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The Racketeer Podcast
Robinhood and loss porn addicts: BB EP 27
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Robinhood and loss porn addicts: BB EP 27

Jay and I spoke with Ben Berman, Jay’s eighteen-year-old son, who has followed the /r/wallstreetbets subreddit for some time now. Ben is learning about investing the right way, and offers some insight into the GameStop “short squeeze” that sent the stock soaring in the last few weeks.

Photo by Chris Liverani on Unsplash

Some takeaways:

  • Don’t do anything based on what you read on /r/wallstreetbets. Most of it is “loss porn” from people making the worst possible investment decisions. Some of these people are as addicted to the market as a casino as they’d be if they lived in Las Vegas.

  • The GameStop run has exposed some pretty dodgy tactics used by hedge funds, market makers, and platforms like Robinhood. These companies profit from the very destructive mob behavior they claim to abhor.

  • Anyone with a keyboard, “cleaved from knowledge” (as Jay said), can use the internet to be stupid.

  • It’s likely GameStop was a “black swan” event, based on specific circumstances. It doesn’t appear to be an engineered “pump and dump” though it certainly looks like one.

  • Professional traders need to work smarter to avoid situations that open themselves to this kind of ignorant mob raiding.

  • Regulators need to look at the structure of “everyone” discount brokers like Robinhood and the havoc they may be encouraging.

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