Skip to main content

Reddit, Gamestop and Market Nihilism

 I've been exceptionally busy lately and haven't had the time to really work on any content, but the whole GameStop and reddit thing was too much to not at least discuss. I see a few glaring things that really paint a horrible picture of the state of society - in particular the younger people.

What is happening here is really simple. All these Redditors are buying up GameStop, Blackberry, AMC and other stocks. It's a concerted effort that is driving up the prices of these stocks. All of these companies are weak companies, so we have Hedge Funds moving into short them. Now, if not always, this has been projected as this battle between the regular folks and the big bad Hedgefunds.

A few takeaways:

The Market is just a game

The only thing I can take away from the redditors is that the market is just a game. They don't view investing, taking money to make more money, as anything real. They view it merely as shuffling papers, moving money around and the rich get more of it - while everyone gets screwed.

Investing is a noble act of allocating resources where it is best suited. It is one of the few areas where reason is the dominant proponent of it and hence why it is so derided. One has to choose where to put money that will generate the most output. Short sellers, the true heroes of this story, are the ones that are taking on tremendous risk to keep the market efficient. Resources that go to poor companies, like GameStop, Blackberry, AMC, etc actually take away from the market. People creating cancer cures seem like a better place for money than a failing brick and mortar game shop.

So first take away: the market, investing, is just this game of papers and moving money around.


Reality is just whatever 

GameStop is a brick and mortar game business. It's dying and has no future. It has poor fundamentals and overall not worth much. This is reality. With the view that the market is just a game, is to detach the business from what it really is. What makes GameStop a 30 billion dollar company? Nothing more than the fact that they can chase the price out.

The fundamentals don't change despite this and eventually things will go back to where they belong - not before crushing some.

Conclusion

I didn't have much time for writing this, so I just wanted to keep it simple. The heroes of this story are the hedge funds for shorting these companies. They are making reality based decision making. The redditors are nihilistically approaching the market with nothing, but destruction as their goal.
Labels:

Comments

Post a Comment

Popular posts from this blog

Island of Bryan Solar Panel Numbers are Horribly Misleading

Who doesn't want to be all sustainable and oh so environmentally friendly? I was watching the show and they brought down their 'friend' to help them get some solar panels on their resort. By friend, they mean some strategic business partnership to advertise the business, but that's not what I'm here to talk about - even though if this was an oil company 'friend' then all the numbers would be instantly scrutinized by default. Not in this case. And it just annoys me at how sloppy, misleading and downright fraudulent the way the solar crew present numbers. Here's how things were presented on the show: This is an island in the Bahamas which uses a diesel generator for electricity.  Diesel is dirty. The cost of this electricity is 35 cents/kWh. Solar is only 5 cents/kWh. Solar is obviously clean. Pays itself back in three years. When things are presented like this it only make sense to do solar right? It's drastically cheaper. It's cleaner. It's j
Post a Comment
Read more

Milquetoast Brian Jean

  I've been following the UCP leader campaign here in Alberta with great interest. There has been a very anti-Kenney sentiment in the air around here, in particular with Kenney's top down party style, the lack of pushing back at Ottawa and over COVID restrictions/vaccine passports.  Brian Jean lost to Kenney and it looks like he lost because he was politically outmaneuvered - rather than a battle of ideas. He's obviously sour and was on the anti-Kenney train ever since. Let's just say that I was a bit excited that he's back. I wanted to see what he had to prove and that he may have some fire in him. The problem I have had with conservatives as of late is them being milquetoast. All that means is that they're very safe, very center and literally bring nothing to the table. Even though conservatives in CANADA say there are many things that need to change, they don't actually do anything all that different than the governing left. Maybe not as bad, but it all s
Post a Comment
Read more

The Energy Market with Unreliables

 The energy market is going to be something that will be on people's minds for a long time because right now there is very poor policy and ideological views driving us to a crisis. There has been a nice little bull run going on over the last few months, and this may not be the crisis. It's something that may immerge here, but it might be 5-10 years from now. For the longest time I've been a passive index investor , and I still am for a nice chunk of my portfolio, but over the last 18 months I've decided that I'm going to apply my own judgment to the market place and invest accordingly. Over this time I've accumulated a pretty sizeable portfolio of LNG (Liquified Natural Gas) companies, in particular upstream and midstream companies. Renewable Energy or Green Energy are Unreliables There is a political push for green energy. It's driven by the moral ideas that green energy is this universally good  energy and all the other reliable energies we use like fossil
Post a Comment
Read more