Jake Paul as a Hedge Fund Manager
Based on the...revolution we see going on as a lot of retail investors made a killing off of $GME I was joking with someone that we may see influencers start funds and trade off their following.
But it got me thinking. Has is this any different than Bill Ackman going on CNBC advocating for his positions? Let's face it the math isn't really that hard to learn and you don't need to be a quant to be a fund manager. Are the old rules being rewritten? Thoughts?
I personally love the idea. I want to see how hedge funds have to adjust to congregations of retail investors deliberately sniping their positions. This brings an entirely new dimension of influence gathering and development to the world of finance with social media allowing people to gather hordes of followers to their given cause. How can you anyone not see this as an absolute win? We've turned the stock market into the Wild West, and now even the most seasoned billionaires will have to think twice before doubling down on a position because someone might just trod along and say "Hey fuck you" and ruin the entire party. Now hedge funds have to actually earn their namesake and can't just skate along taking greedy positions. Now it becomes a game of who can truly convince the market that their view is correct.
Private Equity Firms are rubbing their hands like Birdman rn🤣🤣
Man no lie, I've spoken to so many companies that are jacked to the tits after the disruption of 2020. This is an exciting time to be in the hunting game, in my opinion. Times of crisis allow for the real disruptors and new thinkers to rise to the top. Chamath getting vocal on the developments of this whole GME fiasco is a perfect example. If you watch his Standford interview he makes it pretty clear. Old money has dominated and there's maybe ~200 or so people in the world whose opinions really matter and shape things. But these shifts enabled by internet applications are changing that dynamic when masses of people can act as a large coordinated group in their own collective interest freely, without a hard-coded supremacy structure (any form of management hierarchy, on WSB people just post and the public is free to upvote/downvote them to hell). This is what a free market is supposed to look like, it can only be ruined by regulation permitting restriction to occur, in this case stopping opposition from coming up to counter the restrictions put in place by many current retail brokers. Competitors to Robinhood are already popping up, brokerages advertising purely on the fact they will not limit the purchase of GME/AMC/BB/NOK/etc. Your time has come boomers.
Let's be honest, penny stocks & unstable companies were always the Wild West. Only difference is that retail investors got involved in it this time.
If you're a long term guy then you never gave 2 shits about the short term fluctuations anyways.
Jake Paul can literally go on Instagram right now, talk shit about how fund managers are shorting or even long certain companies, and to bring the man down his followers would do what he says as a Fuck you to Wall Street. And Paul could make a mint for him and his investors.
This brings an entirely new dynamic to the game.
It's so fun
Love the username addition 💎🙌💎🙌💎🙌💎🙌💎🙌
I don’t think it will work in the long run unless most of his followers make money.
This is true. Currently not the case with GME, but still true.
In ten years, where do you see the entire industry? As a whole couldn’t a plethora of things change?
Mostly the same. The system is fairly well entrenched. For example, smart-ish people who went to certain elite schools raise money from stupid inherited wealth they met at those elite schools, charge them 2 and 20, and become rich themselves, at which point they send their own kids to those elite boarding schools and universities where they meet other rich dumb people and the cycle continues. They can get anything they want from government because they write huge checks to politicians; the hardest job of a politician is raising money for campaigns and Wall Street makes their lives much easier. Not a politician and just an influential politician-adjacent? Then they'll pay you an annual salary to show up for a 30-minute speech, and you'll do their bidding. Wall Street doesn't care if you are Democrat or Republican. They bet big on Joe Biden this time because they thought he'd win. If they thought Trump was likely to win they'd have bet big on him.
Frankly, for the most part, it doesn't really negatively impact the general public (I actually am a supporter of the principle of short-selling, for example). But then when big events happen--such as the 2008 financial collapse--you see where it pays off to be part of the financial elite: privatized gains, socialized risk. The cynical among Wall Street will say the general public is just envious of the wealth of the elite (and that's often the case), but many people see Wall Street, the Ivy Leagues, and Washington, D.C. as linked at the arms--there is a revolving door that is tightly controlled, and those inside of this tight circle make money without, ya know, like producing, like, real products or services.
These fake products and services include "political consulting" where a politician in a safe district pays his own spouse or friends millions of dollars out of campaign funds for "political consulting," hedge funds and PE funds that consistently underperform the market (risk-adjusted), giving speeches at a rate of $500,000 per hour (to circumvent campaign and bribery laws), $10 million book deals for which the publisher loses money (and was never expected to make any money directly), multi-million dollar salaries to media personalities with worse ratings than mediocre YouTube content creators, "investment consulting" gigs to former generals and admirals. The NYC-DC elite money racket is so transparent. Some of the most mediocre people in the NYC-DC corridor are fabulously wealthy.
sounds like a carrier suited for my dumb brain tbh
+1. Can you elaborate on your point about "hedge funds and PE funds that consistently underperform the market (risk-adjusted)" being a "fake product / service?" Didn't understand that part.
LOL at the idea that majority of hedge fund AUM is from HNW...
HNW hates HF for the most part, hedge funds aren't tax efficient for taxable investors and the low but uncorrelated returns most funds offer aren't a sell for rich guys
most HF AUM comes from 1. university endowments 2. pension funds
I think the reason why this kind of NYC-DC thing works so well is that society was built this way. It's kinda the way things have always been. That's how people born prior to the 90s have always looked at it. It's the way they think of things now. There is some truth to how things were are how things should be, and even how things will be. It's hard to say this GME thing is likely to really move the needle going forward. But, I do think it's a very big deal, because at the end of the day it proves there's enough capital in the hands of the everyday man to fund some portion of operations for some businesses, which really pokes a hole in the HNW, private capital fabric.
Now, obviously, what these funds do is probably much more highly preferred than the randomness and irrationality that has so far proven to be the case with "democratized capital" of the few long plays like GME. And, it's likely something that would prove very unsustainable. If we take the increase in market cap as the total dollars that flew into supporting GME, then that's roughly $20B, which is less than 1% of the total US economy. Even worse is that this is clearly not a rational play. Gamestop would need at least 10 years or so before it could return even just a small % in value to shareholders.
It's a good win for "the little guy" and even may prove that there is a real case for retail investors to share in how capital moves. But there is no sustainable way for this to become a major part of our financial system within the foreseeable future, based on what has happened in the past couple of weeks.
I'm seriously hoping that there will be more than just 1 influencers in this "area". Otherwise, you're just creating another big powerful guy who will end up trying to manipulate the system to work for him at the expense of others..
I think there will be. It can be a new way of managing a fund. Integrating social media with high finance.
Many legacy industries are behind in that aspect (high finance, real estate, private equity, etc.). I think as we millennials gain more power in these industries we will see more of a marriage between the 2. VC is already kinda doing the same thing.
Running a Hedge Fund might not be possible for him since his Followers probably don´t have big sums of money to invest, but an actively managed ETF where a lot of "small money" would be pooled, could be considered.
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