The WSB moderators really did everyone a disservice by letting obvious misinformation flood the subreddit. It’s hard to view the later stages of the GameStop phenomenon as anything other than a Reddit-fueled pump and dump scheme.
The past few days they've shared not only the largest long holders of these stocks, but also the pension funds that were boosted as well. A few teacher pension funds got a good uptick and they were sharing that around.
The cats at wsb might be self proclaimed retards, but they're not that stupid. They know lots of other folks are going to make money off of them. You know, if you actually visit the sub, you'd know that.
The sub you seem to like so much died last week. Whatever is left of it has been diluted when literally millions of people flooded it. "Eternal September" hit them hard.
Right now it's filled with Q-level conspiracy theories, they parrot each other's talking point without understanding any of it ("short ladder" being the most funny and telling example of this). I can assure you that the vast majority of these people are wildly clueless about what's happening right now, they just keep telling each other that they're going to be rich.
Look at this nonsense for instance: https://www.reddit.com/r/wallstreetbets/comments/lboqwm/yet_...
Admittedly there are a few voices of reason being upvoted in this thread, but they're still hidden underneath the baseless "hype" claims.
I've been subbed to WSB for about 5 years, ever since someone at work (prop trading) mentioned it as basically being a bunch of 25-30 yo finance people hanging out and doing dumb shit in their personal accounts for fun. I'll admit, I did some dumb stuff myself, trying to time UVXY/TVIX plays. (Basically netted 0 of course). But it was fun to shitpost about it. This is astrology for finance bros.
And it'd been going a bit down-hill already, but most people were still that same description: young blood, day job in finance, knows what they're doing at both a mechanical and risk level, etc. And the content reflected it.
Then somehow, one of those internet things happened. WSB became a hit, people flooded in, the mod team was overwhelmed, media attention flooded in making everything worse, etc. I feel like this is what a lot of /r/the_donald people ended up now that they're looking for a new cause. So much of the rhetoric I saw once the WSB Old Guard had been overwhelmed mirrored the kind of stuff you saw out of the_donald back in 2016.
But yeah, a lot of the comments are just one liner garbage memes: HODL! TO THE MOOOOOON! FISTS ON CHEST NO FEAR! TO VALHALLA! DIAMOND HANDS! As well as echo chamber "encouragement" to HODL! until $1000/$9000/the moon because Mark Cuban is on our side!
From what I’ve seen thus far is the media trying to use the Q / Trumper angle against this community to tarnish its public perception and recent novelty.
I am happy to be proven wrong though, I just don’t see it.
They push a lot of very strong and completely unsubstantiated conspiracy claims in particular, and they'll quickly accuse anybody dissenting of being a shill or having an ulterior purpose.
Here's a good example I think: https://www.reddit.com/r/wallstreetbets/comments/l93d18/gme_...
This is good OG WSB content, written by one of the users that was in on the play from the very start.
But there's the problem: since he knew what he was doing, he managed to sell at the right moment and make huge benefits. That doesn't fit the narrative nu-WSB wants to push. So this very good old-school WSB post can't even get half a thousand upvotes.
Meanwhile post some vaguely conspirationist anti-wall street article and skyrocket to the top of the frontpage.
So yeah, it's not The_Donald, but there's definitely this strong anti-system, populist, "everybody is out to get me" conspirationist, fact-adverse mindset that you find in these types of communities.
Note in particular that, somewhat ironically, WSB calls itself "4chan with a bloomberg terminal", so it seems fitting that it's following a similar trajectory of ironic edgyness turning genuine as new people get in and take it at face value.
He is one of the few people that used a LIMIT order.
That said, there are sure to be a large portion of "the right", on the sub, as the fact of the matter is that a significant percentage of the US is!
As for what caused the influx, I think you can blame reddit for getting rid of all the edgier communities, and lots of people like that sort of thing, so over the years as a wsb post hit /all the numbers would jump because people would say " hey, I like this place, its edgy and self-deprecating" and over time it changed the demographics. I think back then though people mostly lurked, this influx has caused a lot more mime-posting.
I'm seeing it implied fairly regularly here and on Reddit that journalists are somehow anti-WSB, but I just don't see it, and I don't know why it would ever be the case.
Maybe people are mixing up market analysts (who work for financial institutions) with finance journalists (who work for news organisations)?
Maybe people think journalists are afraid of losing valuable sources in big banks if they don't denigrate the day traders (even though all those big firms also made a fortune in this mess)?
What am I missing?
Even if the userbase is bipartisan these extreme, emotional takes are guaranteed to take over by sheer volume unless the moderation steps in hard. I can't really blame the mods for failing to do that at the moment though, if I were them I'd probably have closed the sub temporarily...
Just as an illustration, a number of /r/wallstreetbets/ subscribers:
26/1: 2,390,238
27/1: 3,336,749
28/1: 5,036,912
29/1: 6,317,967
30/1: 6,965,330
31/1: 7,508,966
1/2: 7,977,780
2/2: 8,278,750
3/2: 8,427,584
(via https://archive.md/https://www.reddit.com/r/wallstreetbets/ )
I think the point being made here is that the whole narrative of "average people beating wall street" is pretty naive and quite bullshit. All in on, maybe a few handful of people got 10x or even 100x their money, but most of the gains were most likely made by hedge funds and with the exception of one or two hedge funds who were squeezed, the majority of losses will probably be by average people.
Even if that fabled squeeze was to take place I'm sure many of them would still be left holding the bags because they wouldn't know when to sell. And again, at this point I'm really not sold on that squeeze theory at all, it seems very plausible that it ended last week and now we're just seeing a good old pump-and-dump taking place.
In the end some people are going to be very lucky and some others are going to learn a very expensive lesson about the dangers of gambling.
Can you provide a single case of someone losing their entire life savings by YOLOing it on GME at the top?
> The Reddit poster Volkswagens1, who declined to give his name but said he lives in the Pacific Northwest, showed The Washington Post an image indicating roughly $400,000 in potential GameStop losses from the day but insisted he would not sell.
> He said he’s poured most of his saving and checking accounts into the stocks and spent the last week “doing as much research as possible,” including sacrificing sleep and calling in sick to work, to make sure he was staying on top of the market’s moves.
(There's also a quote about him doing this because he's been poor for too long, but my take is that if you have enough assets to face a $400k loss, you weren't poor before you entered that position, even if you may now be).
It’s not clear to me this has sunk in w ‘Volkswagens1 nor the loss has really been faced. I’d bet the sober second thought will come after this article was published
Still not a great move to dump your entire worth into meme stocks.
That could be a lot of money to him, but it is not a lot of money compared to what an average worker earns in a year. A probably-young guy losing $6k on a risky stock bet is not life-destroying.
Also, depending on when he bought he could actually be up. And even if he bought at the top, it would still be worth something like 40% of that.
[0]: https://www.reddit.com/r/PersonalFinanceCanada/comments/lavx...
A 21-year-old soon-to-be software engineer losing $25k is not a life-changing tragedy.
That's kind of worse than YOLOing your life savings, because if this prevents them from continuing their education, it just fucked their life.
Most of "average people" entered at or near the top. The ones that did not were so engaged in gambling that they did not sell when it did 20x return. Call it what it is: fear of missing out.
Even DeepFuckingValue, who sold at least some of this position and netted a lot of money after taxes was not smart enough to say that 20x return in a few months is a time to pack the toys and go home so he could fight another day, leaving millions on a table in a futile hope that it would do much, much better.
Better to take $15M of profit than to gamble $35M on the SEC deciding not to prosecute.
Especially when the newspapers decided to plaster his real identity all over the place.
Let's hope that Congress doesn't try to bail these people out!
(Ontario Teacher’s Pension Fund sold almost 25M shares, for example https://www.bloomberg.com/news/articles/2021-01-29/reddit-fe...)
Without knowing when they entered their position. It was hovering around $4 for a long time last year.
Even if they bought in at $5, selling at $20 is absolutely a win. Yes, they could have gambled and HODL'd, but there's no reason to gamble after seeing a 4x increase on a stock very few people expected would ever break $10.
Pensions dont make short term investments, they already had GME shares since a long time ago. They do sell when extraordinary circumstances happen and buy other stocks to hold long term again.
The sub count increased 8-fold. Any prior culture it had has been overwhelmed.
I'm not sure this part is needed for you to convey your point.
The Ontario Teachers Pension Plan, who was holding GME, is one of the largest hedge funds in existence, worth over 200 billion dollars. For comparison, Maverick Capital is worth only $15 billion. That is not a case of some little guy teachers making out well, it is the rich (if not the richest) hedge funds getting richer.
That is what the OTPP does. That the hedge fund exists to fund pensions is irrelevant. If you dig into the investors behind other funds, you are likely to find that they are also investing to help fund their own retirement.
OTPP is a pension fund. Hedge funds are a different beast.
https://www.otpp.com/investments/performance/investment-stra...
"Additionally, we complement our efforts by using external hedge fund managers, which gives us access to unique approaches that both add performance and diversify risk."
OTPP invest in hedge funds. But they aren't one themselves. Hedge funds are a specific creature. Legally. And in terms of how they trade.
The political opposition to hedge funds has to do with the fact that they often cater (or are assumed to cater) to the 1%. Who cares if it is 200B? It probably represents the financial interests of tens-of-thousands of teachers.
They are the 1% you are talking about. I expect what you're really saying is that the political opposition opposes strangers who are perceived as being different, whereas the top 1% comprised of teachers are relatable and maybe even your close friends so you can be happy for their success.
The Ontario Teacher's Pension Fund averages member 600k per member in assets (200B divided by 330k members). I don't know the Canadian stats but having around 1M in assets as a 60 year old places them around the top 20% or 10% cut-off - not the top 1%.
https://dqydj.com/top-one-percent-united-states/
Regardless, I don't care if people get rich but it is clear that occupy Wall Street was a movement against the perceived notion that billionaires were exploiting the rules - not that teacher's pensions funds were gaining 2% per year more than an index fund.
That we agree on. Just like the OTPP has been known to do.
https://financialpost.com/news/fp-street/ontario-teachers-pe...
This isn't some teachers trying to eek out a retirement. It is one of the most prolific hedge funds in existence. They are literally what the movement was against, but the movement only served to help them.
Not that I expect anyone thought that they were buying up shares from retail investors to put the movement in motion. They had to know they would help other funds to hurt the one fund being targeted. It shouldn't surprise anyone that hedge funds have made out like bandits in this.
John Simon's personal $1B fund is far more rich than a 10000-member $100B pension fund.
Well, on the flip side a lot of redditors learned from the school of hard knocks, which is the best teacher in a lot of ways. Moderators suppressing posts won't teach a lesson you can only learn by losing money.
It’s extremely difficult to find any posts or comments critical of GameStop in the sub right now. If you sort by new, the critical comments are quickly removed.
Moderators aren’t just letting Redditors figure it out. They’re shaping the conversation into the illusion of a consensus.
Edit: looks like emojis are stripped
But maybe non frontpage posts are better.
We remove far more pro-"meme stock" content than anti-"meme stock". Your anecdote is just that, a single data point. All you need to do is pull the data yourself and you would see that, but instead you are taking personal offence to your content being removed.
At this point, almost all content that is removed, is done automatically, either using Reddit's crowd control algorithm, or using our (countless) content flags.
We also revised posting requirements countless times. You may very well have been cleared to post yesterday, but not today.
If you are willing to post your username, I can look into it for you.
The past two weeks were very difficult but the entire moderator team has stepped up to the challenge, in particular u/zjz.
Unfortunately, the stress of moderation continues even away from reddit. Even during social events at work, WSB comes up frequently. Personally, I took a few days off.
Sure, there's a large contingent that denies this and holds onto their wishful thinking of a $10,000/share price, but you can't fix stupid.
They seem to monitor this threads on HN and downvote anything that doesn't fit their HF "deep state" narrative.
OR its likely that "smart" HN users bought into the hype and they are fully bought into the narrative that blames external factors than their own due diligence.
I skimmed your comment history. Many of your comments are creating narrative from thin air - no different from the worst Qanon offender where there might be some fact but your spin is not. Tying in political arguments (like I just did) is also poor form IMHO. Many of your comments mention downvoting, which is a seriously bad smell to me. At the level of an individual comment, mentioning voting is usually an automatic downvote from me, and I presume others. Relevant HN guidelines: “Please don't comment about the voting on comments. It never does any good, and it makes boring reading.”, “Please don't post insinuations about astroturfing, shilling, brigading, foreign agents and the like. It degrades discussion and is usually mistaken. If you're worried about abuse, email hn@ycombinator.com and we'll look at the data.”
Edit: I am not saying your comments lack truth, I am just saying that it matters how you write it down.
That seems very risky. The mods are certainly identifiable, and the SEC will be investigating.
However, when to they’ve become completely invested (some times literally) in the narrative that GME was going to make them all rich while the hedge funds went bankrupt, it’s difficult to admit that they were wrong.
And if you think that these firms weren't already feeding every single post and comment on reddit into their HFT algorithms, you better at least believe that after this whole thing, they're gonna be doing that, and adding some extra weight to `if subreddit === "wallstreetbets"`.
From that point of view, WSB is rather icky; its people who know what they're doing (most of the time) subtly and anonymously impersonating an idiot to influence the actual idiots.
At most that’s the first or second “Why?” but there is surely a deeper issue.
I have no doubt there exists someone who was ruined by 2008, but most prudent blue chip investors were not.
Participants will willingly acknowledge that the behavior is destructive or reckless. But they do so in a way that glorifies it. "Woah, I totally blacked out again last night. So crazy. High Five". When the most self-destructive member receives the most attention that acts as a pretty powerful incentive.
Humans are social animals. And the way most of us avoid bad decisions day-to-day is to look at our peer group and think "would this be something that a normal, respectable person would do". When you create a subculture filled with self-destructive people, it normalizes and encourages self-destructive behavior, even when people rationally know they shouldn't be engaging in it.
Honestly lots of investing communities are like this - do your own due diligence, etc. It is surprising how _much_ misinformation is being spread in WSB as of late, and feels like a weird cult more than ever, but WSB was never about heavy moderation.
There are a very select few retail investors that really made a lot of money from this hype.
There were a TON of professional traders that probably thought this was like shooting fish in a barrel.
I suspect they didn't do a disservice to their own bank accounts. Random internet strangers care as much about you as do politicians and hedge fund owners.
As if "Wall St." is one giant conspiracy. What happened to criticizing "Wall St." for treating the economy like a casino and driving the stock market into a giant bubble? Where are all those complaints about how "Wall St." is recklessly risking our retirement accounts? The contradictory conspiracy theories are astonishing.
But I worry that like a lot of heated populist rhetoric it is misguided, or even entirely dishonest.
We just went through a presidency with someone who loved populist rhetoric, but whose actions were anything but. It happens a lot sadly.
My pet conspiracy theory is that WSB is just a cat's paw for another hedge fund that saw an opportunity to make money and wanted to try out a new approach.
As to the scam aspect, I give it a 50/50 chance that someone saw an opportunity to pump-and-dump some symbols with very high short interest. I doubt it was a hedge fund, it was probably an individual, probably someone living outside the reach of US law enforcement. The alternative is that a bunch of idiots actually came up with the idea that they could take on "Wall St." and managed to trigger a short squeeze, many of whom have yet to realize that the party's over.
Many other scams (or, for example, theft and robbery) destroy value (as, for example, a stolen wallet is a much bigger loss to the owner than it is a gain for the thief). Or, say, the 2008 GFC made a few people extremely rich (unscrupulous mortgage peddlers, investment bankers creating "complex, highly leveraged, exotic trades [...] without necessarily understanding all of the implications of those monstrosities", etc.), while wreaking havoc orders of magnitude greater on the entire world.
I don't see why everyone is against pump and dump schemes yet the system is literally designed for them to happen. It's an inevitable fact that they will happen when you set up a free market and a bunch of (stupid) humans from the general public, as also clearly demonstrated in the crypto scene.
If people don't want them to occur, the short-term incentives, market, and exchanges themselves need to be re-structured in a way such that takes into account what a group of humans with free communication would do.
Markets exist to solve problems of valuation and capital allocation. Pump-and-dump schemes distort valuations in very extreme ways and work against the purpose of equity markets. That is a basic reason why they should be banned. Another reason is that scams introduce unnecessary risk to someone making an investment decision; ideally investors should only focus on risks related to a company's business, not the risk that the information they were given about that company is false. The extra risk will drive away investors and the result will be less capital available to otherwise promising ventures, which again works against the goals of capital markets.
It is not really possible to restructure markets in a way that would avoid pump-and-dump schemes, because the problem with a pump-and-dump scheme is not actually related to the rules governing the market. The problem is that the pump-and-dump scheme involves deliberately spreading false information; yet it is equally possible that investors hear true information and rush to buy, and the market should allow for that situation.
It's because we base pricing based on a simple free market order book algorithm.
If the markets enforced a pricing algorithm that included certain time-based functions instead of basing it purely out of the order book, and mandate that all transactions happen at the algorithm's determined price (instead of the free market price), a lot of problems including pump-and-dump schemes and insider trading could be theoretically eliminated. We could completely legalize insider trading, for example, if we technologically mandated that large orders took weeks to execute while single shares traded in milliseconds.
(I'm an engineer, not a financial expert; I view this problem as very similar to e.g. API limits and firewalls that implement rules to prevent abuse.)
How would an algorithm determine the price? The whole point of the equity markets is price discovery. The price should rise when people rush to buy, and it should fall when people rush to sell. In many cases that is the "right thing," in the sense that the rush to buy/sell is in response to a real change in a company's circumstances (e.g. an outstanding earnings report, a natural disaster that harms the business, etc.).
Limiting the execution of a large order would not stop insider trading, because you do not need to go to equity markets to buy/sell stock -- you can enter into a private agreement with someone to transfer shares in exchange for money. Limiting large order executions would also make index funds impossible -- index funds have to trade the stocks that make up the underlying index when customers buy or sell, and a large fund may have many individual customers buying or selling on any given day.
Not all problems can be solved with technology.
Except for the HFT firms and market makers, who basically own the Robinhood flow and who thrive in foolish volatility. Guess who's paying so that r/WSB bros pay zero commisions? It's not the Red Cross.
Everyone knew who stood to gain and who stood to lose in the short squeeze.
WSB crows was going after the short squeeze, anyone that got gains just rode the wave and knew when to step off or not.