RE: Reddit slamming the big shorts

Another harsh day for the Gamestop Reddit crew.

I’ve got a friendly wager with a client of mine in Florida. Last week, we scheduled a call for tomorrow morning. I said GME would be under $50. He said it would still be over $200.

Depending on how hard it opens, I still have a chance.

A few days ago, I had the sense that all this meant something. Something potentially rather big.

Now I’m having doubts. I’m leaning toward the view that all this has been nothing more than “a tale Told by an idiot, full of sound and fury, Signifying nothing”.

One interpretation is that the presence of a willing army of independent traders stand ready to impose wild, irrational swings on the markets at unpredictable times. That may very well be the case. Or maybe not. This may prove to be a one-off. The Reddit crew has learned a lesson, perhaps, and may not have much of an appetite for seconds.

But whether or not the “weaponized autism” has staying power, I’m coming to the view that it doesn’t mean anything. I am a fundamental believer that in the long term, markets are always efficient. Prices will always, inevitably, reflect underlying value. There will always be Gamestops (and Teslas), but so what? A bunch of goofs can coalesce around some stock and bid it to the moon, and that will make for an interesting story, but sure as day follows night, the stock will return to where it belongs.


It does occur to me how bizarre our world would seem to most anyone in history.

Last week I discovered a small account my mother had left behind. An inconsequential amount of money, but I figured why not and dropped it into my cash account at Ameritrade and bought a few mutual fund shares.

Now, a week later, I’ve seen a modest gain of around $50. (Actually a pretty good % gain, but not much money in total.) 

I can’t get over how bizarre that is. I sit at my desk and use my mouse to click on some buttons on the screen and presto! For no apparent reason and having done nothing anyone could reasonably call “productive”, I now have a collection of bits sitting in a computer (God knows where, actually) such that if I hand the people at Arby’s a special piece of plastic, they will feed me and my family.

How strange.

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