Welcome to an American Tragedy Waiting to Happen

To preface this post...

I am not a financial advisor. You should NOT read this post looking for advice regarding stocks, investing, or the market. 

Now that that's out of the way... have you guys seen what's going on with GameStop?

I know, it's been all over the news. As I write this post, the GameStop stock is currently trading at over $300. About a month ago it was less than $15.

This screen shot is from 31 Jan 2021

People unfamiliar with the stock market might think that this is amazing and shows that GameStop is doing really well and that if they buy the stock, they'll make money. People unfamiliar with Reddit might be trying to figure out what it is and why it's causing GameStop to trade at such an inflated price. 

Guys, this whole thing is one giant troll.

I mean that in the Internet sense.

Yes, some people are doing this to mess with Hedge Funds. Yes, some ordinary people are going to make a lot of money. 

However, this is an American Tragedy waiting to happen.

This all started when some dudes on a Reddit page noticed that a Hedge Fund was planning on shorting the GameStop stock in the hopes of making a ton of money. This is not an unusual thing to happen in the market - most financial institutes are just smart enough to not advertise what they are doing to the general public. How or why the people of Reddit learned this information isn't super important. We can assume it was public information or at least released publicly. 

What is important is that these people on Reddit - because of nostalgia, wanting to stick it to "the man", pull of the biggest troll of their lives, or to deal with their boredom from the pandemic - decided to buying up the GameStop stock. Thus they drove up the trading price.

More people jumped on the "buy GameStop" train and the value of the stock shot up. This meant that the Hedge Fund that made a bet to short the stock were going to lose a ton of money.

Now, I don't really like the practice of shorting stocks - I don't think it's all that cool to bet on someone or something to fail - so I don't feel much for these institutions. But I'm also not going to go out and tell people to buy GameStop or any of the other stocks these Reddit people are trying to drive up. 

GameStop stock is not work the $300 it's currently trading at. 

What does this mean?

It's a massive train wreck waiting to happen. 

Here's where we get to the tragedy. If you need a refresher on what tragedy is, it's basically when a story ends badly because our protagonist has a personality quirk that's actually a fatal flaw. Think Hamlet or Othello from our days studying Shakespeare (assuming you guys studied this). If you want a quick deep dive into the genre, go watch the Overly Sarcastic Productions video (link here) that came out a couple of days ago. It's funny and informative.

See the thing about the stock market is that it's just another type of gambling. By buying a stock, you are betting the value will go up. The value of a stock usually, but not always, reflects how a company is doing. There are other benchmarks that should be watched and some stocks are traded at future/potential earnings instead of real/current earnings which adds another layer of risk. People who know what they're doing know that there's no guarantee that the money they put in the stock  market will ever be seen again... even if there's also the chance they'll make a ton of money.

From my perspective as an outsider of the situation looking in, I'm entertained by what is going on. A bunch of people on the Internet getting together to disrupt the stock market and stick it to a bunch of billionaires is satisficing in many ways. Its a whole new level of trolling.

But there's going to be collateral damage… and I don't mean those Hedge Funds that are going belly up. Real individual people are going to be harmed by this. 

Though I've been avoiding reading the actual Reddit forums, some of my friends haven't and they're concerned by the number of people bragging about how much money they put in to buy GameStop stock. Some people were claiming that they had put in all of their savings or at least their stimulus checks to join in on the buying frenzy.

I want to repeat that GameStop stock may be trading at over $300, but it is not worth that amount.

GameStop is not doing well as a company. And the most tragic part of this story is that they could easily go bankrupt. If that happens, everyone loses their money. There's no refund for a stock from a company that goes belly-up. 

That's the worst case scenario. 

The real tragedy comes from the people who brought the stock when it was at it's highest and how much they're going to lose when the market re-stabilizes. The people who brought the stock when it was still around $15 are going to make a lot of money, but that's not going to be most people. Most people are going to lose all the money and then some that they put into GameStop.

That's the reality.

That's the tragedy.

I don't think that many of those people who helped drive up the cost of the stock realize this. Investment isn't something that the average American participates in on their own. With the push for investment apps and free trading on the Internet, more people have begun to try their hand at it, but it's still not the norm. How to invest isn't a standard class in schools (though I did take several classes on the subject in both high school and college, but they were electives). 

So no matter what happens next, the market stabilizes or GameStop declares bankruptcy, the people still throwing their money at this stock are going to lose it. I don't know when the bubble is going to burst. I don't know how awful it might be (it might not be that bad).

I don't even know what kind of laws and regulations are going to come out of this. And, oh yes, there will be laws and regulations because of this madness.

Like I said earlier, it's a train wreck waiting to happen. I'm morbidly fascinated being entertained by a situation that I know will end badly no matter what. I am a member of the audience watching a play where the actors are inviting the gullible to join them on stage.

Tragedy is cathartic. It's not positive or negative. It simply is. Hamlet continues to be performed nearly 500 years after it was written even though we know how it's going to end. Heck the first monologue in Romeo and Juliet tells us that our two love birds are doomed to die. There's no mystery to the story. We already know what's going to happen. What we don't know is the "how".

Which is where we are in the GameStop stock saga (as I write this post).

Some people might walk away with a lot of money, but the average person is going to get hurt. Seriously hurt - like Ophelia drowning because she went crazy hurt (that's not a spoiler to a 500 year old play).

And that my dear readers, is why this is an American Tragedy.

If you enjoyed this post (or it really pissed you off) please like, share, and/or leave a comment. I love hearing from my readers and I hope y'all like hearing from me.

Until next week.

Welcome to The Comedy Side of Shakespear

Happy belated Earth Day! It was cold and rainy here yesterday, but today is perfect weather to go outside and enjoy Mother Nature. I spent the weekend in New York City being "touristy" and enjoying spending some time with my mom.

We ended up getting tickets to see Drunk Shakespeare, an off Broadway production that runs six nights a week and starts with a shot of pineapple vodka. Last night we saw the drunk version of Macbeth. It was hysterical. I'm not sure how much of the production was improve and how much was rehearsed.

This night's play started with an action to see who will be the "King" and "Queen" for the night. The two people who win an auction then get to sit on the throne, drink a $30 bottle of champagne out of "phallic looking cups", and can interrupt the production twice to make a critique of the designated drunk actor. The designated drunk actor must take four shots before the play starts and will continue to take more shots (up to six total) if the "King" or (in our case) "Queen" don't think they've had enough to drink.

I can honestly say that it was one of the funniest Macbeth productions I have ever seen. Granted, I haven't seen many versions of the play, but Macbeth is not the Shakespeare play that comes to mind when I think comedy.

I have a complicated relationship with Shakespeare. On the one hand, I hated reading the plays in Middle and High School because they were difficult to understand. As soon as one of our teachers found an audio version for us to listen to, my classmates and I had a much easier time following along and figuring out why the heck was going on with Hamlet. I also remember thinking Romeo and Juliet was the worst example of teen angst rebellion gone wrong and not some horrible tragedy.

Now, when it comes to seeing Shakespeare on stage, I am all for it. I love seeing the plays come to life. I prefer the comedies. I remember seeing "As You Like It" when I was 15 in Canada and laughing my butt off.

Maybe I just prefer comedies to tragedies.

In the 90s and 2000s, adaptations of Shakespeare plays were all over the play. You had "10 Things I Hate About You" (The Taming of the Shrew), Disney's "The Lion King" (baby's first Hamlet), and "Romeo and Juliet" (just Romeo and Juliet). I remember watching these movies as a kid and then realizing that they were Shakespearean after reading the plays.

I know Shakespeare's stories have influenced my writing. He had an a amazing way of captivating his audience and appealing to the common people as well as his wealthy patrons. I especially love the poetic insults, though to be honest I usually have to think about it for a moment before I get it.

I would always recommend seeing a Shakespeare play live (since they can be so difficult to read). Drunk Shakespeare or one of the other many parodies that exist are also well worth checking out. Well, I know for a fact Drunk Shakespeare is worth checking out.

Especially since its a different show ever time.

If you enjoyed this post (or it really pissed you off) please like, share, and/or leave a comment. I love hearing from my readers and I hope you guys like hearing from me.

Until next week.