Grigory Lukin.com

Monday night, and I’m still a bit buzzed from an earlier solo celebration.

Today was… huge. Simply HUGE. If I were the kind of guy who wears a hat, I’d tip it to the fine madmen of r/wallstreetbets. What they’ve accomplished is difficult to adequately describe. Earlier today, Melvin Capital (the hedge fund that had shorted Gamestop) had to be bailed out with a $2.75 billion infusion. Not million – billion. With a B. That was the only way Melvin would’ve avoided a margin call due to its remarkably bad decision to overshort that stock. At one point earlier this year, 138% of Gamestop’s outstanding shares had been shorted. If that doesn’t quite make sense (138% being more than 100% existing shares), that’s just the sort of funny math that happens when greedy people get carried away.

Earlier today, the stock went all the way to $159 before dropping to $61 (more shorting) and ending the day at $76, with $88 in the afterhours trading. That is huge, y’all. Not only did it close up for the day, not only did it set off multiple trading halts due to sheer volume, but much more importantly – the army of Reddit managed to defeat a multi-billion hedge fund. There’s still a ton of VIPs shorting the hell out of this stock, and I can’t even imagine what will happen later this week.

I joined the party too. Last night, I analyzed the daily movement pattern to see around what time each day the concentrated shorting begins. (I am, after all, a financial analyst.) Earlier today, I liquidated some of my top-performing stocks (45% gain is a fine ride) and moved that money into Gamestop, timing it almost perfectly. For posterity’s sake, my average price was $77.90. And now we wait… The stock’s fundamentals, even aside from the short-squeezing potential, are quite good – and video games will become an even bigger industry later this decade. The talking heads on CNBC were absolutely losing it today, while Jim Cramer – ever the opportunist – jumped on the r/wallstreetbets bandwagon. Heh.

What I did today, jumping on that bandwagon, wasn’t very different from plain old gambling, but there are two caveats. First, I put only a small percentage of my portfolio toward this. And secondly, this is the first real excitement I’ve felt in many months… Amplified by the fact that a whole lot of other people my age, in my general situation (locked in and with nothing to do) are in the same boat and sharing the same messages of enthusiasm and “eat the rich” with one another on Reddit… That’s not a bad stand-in for a real-life community, eh. My money will settle on Wednesday, and I’ll be able to sell my stock (or hold it until Friday?..) at that point. There might be yet another celebratory bottle of champagne in my future.

I’m still trying to understand what sort of subconscious bias had led me to ignore the r/wallstreetbets community… I knew they existed – I just never bothered to look at what they were actually talking about. My exposure to them had consisted of memes and funny cherrypicked screenshots people shared on Twitter. Had I wanted to, it would’ve taken just 20 seconds to see what all the chatter was about. Then maybe I wouldn’t have missed that opportunity to get in at a cheaper price last week. Ahh well, no regrets. I’ll just have to make sure not to believe random hearsay and not to underestimate (or even worse, ignore) future communities I encounter, online or in reality. This cognitive glitch is something I hadn’t even been aware of, and I feel like it’ll save me a lot of trouble down the road. (And maybe get me even more opportunities, money-wise or not.)

In covid news, the pharmaceutical giant Merck stopped its development of two covid vaccines: they produced a weaker immune response than other vaccines did. The immune response was also weaker than in people who had beaten covid on their own. There goes that, I suppose. As far as I know, that’s the first big player that folded – the rest are still developing theirs. Dr Fauci said earlier that the Johnson&Johnson vaccine approval could be just a few weeks away… February will be an interesting month.

And now, off to enjoy the sweet victorious dreams in the aftermath of helping my 2 million new friends drive a hedge fund to the brink of collapse. Today was a good day. Good night, y’all.

Sunday night.

Today was relatively fun: I finally drove out to the High Park that I’ve been hearing about ever since I moved to Toronto. (When it takes close to an hour each way to drive from the suburbs, parks aren’t a high priority.) It was a chilly 22F (-6C for all y’all fellow Canucks) and there wasn’t much to see in terms of nature, but it was nice. I think that was the most walking I’ve done since my big trip to see Ontario’s abandoned mines. Toronto’s High Park is a lot like New York City’s Central Park, so the place was jammed. (I’m guessing I wasn’t the only one with the bright idea to enjoy the outdoors when everything else is closed.) It was a nice workout for myself, for my car battery (gotta turn it on at least once a week), and a fun flashback to the pre-pandemic times when it took 10 minutes to find parking on adjacent streets.

I doubt I got any vitamin D through my exposed forehead, but hey – variety. Took some pictures with my good old DSLR but all the squirrels were too skittish to get a good shot. Looks like I finally have a good reason to install that zoom lens I got back in August… I’m curious how the park will change and blossom as the year goes on. I’ve never been much of a nature person, and the only time you’d catch me in a park was if I had to kill some time between meet-ups, so this is quite a huge change for me, eh.

Things are getting strange in the US: as per Washington Post, feds are debating whether or not to charge all the domestic terrorists who stormed the Capitol just 18 days ago. It’s been less than three weeks but they’re sweeping it under the rug at a record-setting pace. The official reasoning is that they don’t want to overwhelm the court system. Unofficially, most of the domestic terrorists were white… If, say, Black Lives Matter had done the same thing, they would have been massacred on the spot, and the survivors would have been prosecuted to the full extent of the law. If this bizarre de facto amnesty really happens, that’ll be the best evidence that there are, indeed, two separate justice systems in the United States.

On a more positive note, I’m downright giddy to see what the Reddit army (all two million of the r/wallstreetbets folks) will do with the Gamestop stock tomorrow. As short squeezes go, this is pretty much unprecedented. If you’re reading this in the future, you have the benefit of foresight in this, as in everything else. Will the Powers That Be prevail and drive the stock price back down? Will it be more of a push-and-pull? How high up will it go during this last week of January, and in the months to come? This is pretty ridiculous, but there is a world where it might, in fact, hit the snarky $420.69 price target that the Reddit folks are after. (They’re smart; doesn’t mean they’re mature, eh.)

What’s happening with that stock is truly remarkable because it’s the fundamental shift in the generational balance of power: from Baby Boomers and their old money to the relatively broke Millennials and Zoomers, who don’t have the big media on their side but who do have the sheer numbers. In hindsight, something like that was inevitable: screw over an entire generation time and again, leave them no money or opportunities, but give them the Internet access – and they’ll find a way to get even. It’s the same way with Russian hackers: when you have just as much raw potential as your western counterparts but you have no money or opportunities (there’s no MIT in the former Soviet block) but you have Internet access and know how to code… Asymmetrical warfare becomes the only logical outlet.

There will be more events like this, more short squeezes on stocks where institutional traders had gotten too greedy with their short-selling. This is just another strange phenomenon to come out of this pandemic. (Incidentally, sea shanties with group singalongs on TikTok became huge earlier this month. That’s equal parts bizarre and amazing and beautiful. What other art forms will we resurrect before this is all over?..) And if the Powers That Be throw the book at those they identify as the ringleaders… well, that’ll be funny if they also let domestic terrorists go with a warning at the same time. Justice may be blind but she sure wiggles her eyebrows an awful lot.

In covid news, there are disturbing news stories coming out of Brazil and Mexico. Their respective official covid death tolls so far are 216,000 and 149,000. Brazil is only second to the US with its 419,000 covid deaths – and that’s before you account for excess deaths… It sounds like pure chaos over there. Both Brazil and Mexico are running low on oxygen tanks, that most basic component of a functional ICU. Their leadership failed them, just like in so many other countries. Their so-called leaders aren’t going anywhere, either, so things are liable to get worse before they get better.

Hang in there, y’all – this year may be a wash but next year… The roaring 20s will be back, eh.