This is an obligatory post to shout out the guest poster who rallied behind GME on January 8th when the stock was around $20. It’s been the talk of the town the last few days as it jumped from $20 to $340. That’s 17x in a short time. Christ, that’s almost hitting a number on a roulette wheel. I like it because it gives credibility to the blog and I didn’t have to lift a finger aside from putting in a couple gifs. Well done!
To all the readers who are looking for more expert financial advice, I’m sure my guest poster would be happy to oblige but we’re going to be charging $99.99 per pick. How can you lose when the stock is going to go up 1700%!
During this volatility, I’ll share what I think will happen and you won’t see me taking a hit. Please note that I exited 40% of my position on UAVS at $11.60. I still own a few shares but in full transparency, I’m running, not walking away from this market. This is strictly me talking and not my expert financial advisor.
The short squeeze that you witnessed is going to cause a trickle down effect. Note that, and I’m not entirely sure this is accurate, this squeeze was actually pulled off by WallStreetBets (seemingly going private as I wrote this). With now over 3.5 million “degenerates”, this group has weight. If we say each investor on Wall Street Bets has $6,000 dollars, that’s 21 billion dollars of ammo. So when they pressure a stock upward and the hedge funds need to cover the position by buying more shares, you see what you’re seeing. So, what’s the problem?
Bernie Madoff stole 60 billion dollars and helped cause a financial mess where banks were too big to fail. I read for every $12 dollars Gamestop went up, hedge funds lose a billion dollars. If it went from 20 to 340, that’s a 26 billion loss. Does Melvin Capital have $26 billion. Doing a quick Google search, Melvin Capital has $12.5 billion in assets. Where is the other $13.5 billion coming from? Other Hedge funds perhaps. I think you may see what I’m getting at. Someone is going to be on the hook here for billions of dollars. I frankly don’t know if a billion dollars is a lot or a little. If what Bernie did was lose $60 billion, I have to say that a few billion isn’t the end of the world. If this same event happens with AMC, NOK, BBBY, BB, PLTR. Who know what’s next. The fun and games are over though in my mind because if that Dow crashes wiping out billions, you’re going to be crying if you’re in it. I will not be.
Great Ground Floor 4 coming tomorrow.