Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Why I joined the online army taking on the hedge funds

Why I joined the online army taking on the hedge funds

I spent most of last week drenched in sweat, launching a vicious assault on Wall Street hedge funds which cost them $20 billion. Along with thousands of other ‘degenerates’, I bought shares in GameStop, a struggling videogame shop whose value has recently soared by 2,000 per cent.
Behind the surge is an online community called WallStreetBets, where bored young men gamble on barely researched stock tips and crack tasteless jokes. The community, which lives on the social media website Reddit, has a history of hilariously aggressive stock-market bets. In 2019, for example, a 19-year-old member made $700,000 and then lost it all again within two weeks.

Last week WallStreetBets became global news. You’ve probably read about it by now: the forum’s members have driven GameStop’s price up by buying masses of shares, inflicting huge damage on the hedge funds who were betting against — or ‘shorting’ — the company’s prospects. The WallStreetBets board is now deluged with ‘gain porn’ —  screenshots of trading accounts showing enormous returns, though real WallStreetBets addicts seem just as happy posting ‘loss porn’ when things go wrong.

The most famous winner is a man named Keith Gill, who goes by an obscene moniker on WallStreetBets and is known as ‘Roaring Kitty’ on YouTube. At last count, his initial $50,000 investment had returned $36 million. He’s cashed out a third of it, but the rest is still in play. Gill is a 34-year-old father who works in insurance and dresses like a teenager: aviator sunglasses, sweat bands on his wrists and a bandana. As he passed the $10 million mark, he celebrated by dipping some fried chicken in a glass of prosecco.

Smaller wins have been life-changing, too. A member called llweasel told me he made $35,000 which he will spend on a custody battle for his daughter: ‘I started stock trading to be able to afford a lawyer as my ex has an expensive lawyer.’

When I revealed to a trader friend that I’d joined the frenzy, she told me: ‘GameStop has been the bane of my life for the last two weeks.’ Another friend in finance said his superiors had quietly banned the topic. Others lamented the fact that regulations stopped them joining in themselves.

But for many of us, the mania proved irresistible. As GameStop’s price soared, and the craze spread to other unloved stocks like Nokia and BlackBerry, the fear of missing out became overwhelming. I heard one successful banker say he was buying Nokia shares because he ‘liked their 5G strategy’. Course you do, mate.

As the price of GameStop swung wildly, it became impossible to do anything other than glare at the screen and chew gum ferociously. When the price tanked on Monday, I sold in a panic, making a £400 loss. Almost immediately, the price shot back up. The next day, I went straight back in and I’ve been holding on for dear life ever since. The US markets open at 2.30 p.m. GMT, and for the next six hours I do nothing except watch the price while texting friends who are doing the same.

I am a textbook example of the brainless amateur investor. When the price is falling, I only think about getting out. When it’s rising, I scold myself for not buying more. That’s gambling for you. The whole game is pure speculation. Some people may have got into GameStop at the beginning because they spotted some ‘deep value’ in this declining company, but we are now long past that point. Prices are driven by hype: on Reddit, then in the media, then by the actual increase in price.

Traditionally, these scenarios have not ended well. And the risks amateur investors are taking are pretty scary. On WallStreetBets, you’ll see many examples of people betting their entire life savings, maxing out credit cards or taking out personal loans.

One user, Volkswagen1 (gains: $540,000) tells me: ‘I liquidated everything. I don’t have a penny to my name any more. I sold my silver and gold collection. I sold my Bitcoin. I sold my other stocks. I put mortgage payments, savings, checking, and my spare change jar money into this. I skipped meals so I had extra money to put in. I’d sell my cat for extra GameStop shares if someone would buy it. Do you want a cat?’

In fairness, Volkswagen1 seemed willing to accept the consequences. He also had a logical exit strategy. A lot of other users had a similar attitude: they had aggressively bet on a rare opportunity, got lucky and were enjoying the ride. Which is about as healthy as your attitude can be if you’re piling your life savings into a videogames shop which Wall Street thinks is worthless.

Others should not be in the casino. This week a post appeared from a user called Hyre, titled: ‘Hi, I’m back. You may remember me from such events as gambling away $7 million.’ It begins: ‘I’ve been to rehab, I’ve lost custody of my kids, lost my house. However I still found a way to play.’ He then announced he is holding $15,000 of shares in GameStop plus a $50,000 bet on silver prices.

If ever you wanted a sign of market mania, the ‘irrational exuberance’ which precedes a crash, surely the GameStop saga is it. It’s reminiscent of the dotcom bubble; comparisons have also been made with the Dutch tulip bubble, which was started by bored men playing a drinking game during a plague.

The problem for participants, of course, is how the hell you cash out. At the time of writing, the price was crashing. I’m still holding two shares, and I’m down about £400. So how do we get out? The original plan was to ‘squeeze’ the hedge funds until they dropped their bets against GameStop, which would in turn push the price up further. There was talk of this driving the price past $1,000 per share, or even higher. But it looks like the hedgies have given up.

A lot of people have been quietly cashing in. Others are adamant that the price is still going up. One user showed me his sell plan, which saw him dump his holding at stages from $1,000 to $250,000. I was curious about what he’d do if it never reached those heights. ‘Make a new plan. Or I’m screwed,’ he told me. I encouraged him to make a new plan. As for me, I’m getting out. Anybody want to buy some silver?
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
The Country That Got Too Rich? Public Spending Dominates Norway Election
EU Proposes Phasing Out Russian Oil and Gas by End of 2027 to End Energy Dependence
More Than 150,000 Followers for a Fictional Character: The New Influencers Are AI Creations
EU Prepares for War
Trump Threatens Retaliatory Tariffs After EU Imposes €2.95 Billion Fine on Google
Tesla Board Proposes Unprecedented One-Trillion-Dollar Performance Package for Elon Musk
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
Big Tech Executives Laud Trump at White House Dinner, Unveil Massive U.S. Investments
Tether Expands into Gold Sector with Profit-Driven Diversification
‘Looks Like a Wig’: Online Users Express Concern Over Kate Middleton
Florida’s Vaccine Revolution: DeSantis Declares War on Mandates
Trump’s New War – and the ‘Drug Tyrant’ Fearing Invasion: ‘1,200 Missiles Aimed at Us’
"The Situation Has Never Been This Bad": The Fall of PepsiCo
At the Parade in China: Laser Weapons, 'Eagle Strike,' and a Missile Capable of 'Striking Anywhere in the World'
The Fashion Designer Who Became an Italian Symbol: Giorgio Armani Has Died at 91
Putin Celebrates ‘Unprecedentedly High’ Ties with China as Gazprom Seals Power of Siberia-2 Deal
China Unveils New Weapons in Grand Military Parade as Xi Hosts Putin and Kim
Rapper Cardi B Cleared of Liability in Los Angeles Civil Assault Trial
Google Avoids Break-Up in U.S. Antitrust Case as Stocks Rise
Couple celebrates 80th wedding anniversary at assisted living facility in Lancaster
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
The White House on LinkedIn Has Changed Their Profile Picture to Donald Trump
"Insulted the Prophet Muhammad": Woman Burned Alive by Angry Mob in Niger State, Nigeria
Trump Responds to Death Rumors – Announces 'Missile City'
Druzhba Pipeline Incident Sparks Geopolitical Tensions
Cost of Opposition Leader Péter Magyar's Economic Plan Revealed
Germany in Turmoil: Ukrainian Teenage Girl Pushed to Death by Illegal Iraqi Migrant
United Krack down on human rights: Graham Linehan Arrested at Heathrow Over Three X Posts, Hospitalised, Released on Bail with Posting Ban
Asian and Middle Eastern Investors Avoid US Markets
Ray Dalio Warns of US Shift to Autocracy
Eurozone Inflation Rises to 2.1% in August
Russia and China Sign New Gas Pipeline Deal
Von der Leyen's Plane Hit by Suspected Russian GPS Interference in an Incident Believed to Be Caused by Russia or by Pro-Peace or by Anti-Corruption European Activists
China's Robotics Industry Fuels Export Surge
Suntory Chairman Resigns After Police Probe
Gold Price Hits New All-Time Record
UK Fintechs Explore Buying US Banks
Greece Suspends 5% of Schools as Birth Rate Drops
Apollo to Launch $5 Billion Sports Investment Vehicle
Bolsonaro Trial Nears Close Amid US-Brazil Tension
European Banks Push for Lower Cross-Border Barriers
Poland's Offshore Wind Sector Attracts Investors
×