On the Streets: Capitol Hill

Warning - this post is heavy with parentheticals...

I am fascinated by the Game Stop short squeeze. I remember weeks ago seeing Game Stop references. Like a lot of people, I wasn't paying attention. But once I started reading that retail investors were costing hedge funds billions, I started looking into it. It's incredible (of the neutral awe variety of incredible).

There are a lot of new multi-millionaires in America. Many of them are very experienced investors. Some are savvy amateurs who realized that investor deepfuckingvalue was onto something when he pointed out that the short positions in companies like Game Stop left hedge funds very exposed to a short squeeze. I thought I was fairly well-versed in the basics of the market, but the past few days has been an education. I don't know anything about the market.

I'm a believer in the idea that the house (almost) always wins, so I'm worried that some small investors are going to lose their shirts and be left with a bunch of tulip bulbs. There's a reason that there's a revolving door between the USG and Wall Street, and that people like Treasury Secretary Yellen get paid millions for speeches. (Same criticism for the men. This is one area where we should not let the WH Press Secretary distract us with claims of sexism. The DC - Wall Street corridor is a racket.)

It's worth reading about. This The Verge article seems like a decent place to start. There are going to be books and movies about wallstreetbets, the short squeeze, robinhoodapp (oh the irony - the folks behind that app aren't hiding out in Sherwood), and mega hedge funds. I don't think we'll really understand the ramifications for months.

I joined reddit to read the wallstreetbets timeline or threads - I don't know anything about reddit. It is a fascinating mix of savvy investing knowledge, bro humor (often crass and homophobic), and brinksmanship. Granted, I only spent a few hours on the site, but I got the sense that some of the vocabulary and vulgarity is theatrical (not excusing it) - it's like watching an over the top Tarantino film or Ben Affleck in Boiler Room. There's some choreography to it. Many of the posts lead with complex market information; the posts close with self-deprecating claims - "I'm just an idiot and this is not financial advice."

I read that reddit's numbers have surged along with the stock prices. Understandably, there now seems to be concerns about infiltrators. I saw a few posts cautioning people to check how long a poster's account had been open, how many followers they had. It reminded me of the spot the troll efforts on Twitter.

I'm too old and dumb to wade confidently into those corners of the world, but I'm glad I took a closer look. If possible, I may buy one share of Game Stop and one share of AMC to see where this roller coaster goes. I view the current circumstances as gambling, not investing. That's not a swipe at the original idea or the execution. That was genius and took a deep understanding of the financial markets. But Game Stop is not a $300 / share company. This is high stakes who blinks first poker.

Hmm, I didn't really intend to write that much about the short squeeze. I was going to mention it and then post some random Capitol Hill photos. I know Capitol Hill much better than I know financial market intrigue. But we did have a Game Stop on Broadway. I am going to walk over there tomorrow to see if they're there or if I'm having suburban mall flashbacks.

More places on the Hill have opened up. I think on Monday restrictions are going to be relaxed further. Mixed feelings about that. I'm happy for the businesses and employees, and I know the initial intent of various lockdowns was to flatten the curve. But I worry that maybe, with the roll out of vaccines and the threat of some mutations, it might have been better to figure out a way to hold off for another couple of weeks. Easy for me to say, I know, and people are tired of the constantly moving "the next few weeks will be crucial..." It's like having Thomas Friedman as governor.

I hope you're doing well, Don't bet the farm on Game Stop. I'm sure it's a great company, but trends don't line up well for small brick and mortar shops selling games and toys. If you dive in, think Vegas - only bet what you're prepared to lose. (We could all buy a share of AMC and talk about the experience.)