I wanted to explain a bit of my recent thinking. Underneath the irrelevant posts, there is something relevant going on.

People dismiss the wallstreetbets people out of hand because of the clownish lingo and the perception of being dumb money.

But hidden within the memes and rocket emoticons, there is truth. It took me a while to understand and believe, but I think the short squeeze is real. The math and reasoning behind it is sound. It is working.

My recent posts have been leaning on the irrelevant side, but I wanted to let you guys know I’m not as stupid or speculative as I sound. I have a degree in Finance and Economics from a respectable school, know how to read a balance sheet, and I regard myself as a fairly sophisticated investor. I read just as much Financial Times and Bloomberg as I do wallstreetbets. It’s not a noob here throwing his lunch money for a lark.

My line of thinking of this. What’s happening with Gamestop is similar to what went on with Tesla. Hedge funds shorted the stock, media bashed Elon, and people thought putting money in Tesla was gambling. It was pretty relentless. But they were all completely wrong.

The majority of people are plain stupid when it comes to money. When they thrash something, I tend to take a closer look. And I think they are wrong again on Gamestop.

To be frank, the people on reddit have made me more money than all my relationship managers put together. By a wide margin. I trust them more than I trust the “professionals”.

What’s going on with Gamestop is not purely greed and speculation driven by mob mania. There is strategy behind the short squeeze. It is a simple strategy for all the world to see, but the simplest strategies are quite often the most effective.

Even more powerful, there is spite backing it up. People are angry with hedge funds, and rightfully so. They see eating a loss as glorious. It is dangerous to underestimate such determination, and to think they are driven by greed and stupidity.

Still, the outcome is uncertain. But I like being a contrarian and making audacious bets. I would rather die gloriously than live fearfully.

I’m resisting selling Gamestop and AMC for a quick buck. Tesla took a few years to play out to reach the levels it has today. The hedge funds have not let up on their shorting of Gamestop, and short interest has barely budged. My sense is that the short squeeze has not even started. It will take days and weeks to play out.

To be honest, not selling is difficult. Doing nothing is not easy. There will be huge volatility. My portfolio is seeing the wildest swings it has ever seen. There will be days that I regret holding, or tempted to sell to lock in the gains. I might not want to look at my portfolio at all.

It’s also a reputational risk of looking really stupid by writing this now. Perhaps I should be like most “investment experts”, and just post after I make money? Or at the end of the year and consolidate the gains and losses? But that doesn’t feel authentic to me. I guess I will only know with experience.

But I remind myself that there are sound reasons why I’m holding.

And money from the hedge funds will taste especially delicious.

6 thoughts on “[Premium] We are not as dumb as we sound (really)

  1. Hi, likewise for the 50% realized 2021 gains that I’ve put back into GME (and some into AMC) as I believe in the GME story and not purely for the sake of just short squeeze. Gaming like EV cars are rather straightforward businesses that can be understood by the average Joes and really, the behavior of the stock brokerages is disgusting and I’m in any case ready to lose this 50%. And most importantly, to support the small people movement. All revolutions started from small movements also right? 🙂

    Cheers

    1. Same. Using my profits from listening to those autists, and plowing it back. Doing my part by taking 120 shares off the market lol. Cheers

    1. Yeah.. there is a lot of good analysis and wisdom there if you look beyond the memes. Many people can’t see that. But don’t think its possible the SEC can shut them down though. Nothing wrong with telling people your analysis and asking them to buy/sell. Hedge funds go on CNBC and do that all the time. I think the most likely outcome is that they ban shorting past 100% of the share float.

  2. Actually with Ryan Cohen in, GME should do better eventually. In fact, organically. Other than that, I think the price pre-cohen should be around 20+. But we will never know because it has gone off the rails. This whole thing exposes something that has been brewing. Like how things blew up, and then you see people voting for Trump. Then years later, people voting against/also for Trump. The investors of today are not stupid, but stupidity still exists. I’d seen some people finding or figuring out ways to get more margin. I’m not even sure if they can afford it in the first place! A lot of hype, but human nature proves that they always look out for themselves. At the end of the day, just don’t be the last one standing.

    1. I think its possible but fighting against the tide to improve the business. GME isn’t a long term hold in my view. Hold just enough to bleed out the hedge funds. I also don’t want to be holding the bag in the end.

      Margin on this is not a good idea. A lot of RH investors got burned because RH sold their shares off when they raised margin requirements. I’m using cash. Prepared to lose it all lol.

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