MarcosElMalo2
CNBC Television
comments
Comments by "MarcosElMalo2" (@MarcosElMalo2) on "Reddit rebellion is sparking three market scenarios, and one's really bullish: Fundstrat's Tom Lee" video.
It’s rigged, but I’m not sure if these stock market flash mobs are accomplishing anything if the big players are recouping their losses at the end of the day while many of the small investors get left holding the bag for the ones who got in early and took profits.
This asymmetric warfare, but asymmetric doesn’t always win. Revolutions don’t always succeed—indeed, they often get nipped in the bud long before they get large enough to qualify as a revolution.
What is required for the retail mob to win is coordination, coordination that might be illegal according to SEC rules. I say “might” because it needs to be tested in court to say definitively whether or not mob coordination is legal. Such a test might be too expensive for those individuals sued (civil case) or prosecuted (criminal). Lawyers with the special competence to handle SEC cases are not cheap!
However, HOWEVER, this could also be an avenue of attack to get the SEC rules changed to favor the retail investor. (More realistically, to shift a small amount of favor towards the small investor.) Successful prosecutions, David getting smashed by Goliath, gets the attention of law makers who love votes more than they love wall street money.
Going forward, I think a way to avoid SEC actions is to 1) keep everything out in the open, 2) not organize around a specific stock, although you could publicly analyze stocks, 3) use a media figure to announce targets. An example of this would be 1) & 2) the mob openly organizing into “investment clubs” and creating a tranche strategy (early, middle, late tranches, roughly) to spread out the pain and the reward. Meanwhile, they crowd research potential targets—companies that are being over-shorted, for example. 3) When a target is selected, the media personality/financial journalist/analyst goes on air to announce it.
If “investment club” sounds too cheesy, maybe a publicly traded “retail fund”, with shareholders getting to vote on targets. Or some other vehicle for the pooling of money. All out in the open, with the public announcement coming at the moment the vote is tallied. The vote would be a media event in itself.
2
1