How dare you!
Where do you come off evaluating, organizing, and speculating in our market?
You don't have the right connections on Wall Street.
You don't have enough wealth to matter.
How dare you!
Last week was epic in every way.
With all the superlatives aside, the Reddit fueled short squeeze was a shot across the bow of the ruling elite on Wall Street!
However, this time felt different.
We have seen lots of truly dramatic short squeezes over the years and the concept of hunting shorts is nothing new.
What made the "/wall street bets" community and ecosystem so different?
It showed a newfound power of organization far better executed than we have seen before.
It also is a case of the stocks imitating life.
GME represented people as much as a value discovery.
GME was resistance, even in the face of logic...that people matter.
Commonplace bantering and slick visuals in a stock forum- took on a life and mission of its own.
Message boards of raving stock fans are nothing new.
But this became a revolution...and all the stars aligned for the battle.
Massive short interest, a new activist board, and an upcoming options expiration.
The plan was hatched...brick by brick, trade by trade, meme by meme.
No selling...no matter what.
It didn't matter these folks weren't elites, nor could they truly influence a stock's price-and most knew it.
It's sad and naive if anyone plowed needed money into this under the illusion of investment.
Suddenly a share of GME or AMC now represented a mission and support to resist.
And they weren't selling.
It became a movement.
("I like the stonk" was all over!)
The stock holding represented their collective voice.
They were empowered by every rally.
Their ability to move a stock...was their winning.
These were stocks imitating life. It was a protest,
Suddenly we had celebrities chiming in about stocks. We saw battle lines being drawn.
Main St. vs Wall St.
Online Activists vs Suits
The nation (& maybe the world!) was fixated on stocks.
At one point, the short squeeze created a transfer of paper wealth that was reported to have been close to $90 billion dollars. All we can say is wow!
After the fog of this moment has dissipated, many will take time to reflect on this past week.
Some will analyze the charts, others will scour option statistics, the timeline of the information flow, the sentiment, and how the crowd moved markets in unison, creating massive losses for the big money hedge funds who had been short with apparent impunity.
The sudden limits on retail buying contributed to changing sentiment creating a free fall.
This was a retail phenomenon where the shares of GME represented much more than their money gains (& losses).
GME represented a power to resist, a power to convene, a power to share.
As traders, we must keep our eye on the prize-winning and gaining profits. We can't get caught up playing someone else's game. As a long-time market participant, it didn't surprise me to see it come crashing down. What did surprise me was the way it played out, then all the attention?
It showed me people are resisting in many new ways.
As traders, we aren't investors, it takes discipline and a realization that we need a method and rules to keep solvent and to grow our capital.
But there was also a lesson learned by all about the newfound power of crowdsourcing stocks and the impact it can have on longs...and shorts..
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