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.
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?
“So far” is carrying a lot of weight here.
The whole metaphor discounts the "I just want the shortsellers to burn b/c anarchy" aspect that some people are claiming, which honestly I think is believed by very few and projected onto many more who really just want quick money.
It would start with a small group of players convincing a bunch of casual players to join their clan and buy out as much of the supply of a specific item on the market as they could. They claimed if everyone held on to the items for two weeks the price would rise and they'd all get rich.
Of course, the leaders would then sell their items one week in. This would cause the price of the item to drop, resulting in the other members of the clan panic-selling all of their items. The price of the item would then crash resulting in most players losing their money.
Eventually the game developers made the organization of such clans a bannable offense since too many casual players were losing a lot of their wealth participating in these events.
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.