Grigory Lukin.com

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.

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.

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.