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Comment by jboog | Hacker News Reader

If you read some of the posts on WSB a huge number of people just really have no clue about capital markets, investing, or basic business sense.

I don't know how many times I saw people claiming GME would go to $1000 because the new CEO has a brilliant new scheme to turn the company around by going digital! Why "going digital" in 2021 means your company is worth 100X what it was a few months ago I'll never quite understand. I guess no one had yet discovered the opportunity of these computer machines and the World Wide Web!

Or "it's the short squeeze" By people who didn't even know what a short was 72 hours before, long after the shorts had covered their positions.

Sure some people acknowledge they are essentially gambling in equities, but tons of people truly think they have some stunning insight into a business because of some anonymous WSB shitpost they read this morning.

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Would you say those same people who just learned the phrase “short” or “short squeeze” are likely the same kind of people going to the casino and thinking they can successfully count cards?

As mentioned elsewhere in here, it’s ultimately gambling. It’s putting money up, exposing it to risk that could completely wipe you out. If someone doesn’t understand that about stock investing, I think they’re very similar to someone not realizing a casino could wipe out your money. But making sure everyone fully understands this - educating people who are risking money - certainly seems like a thoughtful thing for countries to incentivize.

But unless all the financial websites have to be styled to look like a casino, or areas of a physical bank space put up neon lights and blinking signs to emulate Vegas casinos, I don’t know if we can ever drive the point home clearly enough.

RobinHood is styled like a gambling app. That doesn't put people off; more the reverse.

Yeah, I agree it's totally gambling.

There's also the thing where buying equity in a company can seem very simple because you see something like Apple where they made a cool thing and obviously their stock went up. People just have no idea about how complex the markets are.

They also don't remember the very smart people who claimed the Iphone would be quickly overtaken by Android and other cheaper alternatives (Clay Christensen predicted this a guy generally very smart on tech/business)

Hindsight always makes it seem like it was easy to pick the great companies that were OBVIOUSLY going to do well.

They don't understand how incredibly sophisticated professional investors are who dedicate their lives to it, and on average even THOSE people don't 'beat the market'.

But people should be allowed the freedom to choose to gamble. Even if it's bad for them - as long as they own the responsibility, and not create a burden on soceity for doing so.

Bit of a tangent, but: it’s absolutely possible to learn a relatively simple card-counting system and play with positive expected value in a casino. You can easily run simulations to prove this.

I think this reinforces the GPs point. It's not all that hard to learn some basic card counting but probably 99% of people who try it casually end up playing a -EV game, due to the fact that the edge is very small and requires practicing/playing with much more discipline than most people want to bother with.

> Why "going digital" in 2021 means your company is worth 100X what it was a few months ago I'll never quite understand.

Understand it or not, it happened. Going from $3 to $300 in under a year.

Just because some people stated seemingly silly reasons for their predictions doesn't mean everyone betting on it is stupid. They may be trying to encourage others, have an intuition, hope to detect the peak and quickly sell, or even not care about money and be playing it as a game. But at the end of the day, whoever makes money is not the stupid one. Today GME is $250. Plenty of them can be getting rich now.

I have a thought that understanding how the stock market works doesn't matter much. Most of the knowledge from that is already bakes into share prices and the movements are pretty much random. So you very well could win by not knowing what a short is.

The market cap multiplied 100X, but whether the company is actually worth 100X is a different question.

So just to get this straight, you think that GME stock went from $3 to $300 because of productive business decisions alone?

That someone can get rich gambling is not some new insight!

Most of the WSB equity analyst is the equivalent of the blackjack player sure he's going to win it big because Mercury is in retrograde!

> whoever makes money is not the stupid one

Errr.. this doesn't follow at all.

Plenty of people get lucky by winning the lottery. This doesn't make lotteries a smart investment in general (and yes I'm aware of some exceptions to that).

Getting in on the GME short squeeze was smart.

More than that means you are thinking there is something other than the short squeeze going on. There doesn't seem to be much evidence for that.

I'm sorry for being rude, but that's sounds like what people who lose all life saving said...

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