy guru alerts and let gurus take care of our P&L.

#57 BK on 02.13.21 at 4:05 pm

Sounds similar to the Vancouver housing market. Except for the drop part….

#58 TrendIsYourFriend on 02.13.21 at 4:13 pm

Then we have CNBC, Cramers of the world, experts and analysts that explain to sheep, every day every market move – market dropped because… market today up because.. as if they know why millions of participants did something on a particular day or week.

Turn that off people, we, retail investors and traders will be the last to hear the news to make our decisions… all fluff and noise. Trading of the news and someone’s expert opinions is a losing proposition. It’s the opinion and views of those that are able to move the price that matter.

#59 Sail Away on 02.13.21 at 4:58 pm

#53 Capuline on 02.13.21 at 3:21 pm
#14 sail

What tangible assets are you referring too? Are you suggesting buying real estate, land?

————

Everyone needs to figure out their own thing. Mine is undeveloped land in places I/we find very desirable, a company, office building with my own company as the anchor client… then the capacity to subsist if everything goes sideways: high-quality gear, secondary non-electric home heating/cooking source, equipment to gather food (let’s just say our urban deer are in trouble if the earthquake hits).

A little preppy, but all things we use regularly- and always acquired with an eye toward high quality, longevity and functionality.

Worst case scenario, we can always pack into the sailboat and… sail away… anywhere in the world.

#60 Penny Henny on 02.13.21 at 5:13 pm

#16 Mattl on 02.13.21 at 11:13 am
Ryan – would love to see a post on Sportscards, I understand you are a collector.

It’s not just the reddit crowd blowing up equities, look at the 86 Jordan. PSA 10 from 50K to 750K in 6 months. Key cards doubling every week lately.
////////////

Ryan have you read anything about ‘digital sports memories’?

https://pakman.com/here-comes-digital-sports-collectibles-b7c1c2f294cf

#61 MF on 02.13.21 at 5:25 pm

Sail Away on 02.13.21 at 1:03 pm

I don’t get it.

Did US salaries help prevent the US housing collapse or not?

MF

#62 To the moon ! on 02.13.21 at 5:38 pm

Agree for sure, we’ve all been there.

For GME, you have to wonder what some were thinking holding on or getting in after a meteoric rise. I mean they achieved their goal, they really stuck it to those hedge funds naked shorting. Kudo’s to them, I bet the big hedgies have altered their brazen strategies now which is much better for retail.

#63 Regjeg on 02.13.21 at 5:58 pm

Anybody know of a reliable cure for greed?

#64 Thought I had ... on 02.13.21 at 6:02 pm

heard it all … but … now I hear of a course (advertised on CKNW) that you can sign up for teaching you “how to win a bidding war.” Think the ad was right after the one about “the pocket lawyer.” Surely now I must have heard it all …

#65 dosouth on 02.13.21 at 6:23 pm

Really just “Sheeple” to the slaughter, nothing more, nothing less. You have put it in more polite terms though.

#66 willworkforpickles on 02.13.21 at 6:35 pm

#14 SA
“trading is a shell game.

Sure, play the game and accumulate, but never mistake it for reality,”
……………………………………………………………………………………………………….

Many pennies are virtually empty shells…what’s – real -about the existing few for non short sellers can be had in the swing trade between re-occurring points specific to the kind of plays i have talked about in previous posts.
I know you get it…(not quite sure if anyone else has) .

#67 Midnights on 02.13.21 at 6:45 pm

Lmbo…
https://www.armstrongeconomics.com/international-news/politics/senate-acquits-trump-as-expected/?utm_source=Newsletter&utm_medium=Email&utm_campaign=RSS

#68 MF on 02.13.21 at 6:47 pm

6 willworkforpickles on 02.13.21 at 6:35 pm

“ I know you get it…(not quite sure if anyone else has”

-We get it. Everyone here knows that taking stock picking advice from the internet is the sure way to wealth.

MF

#69 Nonplused on 02.13.21 at 6:57 pm

Speaking of things that can go to the moon overnight, did anyone else catch this one?:

https://www.zerohedge.com/markets/power-bills-moon-chaos-shock-electricity-prices-across-us-explode

This ties in nicely with our ongoing discussions of all things energy and why we won’t be carbon neutral by 2035. This happened with all of our fossil fuel plants online, as well as all current wind, solar and hydro. All it took was a mid-February cold snap (I thought we weren’t suppose to have those anymore).

Mid-February is a terrible time for a cold snap, especially one this wide ranging, because natural gas storage inventories are much lower than they were at the beginning of the season. Most natural gas storage in done in depleted reservoirs, which means as they empty not only is there less gas in there but the rate at which you can withdraw it on a daily basis also drops.

Not only is this natural gas required to heat many homes, but it generates a lot of electricity, especially when it is cold.

I’ve worked in the energy industry most of my life and I have seen this happen at least 4 times before, but it is usually regional. This is the first one I’ve seen that is so widespread.

One thing I will say for sure is that anybody who did put solar on the roof, it’s paying for itself this weekend. But you are still going to be shocked by your power and gas bills for February. There is no way most people generated enough solar to be a net supplier on a 24 hour basis.

And therein lays the renewable conundrum. Just when you need the power the most, it quits generating. The sun doesn’t shine at night, and the wind cannot be relied upon to blow just because it’s cold outside. Some sort of massive electric storage is needed to bridge the gap, and then the renewable grid has to be over built such that it can not only power all demand but also charge the batteries with extra power for use at night. And I don’t know that I can envision the amount of batteries and extra solar and wind that would be required to balance the summer/winter loads. Operators spend all summer filling their storage facilities up with gas and building huge mountains of coal outside their power plants for winter use.

There is an art and a science to forecasting potential demand. I know, because I used to do it for a living. Give presentations at conferences and stuff. Most people don’t think about it but there is a reason, well two, that your power and gas bills are always higher in the winter. The first is that you are using more, demand is extremely temperature dependent with a 90-95% correlation in the residential and commercial markets, but also in addition to your use going up the price you pay per unit also goes up. (The industrial demand is pretty consistent all year.)

So, if you haven’t got one of those fancy thermostats that turns the heat down at night, tomorrow might be a good day to go get one. Or call your favourite HVAC company.

So, GameStop, eat your heart out. Your puny little 20 times move is small potatoes. This probably wasn’t even a short squeeze. Unless you count having less gas and coal in storage this time of year as being short.

But, sooner or later all cold snaps end as do all short squeezes. By late summer things should be back to normal.

Hopefully the cold weather killed those damn murder hornets, but other than that 2021 isn’t off to a great start.

#70 willworkforpickles on 02.13.21 at 6:59 pm

#62 ttm!

Who really stuck it to who?
Shorts covering at a loss stuck it to the hoodies from the top back down likely doubling their money or better in the overall process.
Hoodies sticking it to the shorts sticking it to the hoodies.
(too funny).

#71 cowtown cowboy on 02.13.21 at 7:00 pm

#12 Doug in London on 02.13.21 at 10:55 am

I still don’t get it, piling money into something that’s already gone up a lot. I figure what you want is a stock or sector that’s getting about as much attention as the program of events for the 1964 Tillsonburg Fall Fair. That’s how you get stuff cheap.

Tillsonburg??? Well my back still aches when I hear that word….

#72 Sail Away on 02.13.21 at 7:01 pm

#61 MF on 02.13.21 at 5:25 pm
Sail Away on 02.13.21 at 1:03 pm

————

I don’t get it

————

Correct

#73 Don Guillermo on 02.13.21 at 7:12 pm

#63 Regjeg on 02.13.21 at 5:58 pm
Anybody know of a reliable cure for greed?
**********************************
Death?

#74 Nonplused on 02.13.21 at 7:21 pm

#39 Ryan Lewenza on 02.13.21 at 1:33 pm
Faron “As usual, I’m a fan if your post today. Do you have any comments on how the derivatives market played into GME?”

The options markets definitely played a big role in this rally. Many of the Reditt traders bought call options on GME. As they did this the option writers or sellers had to buy the underlying stock to hedge their call option positions. So more GME call buying, led to more GME stock buying, which led to more stock buying from the shorts and we now have an insane feedback loop. But as I predicted, it ended in tears for so many investors with the stock now down 90% from the peak. – Ryan L

———————————-

Not all option traders “delta hedge” using the underlying. Instead they employ a strategy called “put-call equivalency”. So basically what they do is if they find their delta has gotten too big on a bunch of call options they sold so they are supposed to buy the underlying, oh contraire! They sell puts which means they are suppose to be short the underlying. Thus the theory goes if you have sold enough both puts and calls the remaining delta is pretty minimal. Risky, I know, the book is bound to blow up eventually, but it fools the risk management system every time. From the trader’s perspective it matters not if the book blows up eventually, as long as he gets his 30% for as many years as possible.

#75 Ed on 02.13.21 at 7:29 pm

Its hard to just sail away these days…Polynesia just closed their borders again, Fiji closed, Kiribati closed.

Not even going to mention NZ or Oz.

#76 Ustabe on 02.13.21 at 7:37 pm

I do not post links very often. Those who click through are rewarded more often than not tho…

https://www.macleans.ca/longforms/jason-kenney-alberta/

Today’s Tip: you do not want to eat the meat from an urban deer. Just like a duck taken from a salt water marsh tastes like crap so also the rats on stilts that consume tulips, lawn clippings and cedar hedges.

#77 S.Bby on 02.13.21 at 8:09 pm

Great post Ryan, but the point of GameStop was to stick it to “the man” not to make any real money on it. Any profits were just gravy.

#78 Phylis on 02.13.21 at 8:30 pm

#69 Nonplused on 02.13.21 at 6:57 pm Here ya go, you should luv this one.

https://www.driving.ca/tesla/features/feature-story/motor-mouth-too-many-teslas

#79 SCOOBY DOO on 02.13.21 at 8:54 pm

#63 Regjeg on 02.13.21 at 5:58 pm
Anybody know of a reliable cure for greed?
—————————————————

YUP – More Greed!!!

#80 westcdn on 02.13.21 at 9:06 pm

I see the price of trading sports cards is soaring. Congrats, Doug. I can’t explain except to observe that people like to own things no one else does. Think diamonds, ocean view, show things, bitcoin, Tesla… It seems to be part of human psyche.

I avoid professional/experts who have beaver pelts (plaques/books) on their walls. I can live without them but it makes my life more difficult – cost/benefit. I enjoy arguing – prove your point. The challenge invocates me to find solutions, particularly when I am wrong.

I remember a guy in “Buffy, the vampire slayer” who after another failure said “all bow before the king of geeks”. He did not give up.

#81 Nonplused on 02.13.21 at 9:32 pm

#78 Phylis on 02.13.21 at 8:30 pm
#69 Nonplused on 02.13.21 at 6:57 pm Here ya go, you should luv this one.

https://www.driving.ca/tesla/features/feature-story/motor-mouth-too-many-teslas

————————————-

Yup. Accountants don’t make good engineers because they always revert to “averages”. Reminds me of the accountant that drowned in a river that was only 6 inches deep on average. Engineers tend to plan for “peak load”, even though the accountants say they are spending way too much money “on average”.

Pretty much everything an engineer touches, whether it be a power grid or a bridge, is designed for peak load, not average. You don’t want your bridge crashing into the river just because two 18 wheelers happened to be on it at the same time.

Politicians, on the other hand, couldn’t care less about peak or average load, only “policies”.

#82 Doug t on 02.13.21 at 9:38 pm

Us Boomers are dinosaurs and becoming extinct- the kids are gonna kick our sorry a**es to the curb and create the new way forward – it’s gonna be awkward and stumble, but it’s definitely coming – things change – systems change – they have to – it’s a natural cycle

#83 Diharv on 02.13.21 at 9:49 pm

#2 Lieutenant Commander Data on 02.13.21 at 9:51 am
Anyone see the news about Covid risk of death being 3.5 times of the flu?

https://globalnews.ca/news/7633055/covid-19-death-influenza/
Well Duh!!! Everyone has know the mortality of this thing is higher than the flu for almost a year now. Where have you been?

#84 willworkforpickles on 02.13.21 at 9:58 pm

#68 MF
“Everyone here knows that taking stock picking advice from the internet is the sure way to wealth.”
…………………………………………………………………………………………………….

Sorry about your loss/’s.

#85 Wrk.dover on 02.13.21 at 10:09 pm

#131 Gravy Train on 02.13.21 at 7:01 am
#102 Wrk.dover on 02.12.21 at 8:52 pm
“[…] Although I live rurally remote, we […] have a solar roof array producing the exact number of [kWh] we consume […]” How many solar panels are you using? And how many watts per panel? Did you get a rebate or subsidy? What’s your payback and how long are they guaranteed? Do you think we’re getting through to anyone? :P

+++++++++++++++++++++++++++++++++++

Answers in reverse:
1)Not at all. They prefer to own #’s on a screen
2)No idea, never claimed on a warrantee in my life
3)13 years, originally, rate up now already, so less than
4/ early 2020 fed $-NS program $0.7/W covers tax and labour exactly with local solar boy.
5)400W
6)I already had 6.5 year payed back solar hot water asset, going into a pre-tank, feeding the timed electric tank maintaining tank 6mos/yr, dumping the excess and the 6 mos negligible winter production into the basement in-floor hydronic, (basement floor does not sweat in summer) so I only need a dozen panels. NS Power doesn’t want my production to blow over annual consumption, so I am limited.
7) bottom line; each 400w panel did pay $77/yr at $1000 investment. Already increased.
8) translation pay your power bill 13 years in advance at last months rate, last power bill I’ll ever pay at 67
9)drop mike, because tangible asset, I Win! (most stuff)
10) insert plug for Bulleit Bourban, neat….and done.
PS) I don’t expect equipment to deflate in price, Enphase stock has gone exponential, shoulda bought that instead of the product, but nah, never another power bill in my life, I’m good, I have enough #’s on a screen anyway.

#86 Wrk.dover on 02.13.21 at 10:27 pm

Nonplused:

Thanks for the reply. Plastic blinds or heavy curtains to work with double pane, triple pane will out perform it’s own sash system, so it fails in the end.

I know of a $40k private turbine that was a fail, replaced with a $60k turbine that worked a month.

Donate your mini turbine to Sail Away to stand on the aft rail for battery maintenance when he swings his grand yacht from the hook. I doubt Farron has power on his class glass racing sloop.

#87 MF on 02.13.21 at 11:29 pm

4 willworkforpickles on 02.13.21 at 9:58 pm

Yeah I don’t think that’s how gambling works. The stock market is nothing but a casino. Period. Every stock has pretty much a 50/50 chance of going up or down, and this is notwithstanding the overt or covert manipulation that occurs.

Stock picking is like any other form of gambling. All wins are amplified and losses are kept quiet. And when a gambler wins, all proceeds are just put back into the market and inevitably lost.

Every newbie has listened to a stock picking tip and been burned. Lessons learned. So yeah, it’s no wonder why anyone who has learned anything should be wary of using the internet for gambling advice.

So there is no need to be sorry. Human psychology has developed over eons. Just ask the millions of degenerate gamblers who have ruined their lives over greed and psychological weakness.

MF

#88 S.Bby on 02.13.21 at 11:37 pm

Scores of Canadians have ditched the city. Will the office claim them back?

https://globalnews.ca/news/7637347/work-from-home-moving-away-from-the-city/

But when Chen, a real estate agent who previously worked as a financial analyst, started analyzing market data from April and May, she says she realized activity was quickly picking up pace.

“We have to move now,” she thought.

FOMO.

Chen said she decided to choose to her new Aurora neighborhood in part because she believes the local housing market has strong appreciation potential, which will benefit both her family’s net worth and her real estate business.

GREED.

#89 Nonplused on 02.14.21 at 12:00 am

To further my last point here is a business meeting:

Engineer: “Peak demand will be 100 Megawatt hours so that is what we should build to.”

Accountant: “But on average demand is only 30 Megawatt hours so that is what we should budget.”

Lawyer: “We need to get our customers to indemnify us for any shortfalls.”

Politician: “The kids like solar panels so let’s give them a subsidy.”

Green Advocate: “Don’t eat meat or drive a car. Hey can I borrow your charger? My phone is dead.”

#90 fishman on 02.14.21 at 12:32 am

Ed, no need to sail across the Pacific. Theres 15,800 miles of coastline in B.C. The whole coast was populated post WW1 up till the late 50’s. Been depopulating ever since, same as Newfoundland. There’s enough territory north of Cape Caution to keep you going for years. The only visitors a few fishermen coming in for a storm or the summertime recboater. No cops. The odd native in their aluminum skiffs checking you out on their infrequent passes through tribal territory. If you get tired of the isolation & the dreary, depressing, broken, coastal forgotten towns & their broke citizens head up to Alaska. Its like going from Communist Bulgaria into West Germany circa 1972. Good cure for any “lil potato” inspired Cognitive Dissonance you might have caught in Canucklestan.

#91 Faron on 02.14.21 at 12:58 am

#74 Nonplused on 02.13.21 at 7:21 pm

#39 Ryan Lewenza on 02.13.21 at 1:33 pm
Faron “As usual, I’m a fan if your post today. Do you have any comments on how the derivatives market played into GME?”

———————————-

the book is bound to blow up eventually, but it fools the risk management system every time.

I don’t think you are correct. I’m talking about options market makers who supply the bulk of puts and calls that are bought. First is the extremely high risk nature of selling options, that being a risk of near infinite loss especially when names explode. Options dealers make their money by collecting premium for selling options. They have zero interest in being exposed to the risk of the underlying rising or falling. Zero. It would be bad business. If they were out there using options as a hedge, it would be a different financial outfit or department.

So, can they hedge by selling puts as they sell calls? No, not at all. If the underlying is moving upwards then delta will be changing rapidly with the underlying price for the calls while changing very slowly with the underlying price for the puts. This is the nature of convexity. Because of this they would need to sell many more puts than they sell options in order to be hedged. Eventually, the premium for their put sales couldn’t begin to be enough to offset the changes in the underlying as the calls become in the money. Their attempt at put selling would need demand and demand for puts tends to evaporate when stock starts to run as the crowd gets blind to the possible downside. They would have no buyers.

Consider game stop. Say in November, 2020 a dealer sold calls with the Jan 29 expiration at a strike of 20 bucks. Say they collect a dollar of premium for each share in a contract. When game stop hit $480, they would find themselves down $459 per share which is 45,900% loss. If they had sold 50,000 contracts (netting 5 million in premium), they are in the hole $2.3 Billion. There’s no way in hell they could sell enough puts to cover that loss.

Another simple reason they would buy shares in the underlying is because they are selling calls meaning that the buyer has the right to purchase those shares, so a fist full of puts sold wouldn’t do them a damn bit of good.

Obviously, this is more complex given the multidimensional space of options with expiration, cal vs put, and strike and all of it responding to the volatility of the underlying.

And your idea that the asset manager will try to spoof the risk models is a quick way to get fired if the firm has any real regard for risk management. Maybe at the trading desk of one of the oil companies this would be okay and might earn you a seat at the stampede breakfast, but in real finance, no way in hell.

Anyhow, as usual, I think you pontificate a good and wordy game, but you have no actual idea what you are talking about. Sorry to pick on you.

#92 Faron on 02.14.21 at 1:00 am

#131 Gravy Train on 02.13.21 at 7:01 am
#102 Wrk.dover on 02.12.21 at 8:52 pm

Do you think we’re getting through to anyone? :P

I’m in, but you already knew that :-)

#93 Bdwy on 02.14.21 at 2:42 am

Sail away do you know an engineer named charles ramos in nanaimo? Just wondering if he is still working over there. He used to sail with me on round the island races. Confident dude, slighy balding, but very serious guy.

#94 KLNR on 02.14.21 at 8:54 am

@#76 Ustabe on 02.13.21 at 7:37 pm
I do not post links very often. Those who click through are rewarded more often than not tho…

https://www.macleans.ca/longforms/jason-kenney-alberta/

Today’s Tip: you do not want to eat the meat from an urban deer. Just like a duck taken from a salt water marsh tastes like crap so also the rats on stilts that consume tulips, lawn clippings and cedar hedges.

What a disaster Kenny has been.
Not sure there’s anybody more tone deaf than that guy right now.

#95 willworkforpickles on 02.14.21 at 9:45 am

# 87 MF
You are preaching to the choir now. I have stressed the point of avoiding the sheer mountains of garbage penny stocks out there… largely shells in waiting to burn your a$$, and cover that point nearly evert time i post regarding stocks.

#96 NoName on 02.14.21 at 9:48 am

#89 Nonplused on 02.14.21 at 12:00 am
To further my last point here is a business meeting:

Engineer: “Peak demand will be 100 Megawatt hours so that is what we should build to.”

Accountant: “But on average demand is only 30 Megawatt hours so that is what we should budget.”

Lawyer: “We need to get our customers to indemnify us for any shortfalls.”

Politician: “The kids like solar panels so let’s give them a subsidy.”

Green Advocate: “Don’t eat meat or drive a car. Hey can I borrow your charger? My phone is dead.”

So true, how process works.

This one time I got ahead of my self and decided to bring some sanity to this insane place i was at, so I made small presentation to convince my overlords to let me do what I really wanted to do make it easier
on my self to fix stuff.

So i follow instrictions, made a small plan and show those 4 pics to pre warn overlords what will happened if to many people have input in what i am about to do…

Yes i know there is spieling mistake, it was placed there so i can measure engagment, to make sure that i wasn’t only one paying attention, and there were funnier one tucked in for just in case.

https://imgur.com/a/3ZXUtlf

#97 Stone on 02.14.21 at 9:48 am

#63 Regjeg on 02.13.21 at 5:58 pm
Anybody know of a reliable cure for greed?

———

Dignity.

#98 Ryan Lewenza on 02.14.21 at 9:54 am

S.Bby “Great post Ryan, but the point of GameStop was to stick it to “the man” not to make any real money on it. Any profits were just gravy.”

I think it was the exact opposite. This is a pump and dump scheme to make $$. The cherry on top was taking down some hedge funds. Who would risk losing almost all their money to just make some point and possibly hurt a few hedge fund managers? Also why are these same traders now trying to drive silver prices higher? This is pure and simple greed IMO. – Ryan L

#99 Dan in Nanaimo on 02.14.21 at 9:54 am

We are irrational creatures by design and evolution and the “market” is us – an extension of irrationality. And as life is fleeting – most of us want to get as much as we can as quickly as we can. Nobody enters a contract expecting to lose but that’s how it works unless you are with the men making and controlling the market. The wsb crowd got played like the out of tune ensemble they are. Caveat emptor.

#100 Dharma Bum on 02.14.21 at 10:28 am

A lot of technical gibberish being bandied about today.

I’M SO CONFUSED!

https://www.youtube.com/watch?v=qnVrjFSE1hA

#101 Sail Away on 02.14.21 at 10:35 am

#93 Bdwy on 02.14.21 at 2:42 am

Sail away do you know an engineer named charles ramos in nanaimo? Just wondering if he is still working over there. He used to sail with me on round the island races. Confident dude, slighy balding, but very serious guy.

———-

Cool dude. Competent, confident and handsome. I think he bird hunts.

#102 LP on 02.14.21 at 10:41 am

#63 Regjeg on 02.13.21 at 5:58 pm
Anybody know of a reliable cure for greed?
***********************

maybe blindness

#103 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 02.14.21 at 10:55 am

What a completely uninspired non-performance by the Make Believes last night. 2-1 losers of a game marked by typical GTA comatose lethargy for anything except flipping glass-walled condos.

Even though 2021 in the NHL will forever be considered a Fake season of no import, at least Montreal – a team that has won championships in at least your parents’ lifetime – showed what it means to be diligent and victorious.

Toronthole Make Believes = the GameStop of sports.

#104 crowdedelevatorfartz on 02.14.21 at 11:16 am

@#63 regjed
“Anybody know of a reliable cure for greed?
++++++

Eventually realizing that having more money than Midas doesn’t buy happiness

Look at Bill Gates, Warren Buffet, etc.

They’re giving away billions and plan on giving it all away to charities when they die….

#105 willworkforpickles on 02.14.21 at 11:35 am

# 87 MF
You are preaching to the choir now. I have stressed the point of avoiding the sheer mountains of garbage penny stocks out there… largely shells in waiting to burn your a$$, and covered that point nearly every time i post regarding stocks.
I have been posting about a working method that has made me money consistently for the past few years. Explained it in some detail the last week and a number of times over the last year.
A method that does not and cannot apply to most stocks or work as I’ve described but with only a very specific select few.
I assume you have not read them or do not have a great deal of experience trading stocks but enough to have gotten burned trading some among the multitude of dead end listed public companies unscrupulously being touted by unsavory promoters regularly/daily.

I have to admit…I didn’t pull the trigger and sell in the last half of 2020 or recently as i should have.
Sticking to the formulae as i have laid out in previous posts would have made me money the last 2 qtr’s of 2020 if i had nonetheless…Just as i had each of the 4 qtr’s prior to those. (2020 was a messed up year…wasn’t at my computer monitoring the stock closely but should have been).
No worries…I will as i consistently have again and again with this (highly specific kind of play i have detailed previously) unload at the very next quarterly top…not a speculation but a time honored almost virtual guarantee it will come back higher than the current share price.
30 plus years of trading experience, I can’t help but laugh at the inexperienced fools who insist guaranteed consecutive gains from one quarterly ER though the next are not possible with a penny stock.
I posted the company name and stock symbol of one of those few but specific hits here a couple of times in the past year…met with contempt and disdain… so i won’t name the company again…(its there in the 2020 archives) My intention for posting about it was to help posters and readers here who endlessly seek answers for ways to build wealth.
I first posted details of the stock when it was 0.47 cents CAD…shortly thereafter it hit 0.82 cents. I explained the urgency to sell at peak just before the next ER release as it is was and likely always will be an orchestrated short target. Next up, I advised jumping in around the short bottom low 0.30’s…It bottomed at 0.29 cents then recently rose to peak at 0.96 cents before falling back under 80 cents.
Last time i posted a buy here for this stock, was met with contempt, disdain and a – what is this, a stock pick message board now type response…really (I could care less), but so as not to rattle the sensitive feelings of a few i will not post any more stock symbols here.
There is nonetheless a way to break through the mental block developed from being burned in the stock market that many unfortunate souls carry with them.
I have at the very least in my previous posts…explained a way.

#106 S.Bby on 02.14.21 at 11:38 am

#98 Ryan Lewenza

Maybe both reasons. There were the idealists and those other ones who saw it as a money making opportunity.

#107 Bert on 02.14.21 at 11:52 am

Hi Ryan,

What is your view re more companies putting bitcoin on their balance sheets? There is talk that pension funds and institutions may begin to take a small position in bitcoin collectively.

Some argue that this could push the price over $500K.

#108 Russ on 02.14.21 at 11:56 am

Bdwy on 02.14.21 at 2:42 am

Sail away do you know an engineer named charles ramos in nanaimo? Just wondering if he is still working over there. He used to sail with me on round the island races. Confident dude, slighy balding, but very serious guy.
================

Not sure about the guy, there are a lot of characters that sail outta Nanaimo.

What’s the name of the boat he was on most of the time?

Cheers, R

#109 IHCTD9 on 02.14.21 at 12:45 pm

#78 Phylis on 02.13.21 at 8:30 pm
#69 Nonplused on 02.13.21 at 6:57 pm Here ya go, you should luv this one.

https://www.driving.ca/tesla/features/feature-story/motor-mouth-too-many-teslas
— ——

This article makes all the right points. A subtle one, was the mention that Ionity initially offered a full recharge for 12.00 (CAD), no matter how big the battery was. Today they are charging 1.22 (CAD) per kilowatt-hour. That’s about 60.00 (CAD) to charge a model 3 (standard battery) which will get you about 400 km of driving. Ms. IH’s Mazda three will go 500 km on 50.00 worth of fuel, and it gets pretty bad gas mileage compared to many other small ICE cars.

Same thing happened when we bought a pellet stove for home heating. It was cheap heat back then. Now the pellets cost double, the exact same stove is almost 150% more, and the cheap heat marketing has turned into save the planet/luxury/ambiance.

Residents of Ontario will recall what happened to our hydro rates when McGuinty and Wynne decided to “open” the market. 10 years later, hydro in Ontario was so expensive that Wynne had to subsidize it via a public Corp or risk losing the next election (she did anyway). We still pay a subsidized rate today.

There’s a lot to like about EV’s, but I will bet my bottom dollar, that if the grid here in Ontario gets even the slightest bit stressed, the costs will skyrocket. We’ve seen it happen before, we’ve watched Ontario Hydro go bankrupt and then paid off their debt on top, now we face the same thing again as soon as the subsidy ends. Hydro here costs MUCH, MUCH more than we’re actually paying for it, and that’s before any new EV charging demand has OPG firing up all those expensive NG fuelled peaker plants trying to keep up.

#110 the Jaguar on 02.14.21 at 12:45 pm

@#101 Sail Away on 02.14.21 at 10:35 am++

It was too irresistible, wasn’t it?

#111 Sail Away on 02.14.21 at 12:59 pm

#110 the Jaguar on 02.14.21 at 12:45 pm
@#101 Sail Away on 02.14.21 at 10:35 am++

It was too irresistible, wasn’t it?

———–

Haha. Apparently his LinkedIn is blowing up.

#112 capuline on 02.15.21 at 12:12 am

Here in BC RV’s, ATV’s, sidebysides, boats all record sales for the past year and continuing. Pretty sure these people aren’t switching to EV’s. Try buying a used F-350 diesel, hot commodity! Oil isn’t going away that fast. Maybe oil stocks and ETF’s like xeg, zeo are a buy?Not sure but Eric Nuttall thinks there could be an upside. Thoughts?

#113 Jason on 02.16.21 at 10:21 am

Hi Ryan, hope I’m not too late.

What did the best case scenario look like for the short squeeze that was happening? Does $GME go to $1000? For how long? I can comprehend that it was going on as long as the price for $GME increased but what does the endgame or even a graph look like if a ‘best case scenario’ happened?

#114 Adam on 02.16.21 at 11:32 pm

WSB had the shorters by the balls – make no mistake, as they eroded more than $4B out of Melvin Capital and as much as $70b from the industry as a whole.

It came to a halt because Robinhood and other platforms crippled the buy side at a critical juncture. They cited liquidity issues (which were resolved within hours) while making the clear choice to sell their users down the river.

Also at play was a comical media blitz stating ‘WSB has switched to silver!” when no such sentiment existed at all. It was ginned up to deter further retail investors from piling into GME that fateful day. Look up “Jim Cramer foment 2006” if you have any doubt this is an actual hedge fund practice.

We should feel somewhat bad for the bagholders who lost out on some enormous paper gains, but anyone involved knew going in that this was a terribly risky game.

There will probably be some regulatory steps taken as a result, and the class actions should generate a few bucks for the lawyers.

Very educational to watch!