GameStop And The Rationality Of The Irrational

Editor's note: The following piece is from Identity Element, reposted with permission. You can read more from the site and/or subscribe here. It's free. Unless you have been under a rock the past week it is highly unlikely you did not hear the clamor regarding r/wallstreetbets. This decentralized community took advantage of a structural inefficiency in the stock market by launching a highly coordinated assault on heavily shorted names such as GameStop, forcing market makers to hedge their posit

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9 thoughts on “GameStop And The Rationality Of The Irrational

  1. H, are you really implying that DFV is really Citadel? That it orchestrated r/wsb to take control of Melvin and increase its stake in RH?

        1. So, the implication of Citadel and P72’s investment into Melvin was not that specific.
          In fact, the identity of DFV has been uncovered by the Associated Press — search “Roaring Kitty” and you can see the press releases there.

          What I mean in the conclusion is that there are far too many complexities to accept the narrative of WSB usurpation of the establishment at face value. Given that capital is still shifting to the players hit hardest by this, one can assume the profit machines of many funds are functioning just fine.

    1. Should be a tax on transactions generated by algorithms.

      Buy_sell……. X%
      Cancel order…3X%

      SEC report taxes received, by name, amounts in each category for top 20 entities quarterly.

      Call it the “Robinhood” regulation.

  2. I have been aware of this meme investing from afar, but not knowledgeable. I appreciate the insight this post has given me. H’s website has helped me immeasurably to understand some of the very significant changes taking place in the investing world over the last decade or more.

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