Tag Archive: Gamestop

If you’re here because you googled me after reading the Wall Street Journal article on GameStop – welcome! This wasn’t my first time in WSJ, but it’s always fun when that happens.

The article is well written, and it provides a balanced and nuanced look at the WallStreetBets subreddit’s evolution (some would say devolution) since the big GameStop affair exactly a year ago. I gave several hours of interviews for the article, and while I’m glad to see my experience described fairly, a lot was left unsaid. This post aims to provide more context, not in the least part due to all the roasting I’m currently getting in the WSJ comment section by people who think I’m a gambler or question my professional credentials. (Somehow, I can’t seem to reply to them – as a new subscriber, my comments are stuck in the moderation queue limbo. Heh.)

For example, I didn’t retire early solely because of the small fortune I made on GME over the course of 45 hours. That certainly helped, but the bulk of my 193.7% return between May 2020-May2021 came from being greedy when others were fearful, Buffett-style. Stocks that had been most affected by covid (travel, retail, energy) were on sale, and no one else wanted to buy them. I still remember the raw fear of possible failure when I sold all my Amazon shares and transferred the money into my investing account to buy a few handpicked and carefully selected stocks. (That key moment’s drama was a bit diluted by the fact that I had to click at least four confirmation pop-ups.)

When I did that, I’d been with Amazon for 10.5 years, most of them as an analyst of various kinds: a quality analyst, a business analyst in charge of fulfillment strategies in most of Canada, Midwest, and Mexico, an investigator, and finally the financial analyst at one of Amazon’s biggest fulfillment centers in North America. Long journey, many lessons, lots of opportunities to hone my skills. I’d read every single thing ever written by Buffett, attended his annual shareholder meetings, listened to every Q&A… I jumped on that once-in-a-lifetime investing opportunity when it presented itself in 2020. I write this now from my cozy apartment in the beautiful Quebec City, eight months and nine days into my early retirement, because all my preparations, and my ultimate choice to dive in, paid off beyond my wildest expectations.

If not for GameStop, I probably would’ve spent another year or so in the rat race: my early retirement (at the ripe old age of 34) was an eventual inevitability, not a lucky fluke. But since this is the one-year GameStop anniversary…

In January 2021, I made a rare discovery: I found a blind spot in my own mind. I was taking a detailed look at the previous decade (as one does) and asked myself, “Self, why did you overlook the raging successes that were Tesla and bitcoin?” And it occurred to me that I’d spent all my time making fun of those and other phenomena, and never even deigned to look at them seriously. Both Tesla and bitcoin were weird-sounding underdogs, and yet they prevailed. I realized there was a flaw in my cognition: I’d jump to conclusions and never give things another chance. That’s a bad trait to have as a human; that’s a dangerous trait to have as an analyst.

And thus a resolution was born: I would suppress my instinct to make fun of crazy ideas, no matter how strange they would seem. I would look into them without bias or prejudice, see what they were all about, check the math, and then make fun of them. Easy as pie – seemed like a fine compromise. I had no idea where that would lead me…

I curate my social media to follow only comedians or scientists: that way, I avoid political and religious drama, and every time I check my Twitter feed, I either laugh or learn something new. Some of the brainiacs I followed routinely made fun of Reddit’s r/WallStreetBets community. (Referred to as “WSB” from here on.) Despite being an avid Reddit user myself, I never once went to WSB: my exposure to that community consisted solely of cherrypicked funny screenshots people would share online. Those memes made it seem like the entire community was filled with idiots and/or gamblers. (And to be fair, that does describe a lot of them.)

I remember Friday, January 22, 2021. I remember logging on Twitter at the end of a monotone workday. I remember some Twitter brainiac I followed making fun of WSB – as I recall, he simply wrote, “those WSB idiots think they can resurrect GameStop!” Months earlier, in 2020, GME was one of the stocks I’d looked at – and recoiled from in disgust. The stock price was around $4 a share back then, and it seemed on the verge of bankruptcy. (My life would’ve been a whole lot different if I’d sought out other opinions on that day… Oh well.) But not this time: armed with my shiny new resolution, I went into the belly of the beast, and started reading what WSB had to say.

I still remember looking at the afterhours action that Friday, when it was still not too late to buy some shares: GME had gone up 51% that day, from $43.03 on Thursday to $65.01 on Friday. It was remarkable – but I didn’t want to make a move without learning more. And so I sat, and read, and learned all weekend long.

I looked at the arguments and theses of Keith Gill, aka Roaring Kitty, aka DeepFuckingValue. I looked at what had caused the 83.1% week-over-week increase from $35.50 to $65.01. I saw (and double checked, and verified) the strange claims that 140% (yes, one-hundred-and-forty percent) of the float had been shorted. I saw the beautiful, brilliant, brave trap WSB had laid out by buying up as many call options as they could, then nudging the stock price just high enough to trigger them at the end of the week. As hedge funds scrambled to buy more shares to fill the exercised call options, the stock price went higher in the afterhours, triggering higher call strike prices, requiring them to buy more shares, and so on. All that with the stock that was remarkably over-shorted and didn’t have a lot of available shares.

Thus started the chain reaction that changed the world. Someday, someone will make a big fancy movie in the style of The Big Short, and explain this chain reaction concept in great detail and in simpler terms. Until then, just take my word for it – it was brilliant. In the year that followed, people’s notions of GameStop became associated exclusively with cult-like followers, with ridiculous memes and screenshots, with na├»ve simpletons losing their shirts. Most of that happened later, long after the key event. Most of the people who mock GameStop and sneer at it (I’m looking at you, WSJ comment section!) probably share the same mindset I had prior to 2021: they don’t even bother to look for themselves, to see how all of that began…

That weekend, I checked and double-checked and triple-checked the math, the insane “short % of float” figures, the number of outstanding shares and the timeline for hedge funds to deliver said shares… Everything pointed to the same indisputable conclusion: the math checked out. On Monday, January 25, 2021, I liquidated some holdings (for a net gain, of course) and started buying GME as it experienced a particularly volatile trading day. Part of my research involved looking at the daily charts and patterns: I identified a specific time slot when the selling (or shorting) activity was usually at its peak: between 11:45am-12:30pm EST. (Don’t try this at home, kids – that shipped sailed a year ago.)

That Monday, in between writing weekly business reports and dealing with routine work, I kept a close eye on the price… GME opened at $96, went as low as $61 and as high as $159, and finally closed at $76. My tactic worked: buying in lots, I acquired a substantial number of shares at the average cost of $77.90 per share: not as low as it could’ve been but far better than many others fared on that day. The following two days were a blur of anticipation and looking at the price as the squeeze continued, just as planned. The stock closed at $147.98 on Tuesday. In the afterhours, Elon Musk (who hates short-sellers with fiery passion) tweeted “Gamestonk!!” followed by a link to WSB. The afterhours price shot up to $250 as Musk’s fans poured in. I have mixed feelings about Musk, but damn, that was some brilliant trolling.

And then there was Wednesday… I remember seeing the GME stock over $300 in the premarket trading, then acting incredibly volatile right as the market opened. I remember being torn: what if it really does go all the way to the moon, the way Volkswagen once did after a brilliant short squeeze? Would I be leaving a fortune on the table? A different, more pragmatic part of myself said, “This is too good to be true – just take the money and run.” And I did: I placed a market sell order, it got filled at precisely $293, and I ended up making 276.1% in both my taxable and my Roth accounts in less than 48 hours.

The stock hit $380 that day, and $483 on Thursday, just before the rug got pulled. I still think the sheer momentum would’ve been unstoppable if not for foul play. Robinhood literally disabled the “Buy” button because that was the only way they would’ve remained solvent. Stop and think about that for a bit: a major trading platform had to do the unprecedented, and that was the only thing that stopped the ongoing short squeeze. Meanwhile, the Apex clearinghouse (and all the brokerages under it) limited or disabled access outright. My own broker, Ally (hitherto Tradeking, hitherto Zecco) disabled the login page for three days, and never satisfactorily explained why. Later on, I moved my accounts to Fidelity directly because of that.

The blockade maneuver worked for a bit, and the price dropped to $193. GME recovered and ended the week at $325, a 399.9% week-over-week increase. But the momentum was gone: the following week, the stock price began the long drop to $38.50. (That happened on February 19, 2001.)

If you didn’t experience the GameStop mania firsthand, merely reading about it will not suffice. Tens of millions of Americans – having done zero research, of course – tried jumping on that train. Some made money. Many didn’t. Someone out there bought at the very top ($483) and never regained their cash unless they did a lot of averaging down. My estranged American step-brother contacted me for the first time in 15 years to ask how to set up a Robinhood trading account. I advised him not to, and I still don’t know if he lost any money. (He never contacted me again. So it goes.)

If you look at GME’s one-year chart, you’ll see how ridiculously volatile it was in the year that followed. It jumped to $483 in late January, then dropped to $38.50 in February, rocketed up to $348.50 in March (a nice 805% return if you’d timed everything perfectly, which no one ever does), down to $132 in April, up to $345 in early June, etc. It was a real rollercoaster of a year.

GME’s one-year chart. (Source: Yahoo Finance)

I was never part of the “diamond hands ape HODL” legion: I fancy myself a strategist, and I always work on being a better tactician. I didn’t touch the stock again unless the chart showed clear support levels. Since the big spike and the plunge that followed a year ago, I’ve made 10 more swing trades: all successful, but never quite as profitable. I dabbled a bit with selling covered calls (a fine hobby when the implied volatility is so high) before selling my shares for a small profit during the final little price spike a few weeks ago. As I am writing this, at the end of a particularly choppy trading day, GME went as low as $86.29 before closing just a hair above $100.

I have no clue what the future will bring: perhaps GME will fall below $20, perhaps it will rally to $300 again. At this point, there are too many forces at work, and it’s among the most irrational stocks in the market: fun to observe, but from a very safe distance.

And as for me… A year ago, I made myself a promise: henceforth, forevermore, I would celebrate the anniversary of those three days (January 25, 26, and 27) with food, and drink, and revelry, and dance. Those 45 hours were a remarkable experience, and I’d celebrate their anniversary forever. Right now, Quebec is in the midst of a strict covid lockdown, with all the restaurants and clubs on indefinite hiatus, so there’ll be limited revelry and dancing. And yet, there’s still champagne, and cake, and the oddly cheap caviar at the local grocery store. (Very fishy, I know.)

The next three days will be a bit of a blur as I celebrate the first anniversary of the time a bunch of peasants armed with math broke Wall Street’s nose. It may have healed, but it will never be the same again. A year ago, we executed a brilliant plan, in pursuit of a beautiful dream, and we made history.

I’ll drink to that.

Plague diaries, Day 397

Wednesday evening.

A longer-than-usual workday filled with several big fires to put out, and edumacating my trainee (who would’ve been my boss if I weren’t quitting). That two-week vacation can’t come soon enough. Just two more workdays…

It’s been a while since I mentioned GameStop: its saga still continues, and it’s fascinating. After reaching $483 at one point in late January, it crashed all the way down to $38.50 by February 19th. Of course, it helped that Robinhood, a popular and accessible trading platform, disabled the “Buy” button, thus generating a sell-off… A lot of shady stuff happened, and the congressional hearing held weeks later didn’t clarify a whole lot. Here is where it gets interesting, though: after falling by more than 90% at bottoming out at $38.50, GameStop spiked up again, by 805%, all the way to $348.50 by March 12th. That’s a fine return in less than a month.

Since then, it’s been going down in price while holding on to some key resistance levels. Today, for example, it jumped by 18.1%, from $140.99 to $166.53. They’ve hired several experts from major tech companies, installed Steve Cohen (co-founder of Chewy and a fan of GameStop) as their chairman of the board, paid off their debts, and started the search for a new CEO. That alone is impressive, but the mighty suspicious selling pressure also hints at the fact that the major hedge funds that shorted GameStop twice before might be doing that again. I could be wrong, but it sure looks like there’s another short squeeze incoming (maybe they’ll learn their lesson then?..), and fairly soon. And yes, I have some of my own money riding on that. Heh. My prediction: at some point between today and New Year’s, it’ll reach $250 again, and might go even higher than that. That stock alone will be the bright memory of this pandemic era for millions of people…

In covid news, good news/bad news. Good news: the Vaccine Hunters group I’d joined earlier is growing at an impressive pace. Our Ontario Discord channel alone has grown from 43 people to 473, and it’ll keep on growing. The local media ran several news pieces and interviews with the group’s cofounders and leaders, which you can find here and here. I’m not nearly as proactive as some folks in the group, but I did help my landlords find out about their postal-code-based vaccinations (which may or may not materialize), and I’ve advised about 10 or so Canadians about the fine points of driving to the US to get your shot. I like to think I helped, eh.

In bad covid news, there’s yet another new variant of covid19 – this one was found in Tanzania, and was designated A.VOI.V2. It has more spike protein mutations than you’d expect, and while there’s no way to tell yet how that would manifest in the real world (more contagious, more deadly, etc), that’s still concerning. It’s so strange these days… There’s an overabundance of covid-related news. Some of it is likely just overhyped rhetoric from attention-starved media outlets. Some of it, though, appears insignificant at first and then goes on to become a major issue later on, as if the first appearance were just subtle foreshadowing. In the months to come, will the A.VOI.V2 variant end up conquering the world? Or will it fade away, leaving its trace only in a few news articles and in this blog entry? Only time will tell.

And almost forgot: there are 100 days left until the Tokyo Olympics, which has already been rescheduled once. The event is still on, but there are lots of hurdles. Less than 1% of Japan’s population have been vaccinated so far. Only 0.4% have received both doses. International fans won’t be able to attend the games in person. There will be, however, over 11,000 athletes from all over the world. Statistically speaking, it’s inevitable that at least one team from at least one country will come bearing covid. I suspect they’ll probably continue on with the Olympics, but it might be the strangest, emptiest Olympics the world has ever seen. We’ll find out in July, I suppose.

Good night, y’all. Stay safe.

Plague diaries, Day 332

Monday night.

The CPR/first-aid training people got in touch today and said that it’s actually a two-day course, but the theory can be knocked out if I take an online class. It’s a bit tedious, but it’ll keep my potential exposure to fellow students from two days to just one. Huzzay, I guess?

Gamestop’s stock is pretty much in death throes at this point: it briefly jumped by 13.8% earlier today, only to close 5.9% down for the day, at measly $60 a share. It’ll likely keep circling the drain, which will make the redditors on r/wallstreetbets that much more desperate. The whole place is crawling with wild conspiracy theories about the coming short squeeze that will save them all. (A lot are in the red because they bought in early…) At this point, doing the exact opposite of their advice seems like the right thing to do. To that end, I bought a single put option (aka a bet that the stock price will go down) for Redfin (RDFN), which just hit its all-time-high of $89.29. It was trading for $9.63 less than a year ago, and I’m pretty sure it’ll come back down. (My put is for January 2022.) The spike in its valuation was at least partially fueled by people working from home (and from fun new locations) during the pandemic. Take away the pandemic and, well… It’ll be interesting to see if my small bet will be correct 11 months from now.

…for the record, I don’t mean to dunk on the wallstreetbets crowd. They ensured their place in financial history, and I’m much closer to early retirement because of them. I just think they’ve gotten a little carried away with rationalizing their choices after Gamestop’s stock price started falling. In honour of that subreddit, this week I’m eating chicken tenders (aka “tendies,” their favourite food), cooked to perfection in my awesome instapot. (Hey, at least it’ll make this week mildly more memorable.)

In covid news, New York’s governor Andrew Cuomo is trying to forge his own path in defiance of all the world-class experts available to help him. About a week ago, he announced that he’s lifting the restriction on large weddings. As of mid-March, New Yorkers will be allowed to have weddings of up to 150 people, or up to 50% of the venue, whichever is smaller. His strange guidance relies on having people test themselves for covid before the wedding: that’s not something one can really enforce, and when you account for false negatives that will sneak in… No one is quite sure why he’s doing that: there is no political capital in appeasing a few Bridezillas, and creating new covid super-clusters when New York is just months away from vaccinating everyone is, well, suicidal. I know I dunked an awful lot on Trump’s many covid-related failures over the past 11 months, but this case just shows that stupidity is universal. Cuomo won’t be able to do nearly as much damage as Trump did, but certainly not for lack of trying.

Good night, y’all, and stay away from those weddings, eh?

Plague diaries, Day 329

Friday night.

I find it funny how many Friday nights I’d stay home, just enjoying some alone time, and how much I want to go out and party it up now that the option is not available. Some think there’ll be a huge economic boom from all the pent-up demand when everyone finally gets vaccinated – whenever that may be.

Meme stonks took a break from being slaughtered and had a mostly fine day. Gamestop jumped from $51 to $95 before settling on $63.77. Heh. Perfectly normal behavior, eh? If and when it finally returns to its previous sub-$20 level, I’ll buy exactly one share, and ask my broker to send me a paper stock certificate thingy (whatever it’s officially called) that I can frame and hang on the wall. I want to look at it every day and laugh at the sheer randomness of that ridiculous week. (And yes, I recognize that luck was definitely a factor in my money-making trade. It always is.) Meanwhile, I decided to do a small experiment with stock options: I tried it once about four years ago, and I never lost so much money so quickly. Heh. I bought one small call for Blackberry for January 2022, with a $12.50 strike price, and it’s already gone up in price by 26% in the last 24 hours. It’ll go even higher if Blackberry’s price goes up. Just a small side-bet…

It still blows my mind how successful this investing hobby of mine has been. My hand-picked little portfolio has gone up by 164.5% since May. So wild. Combined with the pandemic, this makes my reality feel ever more surreal: two incredibly unlikely developments transpiring at the same time, side by side. How weird is that?

I plan to spend this weekend reading everything I can find online by Michael Burry (the guy behind the Big Short) and a fellow who goes by DeepFuckingValue on Reddit (aka TheRoaringKitty on Twitter). His name is Keith Gill, and just like Burry, he’d recognized Gamestop’s potential months ago, when everyone else thought it was a joke. (One could say that Gill was the prime mover for the Gamestop saga. Then again, if not him, it would’ve been someone else. The target was simply too big.) I want to learn how exactly they saw all that using nothing more than publicly available information. The two of them were the only ones to recognize the stock’s potential. (Efficient Market Hypothesis is a lie, kids.) I want to understand how their brains work – not unlike Sylar from the TV show Heroes, but mildly less creepy. I figure setting myself little weekend research projects on varying subjects (since it’s still below freezing outside) will help keep things interesting. Who knows, I might actually learn a thing or two, eh?

In covid news, the Biden administration is ramping up the vaccination campaign: the goal is to set up 100 mass vaccination centers around the US, and get up to 10,000 troops to assist. It’s remarkable what can be done when a baseline-competent person is in charge… Also pretty remarkable how many options a country can have when they have their own Pfizer factory. Must be nice. Here in Canada, there are still more delays. The exact numbers are unclear, but it sure looks like Moderna will send fewer vaccines than expected in the coming weeks. What’s worse is that this time there isn’t even any explanation from their side. Justin Trudeau keeps assuring everyone that all shall be well, that all the vaccines for this quarter will arrive by the end of March. It’s not like he has any other choice, though: put on a happy face and smile and nod. There’s nothing he himself can do: you can’t exactly bribe or threaten European companies with maple syrup and cute animals. Just gotta sit back and wait… Waiting isn’t even the hardest part. Not knowing is.

There are passionate debates about vaccine delays and timelines on social media. No one knows anything, so naturally we speculate on everything. (Gotta have a hobby.) I’ve made two bets with random online strangers: a $100 bet with one who thinks the phase 3 (aka free-for-all) vaccination will begin in June; a $20 bet with one who thinks it’ll begin in August. The loser(s) will donate the money to the homeless: there’s no way to enforce it, so it’s just virtual funny-money, but it’ll be interesting to get that automated reminder a few months from now and check to see how much has changed. As always, I would love nothing more than to be proven wrong…

Good night, y’all. I hope your weekend is fun and free of covid.

Plague diaries, Day 328

Thursday night.

I think the meme-stonk saga is officially over. Today, Gamestop crashed by 42%, and then fell by 8% on top of that in the afterhours, down at $49 a share. When I first saw it, on Friday 1/22, it closed at $65: it’s come full circle. It’s been less than two weeks, and so much changed in that short timeframe… On the r/wallstreetbets subreddit, people are starting to post the suicide hotline number more and more often as their fellow redditors write that they’ve lost everything. Some had invested their entire bank accounts, or their entire retirement fund, or even took out a loan specifically to get rich quick on Gamestop. It’s terrifying.

I still think a huge share of the blame belongs to Robinhood: if that shoddy trading platform had been more stable, they wouldn’t have run out of funds, and wouldn’t have triggered a massive selloff exactly a week ago when they literally disabled the “buy” button. At the same time, though… Most of this Gamestop saga took place in the US. When your government sends out a single $2,000 check in April 2020, and then refuses to do anything else and finally, ever so graciously, sends a $600 check in January, what else is there left to do but jump at a desperate “get rich quick” scheme promoted in the news? By starving its own people, the United States had ensured that some perfect storm, some tulip mania – call it whatever you want – would eventually take place. Gamestop just happened to be the spark that started the inevitable wildfire. And unless more aid is coming, there will be more desperate financial shenanigans to come. Even those mythical responsible citizens who had saved six months of living expenses would’ve gone broke by now if they’d lost their jobs in March.

When you have almost nothing left, you’re game for anything.

The gloom and doom on wallstreetbets (that is, when they’re not encouraging each other with increasingly wilder what-if scenarios) reminds me of the subreddit for oil and gas workers a year ago, when oil futures became negative for the first time ever. They literally couldn’t pay people to take oil off their hands, and a whole lot of folks in that sector lost everything. That was the only other time I saw a suicide hotline number being shared around. None of this had to happen. All of this was avoidable.

In other news… Today is February 4th. If not for the pandemic, today would’ve been the day I would’ve received my Canadian permanent residency. The final application was submitted exactly six months ago, and that’s their standard processing period. Because of the pandemic, they’ve probably got a huge backlog of cases and applications to process. Like many other things right now, this also got delayed… It’s unclear whether I’ll get my PR weeks or months from now. Presumably soon. I have a hunch that it’ll happen later this month, so I suppose we’ll see. There’s absolutely nothing I can do to affect the outcome or speed them up, so it’s more wu wei – action through inaction, a beautiful Taoist concept.

I got some mighty good news at work, or at least I was told there’s a 98% chance the mighty good prediction will pan out. I should know (and be able to share) more in the next few weeks. Here and now, I’ve decided to celebrate with an unscheduled Tim Hortons lunch. It’s laughable that with all the death and self-induced gambling bankruptcies and military coups around the world, my biggest fear was when I realized I’d dropped my credit card and rushed back to pick it up. (It was still there.) That just highlights once more how insulated and, well, privileged my life is.

In covid news, there’s a video that’s going viral. (No terrible pun intended.) It shows a grocery store in Florida, with dozens of customers and cashiers who are mostly maskless, chatting and laughing up close as if the pandemic had never happened. A lot of the customers in that video are elderly. Before the plague, it would’ve been a perfectly unremarkable video: now, it looks horrifying – or at the very least anxiety-inducing. The store’s owner had posted a sign at the entrance that said people without masks will be assumed to have a valid medical condition and will not be questioned – or forced to mask up. The store’s owner also said the pandemic is “hogwash” and shared a lot of other bizarre views when he got interviewed. Promoting your business by luring anti-maskers and helping spread the virus (after you charge them for their purchase, that is) is a very unusual business model. This being Florida, I doubt the local authorities will do anything about it – but just like always, I’d love it if I’m proven wrong. (But if there are no consequences, how many other store owners around the world will get inspired to do the same?)

Good night, y’all.

Plague diaries, Day 326

Tuesday night.

The battle of meme stonks continues. Today, in combination with alarmist media coverage, continued (though improving) limits on buying, and synchronized sell-offs (likely algorithms, possibly short ladders, maybe both), Gamestop fell by exactly 60%, as did other hyped-up stocks. Looks like I made the right decision to sell and take my profits six days ago. (I had some serious doubts, but my innate cynicism won in the end. Huzzay!) Those who joined the party late and invested the money they didn’t have… Well, the so-called “loss porn” stories are already coming in. Washington Post already ran an article about someone who lost $400,000 of unrealized profits. Incidentally, the article makes no mentions of trading limits that cut off the oxygen supply last Thursday. Heh.

And now… I took the opportunity to average down for my Blackberry position: they have a very bright future ahead of them. It’s unclear whether the meme stonks (BANG: BB, AMC, NOK, and GME) will recover. Incidentally, the highly-pumped SLV ETF I mentioned yesterday fell by 8.3% today: as pump-and-dumps schemes go, that one was very short-lived. (And of course the newbies who lost money on it will blame the r/wallstreetbets community. What a perfect setup, eh.) One silver lining of that mushroom cloud was that we collectively managed to – hopefully – bring down an entire hedge fund. It might have been a relatively small one, but still – we shot an elephant with a slingshot. A T-Rex would’ve been more impressive, sure, but most people never even get close to getting an elephant. Netflix has already announced that they’ve started working on a movie about this whole saga. Entertainment aside, there’ll be decades of research and thousands of PhDs about this entire Gamestop affair. I can’t wait to read them all – after I find my next great investment, that is.

Made a new friend today: a rare treat, a voice chat with a new person in my life. At work, someone on the investing-related mailing list finally noticed my references to lean-FIRE. (Financial Independence, Retire Early; the “lean” part means a cheap lifestyle in retirement.) Just had a 40-minute conversation with her, and it felt great to bounce ideas off a fellow young person passionate about leaving the rat race. Her approach deals with options, not stocks, and her plans for 300% annual growth are a little far out, but kudos for the huge ambition. Alas, since she’s in Chicago, there won’t be any quarantine coffee plans, but still… This could be the beginning of a beautiful friendship.

Just a few hours ago, Jeff Bezos announced that he’ll be stepping down as Amazon’s CEO in the third quarter. He’ll still be the executive chair and play part in key decisions, but he’ll be able to spend most of his time and energy on other things. I can’t wait to see what he’ll do with his Blue Origin company. In the end, the space race may come down to a race between Bezos and Musk (whose prototype rocket just blew up earlier today) – like with many other innovations, progress in this venture will come from a dick-measuring contest. Anyway, Bezos has spent 27 years of his life building up Amazon from a small start-up (he did have seed money; it wasn’t a cardboard box enterprise) to a behemoth with $119.7 billion in quarterly sales. I was seven years old when Amazon was created… The idea of an enterprise that consumes 27 years of one’s life is unimaginable to me. This will be an interesting year.

In covid news, this is really interesting. A new study by the University of California, San Francisco has found that line cooks are the most likely occupation to die of covid. Their mortality risk has gone up by 60% during the pandemic. The four runner-up occupations are line workers in warehouses, agricultural workers, bakers, and construction workers. That’s so very counterintuitive (you’d think it’d be nurses, wouldn’t you?) but it makes sense in retrospect, and also goes some way toward explaining why the death toll, at least in the US, had such disproportionately high minority representation. I’ll be very curious to see if this study’s findings will be used to reshuffle the vaccination order for critical population, to make the distribution more equitable. (As a 34-year-old hermit who works from home, I’ll be the very last one to get it, I know.) They probably won’t be, but here is hoping, eh?

Buenas noches, mis amigos.

Plague diaries, Day 325

Monday night.

Someone hung Christmas lights on the building across the street from my window. That makes keeping track of time ever more confusing, the mind immediately thinking that somehow it’s still December whenever I look outside. They are pretty, though.

Myanmar’s military has just deposed its civilian government. The new rulers have declared a year-long state of emergency, though those things never go away quite so fast or easily. I know very little of Myanmar, and I won’t even pretend to speculate on anything. All I know is that it’s got 54 million people – 50% more than in Canada – whose lives got turned upside down. These things generally go from bad to worse: once the military coup genie is out of the bottle, it becomes an acceptable tactic going forward, a legitimized way of seizing power. I hope this time, against all odds, the world’s community will intervene and undo the damage. (All the same, I wouldn’t put any money on that bet.)

And here and now, in snowy Toronto, in my Studio of Solitude, I’m trying to keep myself entertained with some very light online clothes shopping ($60 won’t make or break me) and buying a $10 ebook bundle from Humble Bundle. This one is yet another collection of the Make magazine’s collected articles, and the “Edible Inventions: Cooking Hacks and Yummy Recipes” ebook seems like fun. Even if my cooking options are limited to just my instapot at the moment (I don’t want to risk a huge fine if I set off the fire alarm by frying stuff), it’ll still be great to learn about the biochemistry of it all, as well as some fun new tricks. I enjoy the science-pop (as opposed to pop-science) books that don’t overload you with cute stories or historical trivia, but provide an engaging, if watered-down, explanation for how stuff works. The $10 I spent on that will get me many hours of entertainment – and as an added bonus, I’ll almost certainly learn something useful. As the bang-for-buck ratio goes, that’s way better than spending $20 to see a 2-hour movie.

Online, the r/wallstreetbets subreddit has become a battleground. Some of the smarter hedge funds figured out that they can easily hijack the message. Over the weekend, there was what appears to be a coordinated troll-farm campaign, with multiple suspicious accounts (either brand new or long-dormant) posting long diatribes describing why SLV, a silver-based ETF, was the greatest thing since sliced bread. All those threads got showered with shiny virtual flair (awards that redditors buy for each other) to draw people’s attention. It may have worked: today, SLV went up by 7% while GME (Gamestop) fell by 31%, and by additional 16% in the afterhours, ending at $190 per share. Everyone – absolutely everyone – in the media immediately started claiming that wallstreetbets is fully behind SLV now, and has abandoned GME. It’s uncanny to watch the exat same message propagated by every talking head, on every outlet, even as the subreddit’s regulars post threads pointing out that no, they’re not, in fact, behind this. SLV is partially owned by the same hedge funds that had shorted Gamestop…

It’s a beautiful propaganda campaign in its own way. The 6 million newsbies who joined wallstreetbets last week don’t know any better: between the shiny promoted threads and the ongoing trading limits on Gamestop, it’s no wonder its price fell so much. If they keep that up for just a few more days, that’ll be it. Conversely, if Robinhood and others finally remove the trading restrictions, the increased volume could drive the price higher. Robinhood’s CEO, Vlad Tenev, will testify in Congress on February 18th, so maybe he’ll try to play nice and lift the limits – or maybe he’s too far gone to care. My sole concern is that all the regular people, those who know nothing about investing and flew to that subreddit over the past few days, might end up risking the money they don’t have on things they don’t understand – and lose it all. They’re all adults, and responsible for their own decisions, but still… Manipulation is manipulation.

In covid news, Toronto just had a massive covid outbreak at meat processing facility. Of the 78 confirmed cases, at least two had the new and more contagious B117 variant. This was the first workplace outbreak in Toronto to feature this new strain: those workers had no travel history, which means it’s already here, spreading through the community. February is not off to the best start here – even the plain old covid strain ended up shutting down the entire city. If this new version really is that much more contagious… Things will get bad. Remains to be seen, I suppose, just like everything else.

In much better covid news, Biden’s administration has awarded $230 million to an Australian-based company that manufactures highly reliable and fast at-home covid tests. Evidently, Ellume’s test kits are 95% accurate, take just 15 minutes, and cost only $30 each. That’s huge if true. In 2020, just about every test kit available on the market was either over $100, or not very accurate, or required several days to process, or all of the above. Had something like that been available at the time, a lot of things would’ve turned out differently – but it’s here now (“here” being the US), and that’s great news. Ellume will produce 19 million kits per month, of which 8.5 million will go to the US government. That’s not nearly enough for the entire world, but that’s a damn good step in the right direction.

Good night, y’all.

Plague diaries, Day 321

Thursday night.

I really hate it when I’m right. That means my worst, more cynical instincts were correct, and the reality matched my expectations, which had been low to begin with.

Today, Wall Street fought back. Just when Gamestop’s shares reached $500 in premarket trading, Robinhood, the popular fractional-share app-based trading platform, announced that they would freeze new orders on Gamestop and other over-shorted stocks that had been set to pop. One important distinction: they didn’t freeze all the trading on those stocks. They merely froze new orders. If you’d bought some of those stocks, you could only sell them: you couldn’t buy more. If you were a short-seller, you could buy and close out your position. In other words, the only new buyers were short-sellers. That was a highly efficient way to manipulate the market and drive the prices down.

Robinhood was joined by a couple of other online brokers. My own broker, Ally, decided to just stop letting people log in. Heh. That’s one way to do that, I suppose. Their social media people started out by apologizing for the delay and promising they’re working on it. They ended by posting this tweet, in which they blatantly admitted that their clearing firm, Apex Clearing, banned all new transactions on Gamestop – and didn’t deign to lift the ban until 3pm, at which point us peasants were finally allowed the mighty privilege of logging into our own investment accounts. (If you’re not a stock market person: it’s open only between 9:30am-4pm Eastern, Monday through Friday.) As far as I know, the only major online broker that didn’t sabotage its customers was Fidelity.

To quote a viral meme making rounds on Twitter, the market’s invisible hand was definitely very visible today. That was such blatant and arrogant manipulation… One of the online brokers’ VIPs said the quiet part out loud during a TV interview earlier today: he said they had to halt the trading to protect themselves. Ho hum. Some reports also claim that Robinhood had some liquidity issues and was presumably on the verge of collapsing if not for this intervention. They removed the block on trades toward the end of the day, and said they’ll allow limited trades tomorrow. How nice of them to treat their adult customers as if they were unreliable teenagers.

It’s very strange for me… I was into epidemiology most of my adult life (I’ve read almost every CDC memoir out there!) and I’m an avid investor. This week, everyone on social media has been talking exclusively about stocks, and a little bit about this pandemic we’re in. It’s so bizarre – it’s as if everyone is channeling my brain. I’ve stopped my recreational reading and gaming: I just can’t stop reading, and sharing, and commenting. Never before have I been so fully involved in the online zeitgeist.

There were repercussions, of course. Someone has already filed a class-action lawsuit against Robinhood. (Though whatever penalty they get, if any, won’t make a dent in the profits their partners made today.) A lot of politicians are saber-rattling, though some seem a bit confused and want to investigate common investors, and not the over-shorting situation that started this all, or the blatant collusion and market manipulation. More importantly, young people are very, very angry. This incident has shown them all just how rigged the game really is: play their game by their rules, and the moment you start winning, they’ll flip over the table. Long-term, I expect to see a lot of people abandon stock investing and move to other venues: precious metals, crypto-currency like Bitcoin, real estate, and who knows what else. What happened here, on January 28th, was unprecedentedly blatant: not the worst thing Wall Street has ever done – far from it – but the most blatant one. It will have giant ripples that will last for decades.

Toward the end of the day, all the stocks that had high activity levels earlier this week closed in the red, though they picked up in the afterhours. Tomorrow is Friday, when a lot of options contracts will expire. I’m very curious to see what strange new dirty tricks The Powers That Be will roll out tomorrow. If shares of those stocks end above certain critical price points, that will set off a giant short squeeze. VIPs would do anything to avoid that. Nasdaq’s CEO has already said that they’ll halt an entire stock’s trading if they see high levels of social media chatter. In a way, that gives them the license to manipulate the market any which way they want, provided they can point at some posts they didn’t like later on, if they feel like it. Might makes right, eh? Tomorrow will be ugly… I wouldn’t be surprised if the r/wallstreetbets community on Reddit got shut down completely due to all the external pressure from all the VIPs for whom they constitute an existential threat.

Nonetheless, it’s pretty funny that a prophecy came true: those crazy glorious bastards really did drive the price to $420.69. Today’s high point – though briefly – was $483. Not a bad run for a stock that was just $37 only one week ago.

In covid news, there is a disturbing new report from the UK’s Economist Intelligence Unit. (No, I’ve never heard of them either. Heh.) The report claims that after vaccinating all the critical population, Canada won’t achieve full mass vaccination until mid-2022. The report estimates that Canada will lag six months behind the US and Europe. Seeing as Canada has no leverage and no vaccine-manufacturing capacity, that’s certainly possible. One minor consolation: the EU would not be able to block the exports of Moderna’s vaccine, which is manufactured in Switzerland, which is not part of the EU. But Pfizer’s vaccine could definitely end up being held hostage because, once again, might is right – and there is no such thing as a fair game. Hopefully, that report is just a particularly disturbing exercise in creative non-fiction. Hopefully, the recent reports of just how few Pfizer doses Canada will get are wildly inaccurate. Hope everlasting…

Good night, y’all.

Plague diaries, Day 320

Wednesday night.

An excerpt from a message I sent to my investing-related email group earlier today:
“This. Was. Epic. This was the revenge of Millennials on the industry that brought you the 2008 financial crash. This was the financial equivalent of the French revolution, with a mob of peasants decapitating their sovereign God-given ruler. This was as close to redistribution of wealth as we’ve seen in quite a while. This was the death knell of Melvin Capital, and any other hedge funds who were so greedy that they shorted 138% of outstanding shares. That was hubris. This was payback. This was karma. This was revenge.

I invested… not the plurality, but close to it of my portfolio. As of right now, my portfolio is up 153.4% from where I started in May. Full and fair disclosure: after 12 peaks with Amazon, my ability to hesitate has evaporated. I don’t jump at any risk in front of me, but if I do the math and find that the odds are in my favour, I will rush at that risk head-on whereas a baseline person would either back away slowly, or maybe just dip a toe instead of a significant chunk of their portfolio. I had fully prepared to lose the money I’d put into into GME on Monday.”

I sold my Gamestop stock as soon as the market opened today for $293, or a 276.1% gain. This is unreal. This still feels so very unreal. Each time I log into my online brokerage account, I have to laugh at the absurdity of the numbers staring me in the face. This is it. The endgame. I have won. Through the combination of intestinal fortitude, some sharp analysis, occasional recklessness, and plain dumb luck, I turned my life savings in May and turned them into an impressive amount that has exceeded my retirement goals. And my other stocks have yet to grow and fully reach their potential… (Granted, none will grow as fast as Gamestop, but it’ll still look mighty impressive in six months.) Of course, I still need to pay taxes, yada yada yada, but I’ll still have plenty left at the end.

Gamestop’s adventure will continue, but it will do so without me. Like I wrote earlier, I strongly suspect that there’ll be highly unethical shenanigans. Earlier today, just about every online broker suddenly claimed technical difficulties that kept people from buying GME (aka pushing up the price) for as long as several hours. Either the combined might of Reddit broke the Internet (which, to be fair, is not impossible) or The Powers That Be have decided to start playing dirty. Online and in the media, financial professionals and hedge fund people are either laughing and congratulating the Reddit folks, or utterly horrified and issuing empty threats of lawsuits, investigations, etc. That’s really exposing the existing hypocrisy: when large companies conspire to manipulate a stock price, that’s fine – but when 2 million people come together and go “oh wow, this stock is cheap and ridiculously oversold, let’s tell all our friends!” then that’s bad. Heh.

A lot of random everyday people on social media are seeing this hypocrisy, and learning about shorting, and especially naked shorting (which is not nearly as kinky as it sounds, alas), and realizing just how ridiculous the current system is. Some financial VIPs/pundits/talking heads have gone so far as to say that discussing stocks on social media should be illegal, or that the stock market needs to be frozen for a bit to allow major players to readjust their positions. That is every bit as ludicrous as it sounds. It looks like the main hedge fund behind the shorting effort, Melvin Capital, might go broke. It looks like a few other hedge funds might join it. If and when they decide to beg Congress for a bailout package, things will get especially interesting.

This is historic. This will inspire books, docu-series TV shows (like the ones Netflix and Hulu made about the ill-fated Fyre Festival), and of course a movie. I pledge to pre-order every single one of them. This really is an epic saga, eh. In the months to come, we’ll learn the hedge funds’ and major movers’ side of the story, and that will be really fun to read about. (Come on, there is no way every trading platform just spontaneously took a break.) GME traded between $249-$380 today, and is at $292 in the afterhours. I wish only the best of luck to all the crazy bastards who chose to remain on that train. The r/wallstreetbets community on Reddit has grown from 2 million to 3.9 million users in just the last 72 hours. That is utterly insane. A lot of these users seem to be suspiciously new, and prone to posting random things encouraging people to sell Gamestop and buy other stocks. Also, the community’s Discord channel (a sort of advanced chatroom) got allegedly sabotaged by outside provocateurs who wrote some really bad things in non-English font (so the auto-mods wouldn’t be able to spot and delete them), took screenshots of those posts, and sent them out. Like I said, an awful lot of dirty tricks…

Today was amazing and perfect, eh. I wish I could preserve it in amber and revisit and re-live it over and over whenever I chose. Okay, so one thing was less than perfect: I definitely shouldn’t have drunk an entire bottle of champagne. That was a definite overkill. (But a nap and two Tylenols took care of that.) I kinda wish they sold solo-sized half-bottles of champagne, but now that I actually wrote it down, I realize how goddamn sad that would be.

In far less epic but just as interesting developments, I’ve figured out how to make hardboiled eggs with my instapot! This is actually mildly interesting… Twelve years ago, it’d take me 45 minutes to make a dozen hardboiled eggs: 15 minutes each to boil the water, to let them simmer, and to cool them. Five years ago, I bought a fairly complicated kitchen gadget that would pressure-cook up to eight eggs at a time. That still required quite a bit of work, but took just 10 minutes or so. Now I can just throw them into my instapot, splash some water on top, et voila! – perfect hardboiled eggs just five minutes later. I’m very well aware that not everyone can afford a $100 Instapot (I certainly couldn’t when I was younger), and this is yet another clear and visible way in which pricey technology can make your life significantly faster and better. (Because hardboiled eggs are delicious, and everyone should have them daily.)

And finally, in covid news, this is pretty funny. Oklahoma is trying to get a $2 million refund for all the hydroxychloroquine they bought from the private sector back in April. At the time, that anti-malaria drug was being promoted as a miracle cure against covid, though that was later shown to be wrong. If you read the earliest entries in this blog series, you’ll see that I’d mentioned hydroxychloroquine on my Walmart shopping list, back when xgf and I were hiding out in the tiny town of Deep River. Like everyone else, we tried and failed to get our hands on it – it was yet another thing we could do to slightly boost our odds. Well, it looks like Oklahoma got carried away a bit. (Utah was the only other state to buy that drug from a private company.) In retrospect, it seems pretty funny, but it may have made sense to them at a time. Alas, there’s no malaria in Oklahoma (though who knows what global warming will bring), so that particular gamble didn’t pan out.

Good night, y’all, and join me in the worldwide celebration of Wall Street’s greed coming back to bite it.

Plague diaries, Day 319

Tuesday evening.

There are other worlds than this. In another world, nine days ago another version of myself didn’t get retrospective about my failure to take Tesla and Bitcoin seriously, and didn’t vow to try and take more risks in life. That version of myself never invested in Gamestop after seeing it on Friday evening. That version of myself is probably mighty depressed right now for not having jumped on that opportunity. In yet another world, a far more aggressive and risk-tolerant Grigory sold everything on Monday and put it all in Gamestop. That Grigory made a lot of money but he probably also speeds in school zones, gets in fistfights with strangers, and might not be the best influence. In this world, here and now, I sold a fairly large part of my portfolio on Monday morning and spent it on Gamestop to see what would happen next.

In this world, I might be able to triple my investment in only two days.

Today, short-sellers never managed to drive down Gamestop’s stock price, as more everyday investors and more VIPs bought in and spread the word. The stock price went from $80 to $150 in one day. And then, minutes after the trading hours ended, Elon Musk tweeted a single word: “Gamestonk!!” Musk is the richest person in the world and has 43 million Twitter followers. Right after he tweeted that, the afterhours price of Gamestop rose from $150 to $240 (no, this is not a typo) as his legion of fans rushed to buy.

This is the end. The hedge fund that had tried to short more shares than ever existed will be done for. As far as I can tell, all of the short-sellers will end up having to cover: they’ll have to buy those shares at any available price lest they lose even more than they already have. It’ll be frankly phenomenal, even more so than today’s 92.7% price increase prior to Musk’s tweet. I dislike Musk as a person and I mock his continuous attempts to reinvent subways that would include poor people. At the same time, I love his ideas for space exploration and SpaceX. And with that single tweet, with just one word, he helped a lot of amateur investors on Reddit make their dreams come true. My opinion of Musk will remain complicated, but it certainly improved today. In a just and rational world, no single person should have so much power, to wipe out billions of short-sellers’ holdings with a single word. However, this world of ours is neither rational nor just, so it’s all good.

If I had to guess, I’d say that the population of r/wallstreetbets consists mostly of Millennials and Zoomers: everyone between the ages of 18 through, say, late 30s. Our generation suffered greatly in the aftermath of the 2008 financial collapse. We got hit with constantly increasing college tuition prices. We entered adulthood only to be greeted by the worst unemployment levels since the Great Depression. We survived multiple “once in a lifetime” financial crises. (So that means we each get multiple lifetimes now, right? Heh.) And here we are. This is collective action. This is redistribution of wealth beating the elite at its own game by its own rules. This is the first of many strikes to come. This is revenge.

I can’t even imagine what will happen tomorrow… Perhaps this stock’s price really will hit the once-jokey goal of $420.69. Perhaps people will cash in their gains and it will slip back to merely $150 per share. Perhaps it will exceed $500 and get close to $1,000 by Friday, when options expire. Literally anything can happen now. Tomorrow, the funds I’d used to buy this stock will finally settle. As curious as I am to see just how much higher it can go, I’ll probably sell and take my gains: if this plays out the way I think it will, I will have made my annual salary (or more) in the space of just two days… There will almost certainly be some potential gains I’d end up leaving on the table, but no one can ever predict the zenith point. (Or the rock bottom, for that matter.)

I have this small and private ritual… Whenever I’m about to purchase some stock, I always say to myself out loud, “I accept the risk.” Whenever I’m about to sell, I say “I accept this profit.” This clear and verbal affirmation helps me put my mind at ease and commit to the decided course of action, much like you have to make peace with your subconscious and relax before you enter a hypnotic trance. The money I invested on Monday will likely triple when I sell tomorrow. It may quintuple, or octuple, or even more in the days to come – but I’ve done my part to help the momentum, and I’m not that greedy. If living in Nevada for 10 years taught me one thing, it’s that you haven’t fully won until you walk away from the table and cash in your chips. As one of my favourite quotes goes, “And never think about the past. No regrets, ever.”

In any case… In covid news, things are getting uglier in terms of the geopolitical vaccine situation. I wrote about Pfizer’s limited supply earlier. Now AstraZeneca is saying they won’t be able to deliver all the promised vaccines to the EU either. Obviously, no one is happy about this, but things are getting heated. Germany’s health minister Jens Spahn wants to stop vaccine exports from the EU to other countries until Europe gets its “fair share.” Right now, it is unclear how serious that proposal was, or how likely it is to succeed, but the very fact that it’s on the table is scary, and quite bad for international relations, now and later. It is an idea, and ideas can be dangerous, and contagious, and remarkably persistent. This will be one very ugly year, eh.

I hope y’all had a day that was at least 10% as awesome as mine was, and I hope you, unlike myself, will be able to get some decent sleep tonight. I’ll likely stay up late, reading, thinking, anticipating. Because in the end, I accept both the risk and the profit. Good night, y’all.