He has an incredibly story (coming from nothing) but lets look at his career:
He "leaves" (aka fired) Facebook for being a D*ck head. Nobody is willing to work with him because he is rude and a jerk. His direct reports would cry regularly. Steven Levy talked about this in his book on Facebook.
He starts a VC fund. The fund has no "major" wins. For a guy writing checks in 2011 he didn't get any of the big wins. The VC fund literally "burns down" as Axios put it because he divorced his wife and was chasing a girl in Italy rather than being in the office.
Now he SPACs worthless companies selling them off to retail traders who think he is Warren Buffett. He is a salesman. The guy is on CNBC every other day.
I get the "holding truth to power" narrative is attractive but Chamath is not our saviour. I would argue he is just as bad as any other hedge fund manager. Taking advantage of retail investors.
Chamath talking about protecting the little guy is like Steve Cohen talking about respecting securities laws.
His "VC" fund is a social good company that prioritizes people's wellfare over profits. and who cares if its a success or failure, VC is hard.
He isn't a hero and he isn't a "Dickhead". He's just a human.
If you don't know him personally you really shouldn't be making these kinds of baseless adhominem attacks.
Reading your comment history, its nothing but black and white opinions and pointless preferences.
I am leaving this community forever. This whole place has gone down hill. There are no more hackers here. There is no more real discussion of anything. I feel bad for paul graham. This website is a disgrace.
And, in fact, the stuff you don’t know is even worse.
His VC fund had LPs that lost money. I don't think they really give a shit about "welfare over profits". Once it's a family office yeah sure preach about welfare over profits but remember he had a fiduciary responsibility to his LPs which he (likely) broke.
"No more real discussion". This is what real discussion looks like. People LOVE chamath and I am explaining what I see is wrong about him.
Box, Slack, Yammer, Palantir. I guess I don't know what the definition of "major" is, but those seem decent. The VC fund did eventually "burn down", but not because of bad investments but because he had some personal issues.
I don't have a strong opinion about him as a person. I just don't understand why a criticism was that he was a bad VC. It seems like he probably came out OK there.
I was on reddit watching this speculation frenzy unfold. These idiots follow this guy's words and then spin rumors off of them....then those rumors circulate in this echo chamber until everyone is saying the same thing.
Then you have stuff like GME and AMC. I'm not surprised at all what is happening because there are so many people that just see the next big trend and just pile in.
You clearly can, considering your comment hasn't been removed. Why do you think your opinion deserves to be on the top of the page over anyone else's?
I mean if you have a disagreement with his ideas, it makes sense to debate them/attack them but on a post about his comments on the WSB debate you've tried to take his personal life and accomplishments to the cleaners.
> Yes, I am pretty pro WSB just like chamath. I think he is wrong about the "research" that is happening though. There is a bull case but not a $25 bil mkt cap one
And that's after you've already mentioned that you're pretty pro WSB. Is he wrong though, WSB posters identified, correctly, that they could use the GME short interest in their favour by squeezing the folks on the other side of the trade. @chamath never mentioned there's fundamental research to support a $25 billion market cap.
I don't know the backstory on his time at facebook but from all the articles I've read on his VC fund, he returned north of 30-40% / year while it was active. When commenters have pointed out his wins, you've discounted it as 'oh, but it's just one company' or something along the lines.
Additionally, Steve Cohen isn't really a fair comparison - that dude's company was literally shut down for insider trading - it's a whole different ballgame that Steve Cohen pretty much got away without so much as a slap on the wrist though.
Also the world is littered with people who've made poor decisions / decisions that are suboptimal to the external observer but I think given you don't have a microphone into their personal stuff, it seems really disingenuous to use that to disparage him.
It helps that there aren't very many big names with airplay in the media right now that aren't being ridiculously biased against WSB here.
https://i.pinimg.com/originals/f3/f9/6c/f3f96c06ddc73aa35cfa...
I think it is a stretch to say r/wsb insiders are obviously taking advantage of newcomers. You can’t spend much time with WSB without developing some financial literacy, and there are compelling ideas. It is not just flexing and hype. Also, I don’t think there is a precedent (such as the pyramid scheme) for what they are doing in the market.
I think there is some truth to your mention of young Reddit person being vulnerable, but I think it is risky trying to protect them with regulation.
Most times WSB talk about normal stocks and positions and the gains or losses thereof. A few like TSLA, PLNTR and now GME hit the mainstream airways are meme stocks. Losing money and bragging about is about as big a kudos as gaining as much.
The level of organisation and criminality you might think exists isn't there at all.
The guy from Shark Tank, Kevin O'Leary can raise a fund just by virtue of that, being a known brand.
He seems like a person with good intentions, but just kind of a hustler, not a bad one, I don't think he's starting pyramid schemes - but I also don't think he has anything to contribute.
We're in a new era of Twitter/Youtube experts with a ton of populism via RobinHood and ETrade Retirees so we're going to have to live with the talking heads.
Slack?
But imagine retail investors doing this out of sentiment, a la Facebook. It is even scarier and more sinister.
Thieves robbing thieves, it is best to stay out if you have ethics.
>Comes from nothing
>is a billionaire
EDIT: That's according to him. I wouldn't be surprised if the guy overhypes his assets. Also his divorce likely cost him half (they got married before he joined FB).
I have to say up front, I find this kind of attitude incredibly infantilizing and condescending.
Exactly how many "bag holders" did Chamath "create"? (Hint: Zero.) Obviously the "bag holders" are assuming the risks themselves, as is (absent any evidence to the contrary) Chamath. They're on a forum literally called "Wall Street BETS" (emphasis mine). If a millionaire announces he's playing the slots and subsequently wins the jackpot, is he "responsible" for everyone else who subsequently plays slots?
(He didn't make this argument as well as he could have, but Chamath himself points out that when Goldman or AIG played stupid games, everyone else was conscripted into being the "bag holders.")
Also, exactly how many people are we even saying Chamath influenced? How many people were undecided about making the GME trade and then said, "welp, Chamath is long so YOLOOOOO?" And how many of these people traded irresponsibly (e.g. overleveraged, invested their life savings)? I would bet the number is small, even negligible.
> His plan to make hedge funds disclose their positions daily as some kind of a solution to overleverage makes no sense whatsoever.
Correct me if I'm wrong, but I don't think he ever proposed this as some sort of affirmative plan. What I heard was him pointing out the asymmetry of which entities are required/voluntarily publish their positions. If hedge funds had done that, the 136% thing would never have happened for obvious reasons. I interpreted it more as a response to the interviewer's pearl clutching about the market having no "integrity" because a stock price deviated from the "fundamentals" for a time under some bizarre circumstances.
> And he’s delusional about research skills of WSB posters as compared to Wall Street analysts.
If you're correct, then you can easily show us your short positions contra WSB research/herd mentality/irrationality/<pejorative> and we can track how well you end up compared to WSB.
This - this is the point that seems to keep getting lost. The Big Guys get bail-outs constantly - hell Melvin got a float of $3B over this mess.
I don't know what answer you expect him to give. Are you saying that people shouldn't be allowed to tweet their trades? Also it's ridiculous to think WSB isn't full of bagholders - I've seen people blow up their accounts on completely ridiculous trades they had researched on their own. Are you saying people shouldn't be allowed to make bad trades?
Chamath answers the question correctly; the question you're asking implies that you don't think retail should be trusted to invest. If that's truly what you think then say it proudly.
Perhaps, but like his response to this question pointed out: neither did wallstreet when they left the US population as bag holders for all their damage in the past (ie, 2008).
Additionally, the only people left being bag holders here so far are the hedge fund (and their copycats) taking such an absurd short position.
“So far” is carrying a lot of weight here.
They are complaining about a necessary situation they created lol. We need to stimulate investment to get out of the last crisis (that was the plan all along). What are these cats complaining about?
oh no.
that's really bad.
Options is one of the really fast ways to lose your shirt. I mean, they are known for that. I expect they were talking about doing it on margin too. :-/
By that logic, Wall Street was "right" for years, because housing prices just kept going up and up and up and up. This story didn't end yesterday, it's entirely possible that the Tesla shorts were "just premature" the same way that the people who started shorting the housing market in 2005 were premature (and took a beating during those years).
And the praise for /r/wallstreetbets seems a bit excessive considering that by his own admission, he only just learned about them a couple of days ago. I don't know how much time he's spent there but I'm not sure that his read on the place is especially accurate.
This all is certainly highlighting that these systems have been fundamentally unfair for a long time, but that doesn't mean that real people won't be hit hard financially as a result.
I don't know, maybe I'm just far too conservative with my money to do something like this.
This isn't new...there are gamestops every couple of years. This is just an extreme version in a year when everyone is online 24/7.
Certainly there's a crowd on WSB that are just sheep, but there is a minority of WSB posters that produce quality research and analysis. The idea that Wall Street insiders are elite, a different breed, is mostly a myth. There are smart people working Wall St to be sure, but there are lots of smart people working elsewhere.
I think it's a mistake to take his comments as applying to WSB as a whole. I agree WSB posters, collectively, are mostly clueless. But there are absolutely people in there who know what they're doing and have put a lot of thought into their strategy.
However, he does come off as someone who doesn't understand what he's talking about:
* comparing WSB "research" with proper fundamental analysis
* daily position disclosing is unrealistic and unrelated to what's going on
* doubling down on the retail vs wall street narrative and talking about the mortgage crisis, when Melvin Capital is a buy-side institution, not a sell-side institution.
* generally painting WSB users as "curageous" for expressing their views in a public forums when a. everyone is using aliases and b. WSB is cery similar to one of those pump-and-dump penny stock IRC chats, just at a much larger scale.
He might appear to be confident and informed but, for someone who is familiar with the industry, he just comes off as being full of bullshit/having a hidden agenda.
This isn't a defense of the guy by the way since all of this schtick is to ride positive PR as a billionare looking to enter political office in a climate where people aren't exactly enthused about billionares.
https://news.ycombinator.com/item?id=25932598 ("Chamath Palihapitiya on Wallstreetbets [audio]" <-- you are here
https://news.ycombinator.com/item?id=25904779 ("How WallStreetBets Pushed GameStop Shares to the Moon") 2 days ago
https://news.ycombinator.com/item?id=25908084 ("The nihilism of r/wallstreetbets") 2 days ago
https://news.ycombinator.com/item?id=25868680 ("r/wallstreetbets set to private after increased media coverage") 5 days ago
Edit: This story is breaking my stack metaphor, and a graph metaphor would be too complicated.
These are all significant threads with interesting articles that are different enough from each other that I don't think we'll merge them:
https://news.ycombinator.com/item?id=25930214 ("GameStop Is Rage Against the Financial Machine") <-- currently on the front page
https://news.ycombinator.com/item?id=25930488 ("How r/WallStreetBets gamed the stock of GameStop")
https://news.ycombinator.com/item?id=25929443 ("Robinhood, Trading 212 and others go down amid AMC and GameStop stock frenzy")
https://news.ycombinator.com/item?id=25929110 ("GameStop Opened at $300+ Today") - not an interesting article but the thread is better
https://news.ycombinator.com/item?id=25926953 ("The GameStop Fiasco Proves We’re in a ‘Meme Stock’ Bubble")
https://news.ycombinator.com/item?id=25927254 ("GameStop Short-Sellers Reload Bets After $6B Loss")
Edit 2: these just in:
https://news.ycombinator.com/item?id=25934186 ("Nasdaq says they will halt trading if a stock has unusual social media chatter")
https://news.ycombinator.com/item?id=25933581 ("GameStop Mania Reveals Power Shift on Wall Street")
Edit 3: and now this:
https://news.ycombinator.com/item?id=25935511 ("Discord bans the r/WallStreetBets server")
https://news.ycombinator.com/item?id=25935746 ("WSB Went Private on Reddit")
Edit 4: https://news.ycombinator.com/item?id=25936521 ("Where do we go from here and who is going to step up to help us?")
https://news.ycombinator.com/item?id=25937396 ("Ask HN: What the heck is happening with GameStop?")
Edit 5 (the next day):
https://news.ycombinator.com/item?id=25957748 ("Statement of SEC Regarding Recent Market Volatility")
https://news.ycombinator.com/item?id=25941431 ("Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop")
https://news.ycombinator.com/item?id=25945447 ("We Are Preparing a Class Action Lawsuit Against Robinhood")
https://news.ycombinator.com/item?id=25942240 ("WallStreetBets vs WallStreet: It's not about the money anymore")
https://news.ycombinator.com/item?id=25942863 ("Reddit's GameStop, AMC surge is the new Occupy movement")
https://news.ycombinator.com/item?id=25944051 ("GameStop: Anger as trading in GameStop shares is restricted")
https://news.ycombinator.com/item?id=25942790 ("An Elegant Revolution Followed by Slaughter")
What will become of us? where will it all lead?
Edit 6: well, it's leading here next:
https://news.ycombinator.com/item?id=25948391 ("Robinhood is automatically initiating GME sell orders on users' behalf")
https://news.ycombinator.com/item?id=25947814 ("Class Action Lawsuit Filed Against Robinhood")
https://news.ycombinator.com/item?id=25947697 ("Robinhood now has a 1-Star rating on the Google Play Store")
https://news.ycombinator.com/item?id=25949618 ("An Update on Market Volatility")
https://news.ycombinator.com/item?id=25950685 ("Robinhood is said to draw on bank credit lines amid tumult")
https://news.ycombinator.com/item?id=25951390 ("Robinhood Play Store listing went from 329K reviews to 180K in few hours")
https://news.ycombinator.com/item?id=25952659 ("Facebook shuts popular stock trading group amid GameStop frenzy")
Edit 7 (another day):
https://news.ycombinator.com/item?id=25957748 ("Statement of SEC Regarding Recent Market Volatility")
https://news.ycombinator.com/item?id=25958639 ("Robinhood denies claims that it sold GameStop shares out from under its traders")
https://news.ycombinator.com/item?id=25957923 ("Interview with u/DeepFuckingValue, who drove the GameStop Reddit mania")
https://news.ycombinator.com/item?id=25956329 ("Ask HN: How is GME not a pump-and-dump?")
Edits 8/9 merged:
https://news.ycombinator.com/item?id=25954539 ("Robinhood, in Need of Cash, Raises $1B from Its Investors")
https://news.ycombinator.com/item?id=25952300 ("Suck it, Wall Street" – a Taibbi title)
https://news.ycombinator.com/item?id=25979673 ("Why Robinhood disabled buys but not sells")
Hopefully it will be infrequently necessary. But I suspect that we're living in "interesting times".
Would it be too complicated, or do we lack the tooling to visualize it properly? :). Graphs are good.
> This video contains content from NBC Universal, who has blocked it on copyright grounds.
there is no safety net for hedge funds (or indeed, any investment company that's not a proper deposit taking bank). The GFC was an anomaly - and banks got bailed out for taking on risks that they shouldn't have been (and only some - lehmens got owned and they didn't get bailed out). The bailouts were more about stablizing rather than saving the gov't buddies, despite what the conspiracy narrative likes to make (of course, it _did_ save the banks, so believe what you will).
Source? Clearly "they" dont like losing money but the rules are clear.
The Secretary of State of Massachusetts was on TV pushing a 30-day trading halt on GME. That doesn't strike me as something that particularly falls within his ambit, and I genuinely wonder what motivated his appearance there.
If you feel that another comment is wrong, the way to respond is to show how it's wrong, include additional relevant information, and avoid name-calling. Then we can all keep learning (and also kick the can down the road a bit regarding the part where we degenerate into flaming spears and tribal warfare).
I get that the GP comment was also a provocation without much information in it, but these things are matters of degree, and the right direction to go in response to provocation is exactly the opposite to the way your comment went.
On a more serious note, I don't get how a stock can be 140% shorted. Does that mean once you return a portion of the shares you borrowed you have to rebuy part of it and return it again? Also when would these short sellers get margin called?
If they only had put options, why did they need a $2.5B bailout this week? I was under the impression they also had short positions or sold naked calls in order to get into as much trouble as they seem to be in based on the bailout announcement.
Or were their put options' value being used as basis other leveraged investments?
Don't understand how they could have lost $2.5B on just put options.
I think the general answer would be no, because at the end this fund would be a bagholder of $350 stock that's worth about $30, and when trying to get rid of it the price would crash down.
My question then is, how are we somehow thinking that WSB doesn't have the same problem? The only issue is that the bagholders will be retail. It's being played off like some giant win to WSB. When really, those who have closed their positions have won, probably a select few. There's probably a lot more that are bagholders who're yet to feel the pain, which inevitably comes as everyone agrees that outside of the temporary short squeeze, this stock is not worth much more than $30.
Even if WSB users and other retail holders held like, 30%, Burry holders 3%, and Cohen holds 10%, there is still more than 50% out there which may be bought by others. There aren’t enough interested Americans to buy the rest of the company.
Other hedge funds and big investors are in on the action. These shorts got caught in a bad spot and now they are paying for it. Once all the retail traders get screwed in the media, others on Wall Street will quietly take their bonuses and go out for drinks or a new car. Nobody will report how much money they made. Why would they?
Explain why they'll be holding $350 stock when the hedge fund who was shorting the stock has obligation to return all the stock that it borrowed. All these stocks will leave them, so why it matters if the stock is $350
Edit: Couple of stand-out comments he made, paraphrasing:
‘The best wsb due diligence can be indistinguishable from top hedge fund due diligence, the funds don’t have an edge’.
Right. It doesn’t take a genius to know GameStop will have a hard time in a cd-less world and full digital download marketplace. It also doesn’t take a genius to know GameStop will not go to zero dollars (so don’t short to that level).
Love the defense of the intellect of the retail investor and a group that doesn’t need to be coddled, great defense against the patronizing and condescending suggestions.
Second edit: Jim Cramer recently peddled Raytheon’s earnings up. I’m not a genius but they got the earnings from laying off 16k people. Ok, how many quarters can you do that for? This is a play someone can consider (in either direction). We’ve got brains I think too.
They have manipulated markets through various institutions and making knowledge so hard to come by without going into massive debt in order to maintain their elevated status.
In their arrogance though, they thought they could reverse the trend of the democratization of their power to the masses, and have literally tried to move heaven and earth in order to remain in power and reverse the trend.
My curious position is I think they are realizing that the trend is irreversible, that power eventually will always diffuse to the masses eventually as no system is perfect, there will always be leaky abstractions, and I have no doubt they have a nuclear option in their back pockets to try and quell the massive shift of power that seems inevitable at this point. Question is, what is that nuclear option?
Chamath, Naval, Elon etc all belong to the narrative of decentralization and crypto with their own vested interests. Just the other day I was listening to Naval’s interview with a New Zealand media house - dude is literally urging people to buy Bitcoin.
Unrelated, but I’m going full bonds/cash after seeing the insanity today’s market is, not just GME but look at TSLA, etc. I can stay irrational longer.
I think some of the fundamental analysis on WSB is sound, but doesn't support the existing valuation. The "short squeeze" play is interesting, but I don't have access to the ticker and book to read the details on what is actually going on. It's stampede material.
Sure, I've got a little in AMC/GME, but even if we, ahem, "go to the moon", because, eh, why not, it's a fraction of a fraction of my net, why not pick up a few bucks on the side. =)
The vast bulk of my investments are perking along in Vanguard index mutuals and will not even notice GME.
Even GME, before the phenomenon, the subreddit was mostly targeting 40 dollars around April earnings. The short squeeze was a real tactical play, but most people weren’t 100% on that as the main catalyst (as in, most people really thought the ps5/Xbox sales would be realized at earnings time beyond the ridiculous short position of bankruptcy).
It’s a pretty sensible subreddit.
Most of these top firms have a specific pipelines from top ivy schools, they are very very selective for a specific person usually from an upper class upbringing.
I think Chamath has a point in that there's a lot more people capable of understanding the dynamics of options than are given credit for.
There still seems to exist this hubris in wall street that unless you went to those top schools you aren't capable of understanding derivatives and most of those institutions won't even interview you for a position if your CV isn't prestigious enough. Yet time and time again you see these funds blow up.
That being said its amusing how people just ran with the caricature of a fresh out of high school, blue collar upbringing, degenerate CBOE options pit trader who you would find smoking weed during trading hours and coked out pounding drinks at Ceres after hours with an autistic antisocial 4chan twist(heard stories from people who knew floor traders like this).
It seems like a lot of the professionals can't see past the tongue in cheek self deprecating humor to realize its an act that people play up.
institutional traders: do coke during trading hours and smoke weed after hours
> "It doesn't mean that the investors that were short the stock were fundamentally wrong" - at around 28:00
Did he not hear that 136% of the shares were short? Anybody, LITERALLY ANYBODY who shorted past 100% deserves to lose everything. It's fundamentally stupid and fundamentally wrong. The shorts are not getting screwed, they deserve what they get from this.
Then he goes on to retail investors being the ones who are sometimes going to get hurt?
How did such terrible, poor, awful analysis get a position on TV? If he had any point, he never ever made it.
Palihapitiya is a regular guest on this show, but was invited to appear today because of the extraordinary price action in the common stocks of GameStop ($GME) and AMC Entertainment ($AMC) resulting from short squeezes on each stock.
The remarkable thing about what Palihapitiya says is that he criticizes the institutional investment community which operates hedge funds who use excessive leverage to bet against small investors who-- in this case-- have bet that the stock is oversold.
At one point today 140% of the total number of shares of $GME stock had been shorted (meaning it was borrowed and sold to others, with the expectation that the investors who borrowed the stock would be able to buy the stock back as shares of $GME fell from inflated levels).
The interview makes extensive reference to the /r/wallstreetbets, https://www.reddit.com/r/wallstreetbets, subreddit and constructive analysis of the trade setups for these stocks.
According to a related CNBC article, https://www.cnbc.com/2021/01/27/chamath-palihapitiya-closes-...:
"Instead of having ‘idea dinners’ or quiet whispered conversations amongst hedge funds in the Hamptons these kids have the courage to do it transparently in a forum,” he said. “What it proves is this retail [investor] phenomenon is here to stay. There are 2.7 million people inside wallstreetbets. I think they are as important as any hedge or collection of hedge funds.”
"Palihapitiya claimed the best research on stocks done by retail investors inside wallstreetbets is nearly indistinguishable from the best research on Wall Street. “That edge is gone. Now all of a sudden, retail can be on the same footing and they don’t have to be the ‘bag-holder’ to Wall Street.”
I think a lot of people in this community will be interested in the idea that members of a subreddit can compete with institutional investors when the institutional investors' theses about a stock are either incorrect or so crowded that almost no one can make money trading with the institutional investors' strategy.
At one point Palihapitiya criticized CNBC host Scott Wopner for defending the way things have always been done on Wall Street at the expense of the Robinhood investment crowd. Palihapitiya argues that the Robinhood crowd, the /r/wallstreetbets subscribers, should win and the institutional investment community should lose when the "smart money" gets the trade this wrong.
I agree with him.
I'm a bit of a centrist leaning to WSB:
- I will agree the fundamentals are off. AMC, BB, GS compared to its industry competitors market cap and valuation doesn't make sense.
- Counter to the above argument, it shows the cracks in the system: Many stocks are simply valued based on votes that traditionally has been in the favor of large institutional investors who are also guilty of market manipulation and closer, faster access to new information that the retail investors do not have.
Overall, I am very worried that we are on the final stretch of the equity bubble that started as a result of the Feds printing money, buying up corporate debt, violating the US constitution. We are witnessing a departure from fundamental valuation and straight into a manic stage.
- I disagree that retail investors have an edge in information rather that existing fundamental analysts employed by large firms never had an edge at all and simply a mouthpiece for whatever price is desired by a select group of institutional hedge funds.
TLDR: I am pleased the little guys are winning but also very worried that we are on the final manic phase of a classic equity bubble we've witnessed two decades ago.
edit: HN is throttling my comments after my CNBC video was removed for being a duplicate so to answer:
"Why is it different now we've been in a bubble for the past 5 years"
https://fred.stlouisfed.org/series/MABMM301USM189S
do you see that vertical line right at the beginning of 2020?
that's what is different now. We are now in a bubble withi in a bubble.
I think crypto proved to us that you don't need any sort of fundamentals - price action beats all (and defines the narrative) in the short term. We've also become a meme-based and tweet-based economy (and Donald Trump / the pandemic surely help speed that along)
https://twitter.com/rsg/status/1354513379529027584
And definitely agree. The other famous Chamath video was also great, but this one was just fantastic. Spot on with what's going on.
I also took notes on how effective it can be to remain cool as a cucumber and calmly explain a fundamentally sound mathematical position against an emotional attack.
Note: I also wouldn't be surprised if some smart folks on Wall Street are now doing a clever counterattack where they are going long momentum and the short is a decoy, and then will pull the long profits and then also profit on the short. So I think smart Wall Street money will profit off this more than average retail, but no one will make out better than that reddit user who started the whole thing (forget their name)
"At the close of trading Wednesday, Utah-based Iomega was worth more than Hershey Foods and had twice the market value of Apple Computer."
https://www.deseret.com/1996/5/23/19244215/fools-rush-in-sen...
I think somewhere in this article is where I learned that the stock market is a pretty efficient mechanism of transferfing wealth from the middle class to the rich ...
https://www.nytimes.com/2001/02/25/magazine/jonathan-lebed-s... -- Huh didn't realize this article was by Michael Lewis, makes sense
https://www.nytimes.com/2000/09/21/business/sec-says-teenage...
https://en.wikipedia.org/wiki/Jonathan_Lebed -- wow he was the first minor prosecuted by the SEC!
Just kidding, there's no persuasive argument against WSB.
The people in WSB do know they're playing a wildly risky game. They know it's wild. They know it's gambling. They know there will be bagholders. There were also plenty of savvy people on this early, understanding the bull case that Michael Burry pointed out and the potential for a short squeeze.
It was the hedge funds who went over 100% short who were foolish here, not the momentum trading WSB crowd who helped cause the squeeze.
The interviewer and just about everyone else I've heard are missing the squeeze part of this. Yes, GME isn't worth $20+ billion. But Volkswagen shouldn't have been the most valuable company in the world in 2008, but it was. Short squeezes are just part of the market. Good on WSB for piling in.
Old school view here would probably see classic "pump-and-dump" by the few "leaders" who incited that frenzy. SEC though seems to lag far behind in understanding and dealing with the power of social media.
(Anyway, thanks for the surprisingly nice AMC ride, i happened to have a bit in a gamble that they would survive the lockdown. )
This is growing into a bigger problem. The thought of Twitter influencers (example with E. Musk / Etsy, yesterday [1]) heavily moving the value of stocks with a simple tweet is not really reassuring. The SEC should start investigating properly into it, from personal benefits to bigger company wide fraud, the regulators need to act before this is the new norm.
[1] https://edition.cnn.com/2021/01/26/investing/elon-musk-etsy-...
- https://www.reddit.com/r/Wallstreetbetsnew/
- https://ruqqus.com/+wallstreetbets
- /join ##wallstreetbets on freenode
You cut off the head, a dozen more emerge.
That's my 5 year old understanding anyway.
Perhaps Chamath had reflected on why a celebrity shouldn't be pumping a derivatives trade on Twitter.
Seems like he is riding the FB hate train like any good marketing/snakeoil sales professional would.
Really wish the new tech platforms provide a better soapbox and speakerphone than hacks such as this person. He is simply not worth listening to.
Not saying he is or is not a billionaire but it seems more like a brand that he sells in the way Trump did back in the day.
He doesn't usually have any deep insights when I listen to him talk.