Stop the game, I want to get off
Meme trading is killing the market
- Dateline
- 27 February 2024
Over time, financial markets have become increasingly sophisticated, offering far more than stocks, bonds and commodity futures for investors and traders. Now we have derivatives, ETFs, funds of funds, as well as cryptos, crypto funds, and shorts and calls on everything you can imagine – even the national debt of sovereign countries. It’s become a giant digital casino, with its own betting rules.
The masters of the game used to be the hedge funds. They had deep pockets and clients who could afford to take ‘insane’ risks for possible outperformance. Hedge funds typically underperformed when markets were rising, but in turbulent, chaotic cycles, they usually won when others lost. Volatility was their friend, and they became a powerful force.
There were lots of rules against insider trading and other unsavoury practices, but everyone knows that the small-time investor is always at a disadvantage. The insiders have superior information, and collusion can happen, secretly. Despite the oversight. And analysts and influencers always make ‘full disclosure’ to claim they’re not manipulating the market.
But gamers and cyberpunks are under no such obligation. They’re allowed to ‘dis’ companies or talk them up at will. Hey, they’re not part of the system! And if they decide to rally around some lame-duck stock that the hedge funds are trying to kill off in the name of trading profits, who’s going to stop them?
All it takes is a popular meme to go super-viral, and the next thing you know, all wallstreetbets are off. It’s called the ‘meme squeeze’ and hedge funds have been licking their wounds since the GameStop fiasco. “We have painfully learned that social media memes can matter more for share performance than actual financial metrics,” Barclay’s analysts confessed.
It’s like the Arab Spring or a brand army, only it’s all about boosting or killing companies on the market. The new investment oracles are found on Insta and Reddit, not the business network channels.
It’s a new game, and the gamers are masters at it. If you can’t figure it out, it’s time to leave, because it’s not going to stop!
Links to related stories
- Wallstreetbets – Reddit
- WallStreetBets is America – Vox, 4 February 2021
- Barclay's Analysts Bet Tesla Stock Is Being Propped Up By r/WallStreetBets – Gizmodo, 23 February 2021
- MINDBULLET: Wall Street hears the closing bell – for the very last time (Dateline: 15 March 2016)
- MINDBULLET: Long bond collapse triggers US$13 trillion trading losses (Dateline: 19 August 2019)
Warning: Hazardous thinking at work
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