Anyone Here Play the Market?

[MightyGiants]

Out of curiosity, I am confounded about the political angle you seem to bring up. I don't see anything political about this. Wall Street is equally divided between both sides of the political spectrum and in fact, the majority of wealthy elite are politically active for the left (Warren Buffet, Jeff Bezos, Bill Gates, Mark Zuckerberg, Jack Dorsey, George Soros, etc.) and in fact, the wealthiest of the elites in Wall Street work(ed) for BlackRock (assets measured in trillions of dollars) have left BlackRock for positions in Biden's administration. Before that, many of Trump's advisors in the financial world were from Goldman Sachs. But I would not conclude that BlackRock big wigs are liberal or that Goldman Sachs big wigs are conservative. In fact, I guarantee the people who work at both places have both liberals and conservatives sitting in their cubicles staring at computer screens all day.

This is more a story of David and Goliath where individuals who don't have private jets and a multi-million dollar escape pads in Miami and 200 ft yachts to play on, and in fact probably tend to live in one or two-story homes stuck there for a year because of the pandemic. I personally know five people who are trading regularly on Robinhood.  Two of them are Trump fans, the other three Biden fans (one in particular tends to lean obnoxious in his hatred of Trump). I just don't see how individuals playing in the market have anything to do with their political affiliations. The rich have both political leanings as do the middle class and the poor.

I'm reminded of a great scene by Leonardo DiCaprio in the "Wolf of Wall Street" when he went through a fit of rage and obscenities saying, "This is OUR #%$#^ HOUSE, and we - not them - built this @#@$ system and no one else is allowed...." etc. This is simply classic small guys vs. the wealthy elite who have built a money making system for themselves and only want outside players willing to lend money to their system money for their own gain.

But don't worry, the wealthy are going to survive and come up with new ways to fleece the little guy as they relax on their yachts being waited on by a bevy of gorgeous 20-somethings to serve their every desire. No matter what his or her political affiliation, he or she will enjoy the good life til the day they die. I'm also reminded of Bill Gates saying, "you have to be a genius to turn a $1.00 into a $1.01, but if you have a 100 million dollars, you can't stop it from becoming 101 million". Money begets more money, lack thereof begets misery.

JBG,

I watch the left and the right of the political spectrum with equal interest.  Before I address that point, I need to back up.   It sounds like you are not really familiar with the pump and dump scheme that Blue4Life correctly noted.   A pump and dump scheme was one investor or a handful of investors would buy a penny stock.  They would then use social media to pump up the stock providing fake insider tips, talking about how the company is on the verge of taking off, etc.   With their coordinated PR campaign, they would get people to buy the stock and pump on the price of the stock.  Once it went as high as the manipulators think it can go they sell out of their positions, abandon the PR campaign, and leave all those who fell for their stunt holding the worthless stock and losing a fortune.

Here the scam artists recognized stocks that were excessively short (allowing their scheme to work) and did the same thing.  They coordinated their efforts to convince people to buy the stock-raising the price, selling out (making a fortune for themselves), and then leaving all the people who bought into their hype and bought the overinflated stock holding worthless stock and losing a fortune.   Sure the short-sellers got hurt but so did the vast majority of people they conned into helping them with their money-making scam.  As Blue4Life said, just a sophisticated pump and dump scheme.

To circle back, I said I watch the left and the right with equal interest.   I was truly impressed to find the scammers had created a narrative that played as well with those on the right as it did those on the left.   That was truly an impressive feat of manipulation.  They united those on the right and the left cheering as the scheme they believed stuck it to the elites or the wealthy (depending on your ideological flavor)

[Jolly Blue Giant]

JBG,

I watch the left and the right of the political spectrum with equal interest.  Before I address that point, I need to back up.   It sounds like you are not really familiar with the pump and dump scheme that Blue4Life correctly noted.   A pump and dump scheme was one investor or a handful of investors would buy a penny stock.  They would then use social media to pump up the stock providing fake insider tips, talking about how the company is on the verge of taking off, etc.   With their coordinated PR campaign, they would get people to buy the stock and pump on the price of the stock.  Once it went as high as the manipulators think it can go they sell out of their positions, abandon the PR campaign, and leave all those who fell for their stunt holding the worthless stock and losing a fortune.

Here the scam artists recognized stocks that were excessively short (allowing their scheme to work) and did the same thing.  They coordinated their efforts to convince people to buy the stock-raising the price, selling out (making a fortune for themselves), and then leaving all the people who bought into their hype and bought the overinflated stock holding worthless stock and losing a fortune.   Sure the short-sellers got hurt but so did the vast majority of people they conned into helping them with their money-making scam.  As Blue4Life said, just a sophisticated pump and dump scheme.

To circle back, I said I watch the left and the right with equal interest.   I was truly impressed to find the scammers had created a narrative that played as well with those on the right as it did those on the left.   That was truly an impressive feat of manipulation.  They united those on the right and the left cheering as the scheme they believed stuck it to the elites or the wealthy (depending on your ideological flavor)

I am well aware of the "pump and dump" method of driving up stock. It's only been happening for decades. I just don't see any political connection whatsoever. If you look at those in high places in politics that have taken advantage of the stock market because they have "inside information" about pending bills that will pass before a vote is cast, and it would list politicians from both sides of the political aisle. Republicans Richard Burr and Kelly Loeffler dumped their stock holdings just before the Covid shutdown because of advanced knowledge of a pending shutdown that was not yet public knowledge. Burr and Loeffler received a ton of negative Press over it. Left out from the main stream media was that Democrat Diane Feinstein did the exact same thing with nary an eyebrow raised or a story to be found. Regardless, not wanting to get into a political discussion, I fully believe that greed effects the entire political spectrum and I suspect most politicians in D.C. are worse than shady used car salesmen or the cigar smoking whales in Wall Street. At the center of this Gamestop phenomena is basically nothing more than the "haves" vs the "have nots" and politics has nothing to do with it. In short, the "haves" are really, really pissed that the "have nots" played them. Boo hoo! They can sell one of their five Bentleys or one of a hundred priceless paintings used as decor in their foyer or stair case to cover their losses.

[MightyGiants]

I am well aware of the "pump and dump" method of driving up stock. It's only been happening for decades. I just don't see any political connection whatsoever. If you look at those in high places in politics that have taken advantage of the stock market because they have "inside information" about pending bills that will pass before a vote is cast, and it would list politicians from both sides of the political aisle. Republicans Richard Burr and Kelly Loeffler dumped their stock holdings just before the Covid shutdown because of advanced knowledge of a pending shutdown that was not yet public knowledge. Burr and Loeffler received a ton of negative Press over it. Left out from the main stream media was that Democrat Diane Feinstein did the exact same thing with nary an eyebrow raised or a story to be found. Regardless, not wanting to get into a political discussion, I fully believe that greed effects the entire political spectrum and I suspect most politicians in D.C. are worse than shady used car salesmen or the cigar smoking whales in Wall Street. At the center of this Gamestop phenomena is basically nothing more than the "haves" vs the "have nots" and politics has nothing to do with it. In short, the "haves" are really, really pissed that the "have nots" played them. Boo hoo! They can sell one of their five Bentleys or one of a hundred priceless paintings used as decor in their foyer or stair case to cover their losses.

JBG,

As I said, I watch message boards of the right and the left, both sides discussed this issue heavily.   Both sides were equally taken in by and cheering this pump and dump scheme (at least initially).   

[Shoelessjoe]

I have one basic premise that I follow.  I'm not privy to the information that people that do this for a living have at their disposal.  As a result I have an investment firm that I'm comfortable with handle it for me.  I guess I'm more like Lenn then some us but I feel that there is no way that I can compete with the big guys who have too many tools that they they use.

[Jolly Blue Giant]

I have one basic premise that I follow.  I'm not privy to the information that people that do this for a living have at their disposal.  As a result I have an investment firm that I'm comfortable with handle it for me.  I guess I'm more like Lenn then some us but I feel that there is no way that I can compete with the big guys who have too many tools that they they use.

There's a lot of information at our fingertips that are the same numbers the big boys use. However, they have a lot of advantages. Where we might buy a 100 shares of stock "WXYZ", a hedge fund like BlackRock might buy 20 million shares of the same stock. Their volume alone can easily effect the stock price whereas our buys and sells is like spitting in the ocean trying to raise the tide. Also, the big boys have big media at their disposal and they release "analyses" that can make a price go up or down. A good example was in Barron's a couple of weeks ago when one of their analysts were downgrading a stock from "buy to neutral". In the comments section, one of the writers wrote, "this means they are about to buy a million shares and they want the price to go down first before pulling the trigger"....which was probably right because the stock price dropped and two days later lit up.

Regardless, no way the little guy can expect to profit from the market the way the big dogs get to profit. However, with interest rates at basically net-zero, the market is the only place to put your money and even though you might only get a 10% return compared to a mega-millionaire getting 20+%, 10% is better than the pennies you get in return for leaving your money in a bank somewhere.

[Jolly Blue Giant]

If there is any lesson to be learned about playing the market, it's "never brag about your gains".

I am heavy into tech stocks. I buy rising tech stocks whenever they dip and then turn around and sell them a few days later when they recover. It has worked very well for me. I started in mid-November with an input of 10k just to see if I could squeeze out some extra money. I felt like a genius as by the middle of February - a mere 3 months playing the market - I was up 54% and felt like a genius. Then came the third week of February and some of my favorite stocks were down 10-12% so I snatched up several of them seeing it as a great opportunity. Then they went down again...hmmm. The next day, even further....hmmm. By the second week of continual going down I began to panic - I was an absolute miserable person to be around. I went through 3 weeks of hell watching my stocks go down, down, down and couldn't believe it when my initial investment was now down -6% overall. I went from +54% to -6% in 3 friggin weeks - more than half of my portfolio's value. It was no consolation when I read that Elon Musk lost 22 billion during the tech sell off and I was perplexed by the idea that since the bond market went up .01% that people would panic and decide they had to put their money in bonds with a whopping interest rate of 1.5% over 20 years.

Anyway, it was a stressful three weeks, but finally a pretty good recovery this past week. I had no choice but to sit pat with my fingers crossed and hope for the best. This past week my portfolio recovered 2.5k, and I'm up 15.4%, but all my stocks but one are still in the red and I need another couple of good weeks just to get back to where I was. If it ever gets back up to where it was, I'm going to sell them all and put it into savings and wait for the next big tech sell off before jumping back in. I think I have aged about 5 years in the last few weeks. Part of me thinks the big guys on Wall Street are getting together to see how many individual small investors they can shake out or go bankrupt as a bit of payback for the Robinhood's gang of Gamestop players that made the short selling millionaire's club get butt hurt. Just thinking out loud.

Anyone else have a near heart attack during the tech selloff?