At some point, around 2011, I was associated with a co-worker who was connected around six hours a day to the stock market. He'd actually go leave the confines of the vaulted area....get his smart-phone, and review the stock market while sitting in a wi-fi area.
He and I would have a short conversation at least twice a week....over stock trends. He was a smart guy.....I would readily admit that.
But he was obsessive and compulsive about this business. There was a minimum of one stock trade made daily (usually for $2k to $5k), and it was clear that he was in the day-trader type behavior.
I asked about profits in a year, and he figured (at least for the last year or two)....he was clearing around $100k a year on the plus side. It was like a Vegas-game to him....he knew the odds and had his trade capability geared to sell within a minute or two after he sent the order in. Somedays, he was clearing a thousand dollars profit....somedays maybe five-thousand in profit....and then some days there was the two-thousand loss situation.
He was reaching a new level of obsession, where 'shorts' were now on his mind. 'Shorts' mean more home-work.....more guessing to future trends, and potentially putting in his mind....at least $10k into the bucket.
By the time I'd left the Pentagon....he'd done a dozen of these, and 'winning' the majority of them.
Just in his behavior, I think he was dumping the day-trader behavior in favor of the 'shorts' path to riches.
This week, with all the upswing with GameStop....if you looked at the month-long trend, from $19 a share to $350 a share....the 'short' guys would have come out in force and laid down billion to double-guess that it'd all collapse by yesterday (the last day of business for January).
Total loss on shorts yesterday because GameStop didn't collapse? Twenty-odd billion dollars (so they say) minimum. Some are putting the numbers nearer to seventy-billion dollars.
It's an incredible number of people pissed-off. Some people probably were a quarter-million in the hole, and will have to appear in front of their spouse....explaining this sudden loss of capital.
My former associate? I have no idea what he's been up to....but at a bare minimum, he probably had at least $20,000 bet on a short. He might have been fairly stupid and put $100k up.
The problem here...is a massive mental syndrome going on, with the idea that you know 'shorts' up and down, and can feel 90-percent confident in putting down $10k, $20k, or $100k.....that's it's a virtually guaranteed payoff or 'win'. And in this case....a massive loss.
The need for Congress or the banking industry to hold meetings and investigate this? What? You will investigate stupid idiots who aren't thinking clearly, filled with high-risk behavior, and can't handle money? Then you go and suggest that you need to make laws that only high-risk people can buy stock and will do to with mature behavior? Oh, please.....what a joke.
A nation of addicted behavior folks, and we have to listen to Congressmen/Senators feel sorry for them? No, we don't need this level of incompetent leadership.
Footnote: I don't think the bad-boys who handled GameStop are done, and you might see this repeat five or six times this year.
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