Now that the GameStop fiasco has finally settled down, how did things turn out for everyone?
If you bought GME in early January and then ignored everything and just held onto it, you've done OK: your stock has doubled in value. Congratulations!
But what if you played the bubble? Then it worked out just like every other bubble in history. If you bought low and sold at the peak, you made a fortune. But if you bought into the mania in late January, you lost your shirt.
So now the question is: what kind of people mostly profited from the huge runup? And what kind of people mostly lost everything when the bubble burst? The answers to those questions, if we ever get them, will tell us whether this was a "people's revolt" or something a little less salutary.
Well, I think it did play out as "institutional players versus non-institutional players". Or, for "institutional" you can read "hedge funds". They had their high dudgeon of "who are these upstarts!!?!". The upstarts were by-and-large professionals or at least semipros, who acted as a cartel, but organized informally, outside the bounds of large firms.
In that sense, they are the "little guys". By comparison. In the absolute scheme of things, not so much. But that doesn't turn them into the bad guys. I see this thing as mostly having no morality attached.
The bag holders are always speculators with no consistent investment strategy, and a fear of missing out. Some will be institutional, but most will be someone's cousin with a new robinhood account and an underfunded 401k.
The rule for investing in individual stocks, or for trying to time the market, let alone trying to time the market for an individual stock, let alone a stock that is ‘in play’ — don’t go in with money you are not prepared to lose.
See also "The Beach Bum who Became a Gamestonk Millionaire" at theRinger-dot-com.
Not to worry though, the current run-up in the price of bitcoin is not at all like the GME bubble. Bitcoin is just going to keep going up because unlike GME bitcoin has important, ahem, fundamentals backing it. No parallels at all there, nosiree.
If the Internet had been a dozen years ahead of itself, Ron Paul would have funded his dirigible platoon of 2008 with BitCoin.
$100.00 invested in Bitcoin in 2010 would now be worth $5,200,000.00
So, I mean...
Oh no.
Somewhere in the multiverse Ron Paul is directing the Kaiser's Air Force against the Fiat Currency ghouls.
I can't tell if you have schizophrenia or are someone's AI project.
Either way, keep at it!
My 20-something son has been dabbling with Robinhood for the past 6 months. Started with 2k last uear and had 6k at the start if this year.
He lost his mind and dumped his entire bankroll on GME around mid-January. He sold his entore position 2 days later. And a day later closed his Robinhood account because of their restrictions on several of the "meme" trades. Specifically he tried to buy AA (American Airlines) and Tesla and Robinhood prevented the trade from going through.
So long story short. He bet 6k on gme and sold 2 days later for 36k. His ridiculous risk paid off. But as his fsther, I have grave concern this will incentivize him to take greater risks.
If I were his dad, I would rather find out he had gotten into heroin & started dating a BackpageModel than fallen into the Gamestonk trap.
At this point, a good Dianetic auditing might be his best way out. (Plus, 36k will be a nice downpayment on Miscavige's next sportbike.)
And now he gets to pay short-term capital gains on that payday!
There's nothing worse in the world than having to pay taxes on $30,000 made over a month.
I would suggest you ask him to explain his thought process here. It might reassure you.
The thing is, the play from mid-January to the end of January was very smart. If Robinhood and other brokers hadn't (possibly illegally) stopped the purchase of GME, the short squeeze might have driven the price per share to $1000.00+.
I was there watching, and watched in real-time as the price hit $400+ and when halted, dropped to $100s as the HFs were probably selling shares to each other on discount while Robinhood prevented the "little guys" from cashing in on the obvious naked short that had been ongoing for months.
So, instead of making $36,000 on an initial investment of $6,000, it might have been $70,000 or more. I don't think it was a bad play. It was a once-per-decade short-squeeze organized by "little guys".
Of course it was a short-squeeze play, anyone reading WSB knew that. No one expected the stock to sit at $500.00 forever.
It became a public movement to fuck over HFs who typically do the fucking over of the economy and everyone else. It started as a short-squeeze and became political. What a time to be alive, etc.
Honestly the non shorted value of the stock probably should be around this level.