The money-humping greedheads over at Wall Street should have learned their lesson with Tesla. Elon Musk can bend gravity with a mere whisper. I watched in August of 2018 as the infamous "Am considering taking Tesla private at $420. Funding secured." tweet sent my $280 shares to $400+ near-instantaneously. Then the SEC stepped in and punched him square in the nuts, sending the price back to earth. The Short Bus crew on Wall Street smelled blood in the water; "At any minute, he could sink the stock with a rogue tweet," they thought, adding "the fundamentals just aren't there." So they bet against Musk by shorting Tesla, and they lost. He's a sorcerer of public opinion, yet still they short.
But what does that have to do with Gamestop? In 2020, short sharks went on a pandemic feeding frenzy. They had already made $344 billion shorting on the pandemic by March 21, 2020. They wanted to watch the world burn; never waste a good crisis. And now in 2021, when big buffalo like Macy's and JC Penney are practically extinct, they're on to smaller game - who else can I bleed. Because Gamestop trades in primarily digital assets and is saddled with an expansive retail footprint, it appeared to be the next perfect target.
But they didn't count on the Rain Men over at r/wallstreetbets to simply say No, and establish a viral Wall of Ignorance. Buy and hold. This offends the sensibilities of the Wall Street Old Guard. Buy low and sell high is the law of the land, while the little guy says "take my money" and "thank you for the opportunity." This is how money is printed. But Buy and Hold caught on, and caught a lot of media attention, causing more Buying and more Holding.
The financial pundits tried Fear when they said Buy and Hold will leave you holding the bag; then doubled down with Empathy and Guilt when they said Buy and Hold will decimate granny's pension. They're kind of right. Buying and holding this one stock is causing a ripple effect. My own account is down about five points this week because the hedge funds who banked on printing money by shorting Gamestop to death have had to sell their long positions in staple stocks to cover the vig, thus dragging down the whole market (read: the hedge funds and other short sellers have assumed ludicrous risk on behalf of the whole market and have now become the bleeders... smells like 2008; same house different couch).
But that's not the point of Buy and Hold - these greedheads have bet against this stock and others so deeply that they've now sold more borrowed stock than actually exists. I'll gladly pay you Tuesday for a hamburger today. They made a ton of money as the world burned, and now the people want their money back. The Buy and Holders have built a community around holding the line and the premise that when the other shoe drops, the bastards will buy every share they shorted at our price - to the tune of billions. The short squeeze for the people. Buy and Hold is the Sit-In for the stuck-at-home generation. Buy and Hold, it seems, has even saved movie theater chain AMC from the brink to fight another day.
"Ok," you say, "selling a thing that doesn't exist sounds kinda criminal." I agree. "But... perhaps the bastards have milked their last monkey." Maybe, maybe not. Probably not. This is, after all, the all powerful money-printing machine. "Well that sucks." Yep.
This last week has been a hell of a ride. Sure, I looked at Gamestop this summer when it was in the $4 range and took a pass because I didn't want to clutter up my positions with another low-probability bet, instead taking profits here and there with bets on stocks like airlines and cruise lines while doubling down hard on existing holdings. I looked at Gamestop again a couple of weeks ago when the price was a hair under $20. I couldn't bring myself to do it then because my mind was poisoned by those heady $4 shares of the summer.
Speculating in the stock market is like trying to steal the cheese out of a mouse trap; you need a steady hand and nerves of steel, and it helps if you're the smartest idiot in the room. I've learned from the mistakes of my past and I have the scars; I still hold 1,200 shares of the now defunt Helios and Mattheson (HMNY; Moviepass) as a stark reminder that frothy exuberance is a dangerous drug, and to never buy the dip if it means putting your hand in the toilet. I just couldn't let go.
But this week the Song of the Hype Machine was strong and I got in the game in the frothiest moments Wednesday when the price was $358 and hung on with white knuckles. Wanting to reestablish my position at a lower buy-in, I considered selling during Thursday's $400+ premarket highs and reestablishing during what I assumed would be a dip on the open, but ultimately chose to hang on instead.
Thursday turned out to be real trench warfare. The circuit breaker seemed to trip every few minutes to buy the greedheads time to regroup, and Robinhood blocked buying on all meme stocks (stocks who's interest was supported by online forums: AMC, BB, GME, NOK), assumedly due to a liquidity crunch (they didn't have the cash to cover all the buys with the clearing house), thus castrating the little guy en masse. Gut-wrenching stuff. I watched from outside my body as I considered buying Thursday's dip at $130, but didn't have the resolve - I was still woozy, my stomach in knots.
Friday had the looks of a solid day, so I sold in the pre-market run up at $374 as a doctor swabbed my nostrils for evidence of COVID, and reestablished during the 10-10:30 dip at $318. At the current price I'm break even, but I'm holding. No sell limit, no regrets. These moments are my Super Bowl - raw nerve endings, itchy palms, bleeding ulcers. It makes my teeth sweat.
Good luck to you Buy and Holders and may Saint Cajetan, the patron saint of gamblers, forever be on your side.
