The above is a text exchanged between Chad and I on the day GME was tanking big time.
Too many people think the markets are easy money. They’re not. And this “easy money mentality” is what led people to chase GME and AMC and lose a lot. There was also a ton of misinformation spread on social media regarding these stocks, sucking everyone into buying them. And now a lot of those people are underwater.
The whole saga has been framed as a David vs. Goliath fight, but it was never that. It makes for a good, gripping story, but, like Gary Taubes’s “Good Calories, Bad Calories” book (Gary is really good at coming up with compelling, yet false, narratives), it’s a story that just isn’t true.
The unfortunate thing is that false narratives have consequences. Gary’s false narrative leads people to an irrational paranoia surrounding carbs. The GME/AMC false narrative caused people to lose money.
On our sister site Stockwonk, I wrote an article that clears up a lot of the misconceptions surrounding this situation. I go over what really happened, who really won or lost, whether the market is truly “rigged”, and talk about the bad habits that a lot of people have when it comes to the stock market.