What a Ride
January kicked my ass.
The GameStop saga will be one for the ages. Suffice it to say, I disregarded my own advice, especially perhaps the #1 Rule: if it’s good enough for a screenshot, it’s good enough to sell. Alas, I am still in the game (Stop), scalping premium on option trades instead of cashing out where I had originally planned to exit. Canceling that limit order – and taking the subsequent screenshot – is going to haunt me for a while. Which is good, because I need to be reminded from time to time what happens when you abandon your own exit strategy.
Stock aside, I still stand by my earlier post about GameStop the company. News out yesterday indicates that they’re creating* a Chief Technology Officer position and slotting in the former Amazon engineer lead for Amazon Web Services. They’re also bringing over the the Director of Customer Service at Chewy to be the Senior Vice President of Customer Care. Finally, they got a guy who was doing fulfillment at Amazon and Walmart to be Vice President of Fulfillment. None of which means anything to anyone here other than the fact that there’s now a chance that GameStop can pivot away from being Pawn Stars and towards being some combination of Micro Center and… something else. Maybe like a comic book store hosting Magic: the Gathering tournaments?
Or maybe they’ll fall on their face, Chuck E Cheese style.
In any case, don’t worry, this will be the last GameStop post I do this year. Next time we reconvene on the subject, perhaps we’ll be talking about how the company has gotten into the digital license reselling market, how it rents out VR/AR rooms by the hour (and the predictable downsides to that), or the partnership with Geek Squad in custom building PCs onsite.
Or perhaps I won’t mention it at all, seeing as how we’re 1 month into 2021 and I’m already exhausted.
*It’s telling that GameStop didn’t have a Chief Technology Officer position until just now. We all knew it was mismanaged, but that mismanaged?
Posted on February 4, 2021, in Commentary and tagged Exit Strategy, Future of Gaming, GameStop, Stock Market. Bookmark the permalink. 8 Comments.
I would certainly hope you would do a GameStop 1 year later post
Hearing about GME is scheduled for Feb 18th, guessing it will be the most watched thing CSPAN has ever done.
I’m out, didn’t get out at the peak but still got out with gains, yet even those gains feel like a lost opportunity vs what they could have been. Whole thing has left me feeling cheated, because I 100% believe if they don’t stop people buying last Thursday, the stock continues to rocket that day and likely into Friday, and a numbers that retail people were waiting for (1k for me personally) would have been hit. I’m also hoping it’s not ‘done’ and it spikes again for everyone still in.
Outside of the cheated part, I think everyone is asking “why didn’t I just sell when I was up X”, but honestly with how the stock was going it was difficult. I mean, normally if you bought a stock and a day later you were up 100%, you’d consider that a huge win and get out, right? GME was doing that daily though, and ‘the plan’ was working, so hard to blame people for holding.
When the book/movie comes out about this, at least we can say we were apart of it, even if at the same time it’s going to remind us of the screwjob and what could have been.
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Oh, absolutely. Robinhood fucked us all and I hope they are litigated out of business.
I’m still technically up 20% overall even at today’s price, but not getting out at $400 is something I’m going to regret for a while. “Hindsight is 20/20,” yeah, but that was actually where my limit order was originally set before I turned it off. And when the brokers started limiting the stock… why didn’t I recognize that as when the music stopped? Or why not at $350, $300, $250, $200, etc. etc. etc. It’s dumb and out of character for me to diamond hands and go down with the ship. I’m not even this greedy in the WoW AH.
We’ll see where things go. Since I still have stock, I’ll be selling a covered call each week and getting some residual premium while I can, and catch any (unlikely) bumps up. Or maybe I’ll hang up my GME hat and stop stressing about this whole endeavor.
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Cancelling a limit at 400 does hurt. I had mine set at 500 for a bit for half of all shares, then when it was flying fast above 400 I cancelled it. Never would have filled, but just the same I also got caught up. Or maybe cancelling WAS the right call because if RH and others don’t stop the buys it DOES hit 1k+ Thursday and not selling at 400 or 500 was the right call. We will never know, which hurts.
Also really sick of all these wall street guys doing interviews now saying “see, this is what happens, it was never a squeeze!”, yet they completely ignore the buy halt or try to say it’s a normal thing, despite it never happening before (that I am aware of).
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A young guy I work with had GamesStop stock at the beginning of the year. He didn’t have a lot, maybe $50 worth. He sold it a week prior to the insanity. I told him an experience I had many years ago. Here in work a few of us would chip in $5 a week to buy lottery tickets. We never really won anything. So someone suggested maybe we should buy stock. So we looked at financial news in the Wall Street Journal, this was late 1999 and saw Vlasic was coming out with a hamburger stacker pickle. A pickle as big around as your hamburger and about 1/4” thick. The stock was fairly new and selling for about $5 a share, and the prospect for the stock was around $15 in 12 months. So we took our $500 and change, bought 100 shares and figured we would triple our money. By July we saw Campbell Soup had spun off the company in 1998 and lumped in a lot of its debt. By the time executives were paid out, creditors, etc, our 100 shares were worth about $1.15. It was a gamble, we thought we did our research, and in the end we made more than if we bought lottery tickets. Lol.
I bought in last Monday, 58 shares at around $76. I set a limit sell at $750 (lol), but of course I was watching it like a hawk constantly despite having barely any of my total cash invested in it.
The first red flag was around Wednesday when it became some kind of class warfare “get the hedge funds” thing. Everyone was getting all hyped up about taking down Wall Street and I was sitting there like “guys I’m just trying to get something for nothing here…” In retrospect I should have immediately sold everything then, so lesson for the future.
The second red flag was all the Thursday business. FWIW I did get spooked by the freefall to $132, and when it went back up to $250ish I immediately sold 20 shares to recover my initial investment. At least now I could relax since I could never lose anything. If I had paid more attention I would have realized that the jig was up at that point–GME squeezed up to the 400s, which was something like a 1000% gain over the 40s where it was holding earlier. That’s bigger than the much ballyhooed VW squeeze, which was only a 500% spike from $200 to $1000. But I was an idiot and I believed it was still destined for greatness, and Friday’s gains back up the 300s just confirmed my biases.
Then came Monday, and the beginning of the end. By midmorning I was smelling the keen stench of decay, and I dumped the remaining 38 shares at around $250 to end with a $11000-ish profit. Not bad for free money, but I could have scored a few thousand more had I been less stupid and greedy.
I’m not into playing the stock market, it takes too much time and I don’t have the cash reserves to play games at a level I’d find interesting…..
In any case what this event did was to put on the front pages of newspapers that the current financial system has degenerated into a casino game completely disconnected from reality. A casino, which may even be rigged.
Honestly, I think that I will support any politician advocating for the complete separation of investment and savings banks, or even better the creation of a completely different world-wide currency used only for finance. All this mess has no use whatsoever for society and should be relegated to casinos, like all the rest of the gambling is.
Cue the “Always have been” meme.
Even putting aside options – which are 100% casino plays – the average retail investor has next to zero control over their investment in a stock. Sure, buy stock from a company you like or think will get bigger over time. But then the board decides to offer more stock (diluting share price), or hedge funds throw a dart and pick that company to massively short, or analysts decide that the company’s 5.0 P/E ratio is too high even when a similar company is at 15 P/E.
The biggest boondoggle IMO is how people are taught economic models that involve rational actors. And yet John Maynard Keynes said, “the markets can remain irrational longer than you can remain solvent.” Which basically sums up as ¯\_(ツ)_/¯.