Post by Farmduck on Jan 29, 2021 18:08:11 GMT 10
I'm a very small-time sharemarket trader online but I didn't buy any Gamestop. In fact, I only use the Australian Stock Exchange so Gamestop (GME) was never an option. Maybe I'm just exhibiting my Dunning-Kruger side, thinking I have some unique insights into this story or maybe I think the myths around this story have overtaken a lot of the reality. Anyway, here's the basic story as it appears in the media today:
Let's start with the first point. One of the first stories I read regarding this matter was a guy who was "just your average run-of-the-mill" amateur home investor who had made $14 million from Gamestop trading. Now if we do the calculations and find his initial investment was $770K then he was already in the 85th percentile of USA wealth, just on that initial outlay, regardless of any other assets. Maybe "the little guy" has a different meaning in the US.
Here are some of the other "everyday Joes" who have made a packet:
Then there's the explanation for the massive buying power of the Redditors. The r/WallStreetBets apparently has 2 million subscribers. If we follow the usual internet patterns, this possibly equates to only 100,000 regular users, of whom, maybe only 50% bought any GME shares. But since I don't know the actual numbers, let's be generous and say half of all the sub-Reddit's subscribers participated - 1 million people. Now when this started to take off, on 14 & 15 January, $8 billion was spent on GME in two days. That's $8K per Redditor. Are we supposed to believe that all these down-at-heel nobodies each had a lazy $8K lying around the house?
- Small,often unemployed or financially-disadvantaged users take advantage of democratisation of share trading through "rebel" apps
- Plucky insurgents deal major blow to billionaire hedge funds
- Hypocrisy reigns supreme as Wall St squawks and Business media rush to their defence against "the little guy."
Let's start with the first point. One of the first stories I read regarding this matter was a guy who was "just your average run-of-the-mill" amateur home investor who had made $14 million from Gamestop trading. Now if we do the calculations and find his initial investment was $770K then he was already in the 85th percentile of USA wealth, just on that initial outlay, regardless of any other assets. Maybe "the little guy" has a different meaning in the US.
Here are some of the other "everyday Joes" who have made a packet:
- Black Rock Inc, the World's largest asset manager with assets under management of $8.6 trillion
- State Street Global, the World's third-largest asset manager, with $3.5 trillion in assets under management
- Fidelity Investments Inc, with $3.3 trillion in assets under management and a combined total customer asset value number of $8.3 trillion.
- The Vanguard Group Inc, with about $6.2 trillion in global assets under management
- Senvest Capital, a Canadian investment firm which barely even belongs on this list since they only have $C2.8 billion in total assets and that's Canadian moosebucks.
Then there's the explanation for the massive buying power of the Redditors. The r/WallStreetBets apparently has 2 million subscribers. If we follow the usual internet patterns, this possibly equates to only 100,000 regular users, of whom, maybe only 50% bought any GME shares. But since I don't know the actual numbers, let's be generous and say half of all the sub-Reddit's subscribers participated - 1 million people. Now when this started to take off, on 14 & 15 January, $8 billion was spent on GME in two days. That's $8K per Redditor. Are we supposed to believe that all these down-at-heel nobodies each had a lazy $8K lying around the house?