How Will This End For WSB?
So I have just stumbled back from the bars, so please excuse any irrational thought in what I am about to say, but I just had to get it off my mind.
How Will This End For WSB and GME?
Well I did not live through the tech bubble, but I have read way too much about the market historically that may have impaired my brain, but this will not end well for majority of the retail WSB clowns. Why? We are in a speculative mania. I can't go on Instagram without seeing some smokeshow give her first stock tips to her followers or some random person from high school that barely graduated sharing the invite code to get a free stock when you sign up for Robinhood. Maybe I am just a crazy suit that doesn't know anything, but I would say we are in a speculative fervor to say the least. When even the forums of WSO are littered with WSB sentiment, you know it is not sustainable. Anyway as far as GME, anybody who has studied any short squeeze in history understands that what goes up will eventually come down. You have to be kidding if a stodgy retailer of videogames with declining sales for years in a world moving towards digital downloads is worth $23B market cap, but that doesn't matter when you have diamond hands to stick it to the big guy. I feel like the only sane person left, or maybe I am just drunk, but the sad part is that we will see many, many retail investors get completely screwed. Why? Because eventually the buying will stop as people realize GME is not truly worth $1000/share and nobody will want to be the greater fool. With no remaining buyers and the shorts covered at this point, GME stock will drop fast!!!! Who will hold the bag, the dumbest retail investors who had FOMO and decided to put more money than they can afford into GME and be completely screwed. Then the speculation will slow as the media shifts from focusing on hurting the handful of hedge funds with sizeable shorts on GME to the retail investors that got destroyed as GME collapses back to under $50. Has this happened before? Well yeah try every single short squeeze or bubble in the history of speculation. Morale of the story is do not put more than you can afford to lose in these speculative stocks.
-From a dumb smallcap value analyst that passed on GME at $4 this summer. FOMO.
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I understand the movement here of sticking it to the big guy, but it is very misguided. The reality is that the hedgefunds short GME and AMC comprise a very small amount of the total financial system assets. The world will be fine if Melvin and a handful of other hedge funds go under. In fact many are profiting off this stuff.
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Mass market manipulation is not healthy for the markets in the long-run. Volatility and mispricing raise the cost of capital for everyone thus making our economy less effective
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To the WSB that want to blow up the entire financial system, you realize that if the financial system gets fucked, so do you and the rest of the economy? Doesn't matter, at least there will be tendies.
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I am completely on-board that having more people excited about the markets is a good thing. But being excited about the wrong things and addicted to manipulating random stocks with high short interest or micros with low floats is not a sustainable practice. Unfortunately, the end result will be that many of these people will get stuck on the opposite end of the bubble and hate the markets and wall street for the rest of there life. Everyone already does.
“The market can remain irrational longer than you can remain solvent"
- John Maynard Keynes
Good night everyone and good luck, bring on the monkey shit. I will regret this in the morning.
Ipsam pariatur error ratione tempora. Fugiat sit non nam perspiciatis. Adipisci nisi et illum sed est aut. Dolore veritatis mollitia rerum enim.
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