Exposing the Truth | The Meme Stock Movement.

the so-called meme stocks and of course

i've got to begin with amc and those

meme stocks

they're trading this stuff on their

phone all the time when does this go

away or are we going to live with meme

trading forever in the diamond hens and

the fact that everybody online talks

about holding gme and amc

i've been reporting on the stock market

for more than 40 years

i've never seen anything like this meme

stocks and cryptos represent a whole new

element in the financial world hey

everyone meet kevin here it is no

surprise that the pandemic lockdowns

that kept us stuck at home

led to many of us looking for new ways

to build wealth and what a better way to

do it than to

basically buy and sell stocks that were

on a beautiful road of a v-shaped

recovery essentially

straight up for much of 2020 and to help

us along the way

we look towards our social media

connections in the community to help us

with due diligence through reddit or

wall street bans or youtube

through creators like a deep effing

value who have been talking about the

fundamentally undervalued

nature of gamestop since well before the

pandemic but folks

there are some victories and problems

that we have to talk about

with this movement so what's good and

what's bad about this movement well the

first thing we should do is try to

understand where it came from

the genesis and really where it came

from was from us sharing

fundamental analysis online whether it

was deep effing value in 2019 talking

about gamestop or me talking about tesla

in 2018 and 2019

or other folks sharing their research

online subject to commentary

the pandemic just amplified the voices

of creators

sharing fundamental research on stocks

online

and this is really what started the

basis of the wall street bats

momentum style movement but what came

next

led to a lot of good and some bad what

the movement has really turned into

is a movement that is very anti-fear

uncertainty and doubt

pro by the dip pro holding for the long

term pro building

wealth for the long term and being

anti-suit thanks to the disasters that

limited price

appreciation on robin hood when we

started learning about

the shenanigans of the dtcc the robin

hoods the citadels the melvins

even though some of them say hey this

was a three or five sigma event

we could have never expected something

like this we

have enough energy in this momentum

movement to say

retail investors have had enough they're

tired of being beat down

by wall street and the momentum movement

is really a representation

of the average retail investors coming

together with fundamental analysis

and then extrapolating that into a

phenomenal

movement that has honestly turned into a

program

designed to screw the hedge funds and

the people

anti the movement and this has created

some pros

and some cons and those are what we have

to talk about

to be fully transparent about the entire

momentum stock movement

so first let's talk about some of the

good community due diligence

is one of my favorite things about the

momentum stock

movement because the reality is the more

we share our fundamental analysis with

other people with different mindsets and

perspectives

people who aren't sitting in our office

at a hedge fund or

under the same roof thinking the same

way subject to group

think fallacies we can put our research

out into the world and let the world

critique it

a movement of crowdsourcing this

enormous amount

of investment knowledge this is a belief

that kathy wood at arc invest has is

that

research should be shared and it should

be critiqued by others

so that researchers who came up with the

original research can make it better

and more transparent this is really an

idea

that has been popularized by reddit it

has been popularized by

us retail investors and now we're

starting to see wall street style

investors like

kathy wood adopt these practices for

themselves

it's very smart and hands down one of

the greatest things to come out of this

movement

has been community-based due diligence

on stocks and investments

community-based due diligence on what

risks are and what

positive catalysts are we've also

had a massive push by not only

the retail community but also the sec

and regulators at demanding faster

settlement for our stock trades without

getting into the weeds of how settlement

works

basically the gamestop disaster was

exacerbated

by a t plus two style settlement time

frame

where essentially we might trade a stock

instantaneously

but it actually takes up to two to three

days sometimes in the background

for those shares to actually trade hands

and this creates risks in an environment

and can lead to the implosion of trading

gamestop like what we saw when robin

hood and other brokers limited our

ability to trade now knowing about all

the details about t

plus two settlement time frames isn't

super important but one thing the

momentum stock movement has been super

amazing for

is making sure that we get away from t

plus two settlement

this is where it takes two to three days

to settle stock transactions

this leads to information asymmetry

which gives the hedge funds more

advantages

we need to get to t plus zero or t plus

in the afternoon

settlement time frames blockchain might

even help us make this happen

this helps us prevent debacles like what

happened with gamestop where all of a

sudden we got brokerages going

we can't handle trades we can't let you

buy the stock anymore because

we don't have enough stuff settled and

it's creating too much risk

in fact consider this the momentum stock

movement is also one

that is a huge proponent of demanding

better transparency

why don't we have better transparency on

short interest data why don't we have

the same transparency that hedge funds

have

why do they have informational asymmetry

advantages that that

give them better opportunities than us

what makes them

better than us this is almost class

warfare by the textbook what gives them

opportunities that we do not have and

that sort of transparency

is something the momentum movement is

very very very good

at promoting however it does

get affected by the risk factor that

when the momentum movement devolves into

a witch hunt against people who

potentially provide

alternate opinions we actually end up

producing transparency

which is very dangerous to them anyone

who recommends selling is the

enemy which is why i become a hated

figure on reddit's wall street bets

but the momentum movement is also really

really really good

for helping all of us as traders or

investors

get better and more transparent pricing

see consider this

five years ago it was abnormal to have

free

stock trading now free stock trading is

almost the norm in fact free options

trading

is almost the norm if anything stock

trading is totally normal to be free

and options trading is becoming more

normalized as a free option

but what we've also discovered is that

we're not always

being told all of the details that go

into our pricing and so

while we've gotten what appears to be

free we might actually be

paying in other forms that are much more

complicated to help us actually shop for

the best pricing models

see for example over the last few months

six months

we've all become very familiar with this

phrase payment for order flow

which is where we actually become the

product

not the customer our decisions become

a revenue source and not the customer

who deserves to be taken care of

the other thing the movement is doing is

helping perpetuate more transparent

pricing for us to be able to buy and

sell stocks

i mean think about it we haven't even

really popularized payment for order

flow until the momentum stock movement

but now we know ah there's a difference

between good pricing and premium pricing

and that one is the best and one is

actually not the best

thanks to hearings in congress on this

we already know

that there are more shenanigans at play

that we demand more transparency on for

example

we're told that when we do trades

brokers have the incentive to get us the

best pricing but in congress

through testimony we have heard that

best pricing actually isn't

the best pricing that potentially good

pricing

is best pricing and that the best

pricing is actually known as

premium pricing now we can start

demanding change and comparison options

so we can finally figure out who is the

cheapest is it fidelity td ameritrade is

it robinhood is it weeble

we don't know it's hard to compare right

now but the movement is creating

more demand for change and the sec is

listening

and we will be getting more transparent

pricing very soon and the movement

is to thank for that so this is a little

bit of a mixed bag

but the momentum movement demands

transparency and the more we highlight

the demand for transparency and the more

the more we vote

with the usage of apps that we choose to

use the more transparency ultimately

we get for example after the debacle of

our payment for order flow

we had companies like public.com come

out and say

we're not going to use payment for order

flow anymore

now we have also seen a whole lot of new

folks begin to invest

this does create a little bit of an

educational balance because a lot of

folks started investing in 2021

a lot of folks started investing in 2020

and we've had

way more folks get into investment than

we were investing in general than we've

ever had before

this is really good but it does come

with a risk factor that

we do have to balance education and this

is something that's very complicated

because the last thing we want as a

movement

is to see folks coming into the movement

yoloing

or making bets like you only live once

hence yolo and then ending up losing or

winning big on two-week call options

then if you win big doing it again until

you end up losing

it kind of turns into a little bit of a

casino fallacy

and ultimately that has a risk factor of

leading people to get jaded and leave

the market

and this is where educated investing

will become something very very

important as part of this movement

and education is available but actually

getting folks to be educated

is on everybody themselves everyone

watching

should be interested in doing whatever

they can to promote their own education

now we do know that the sec and

regulators are pro

well essentially probing how investors

invest

and how new investors can basically open

up margin or option accounts and sure

maybe in the future there'll be

requirements that

essentially require folks to prove that

they're educated in options or

prove that they know when their account

is going to be exposed to a margin call

rather than be surprised

that all of a sudden you have too much

debt on your stocks and they can be sold

at the bottom of the market

more disclaimers might come but

ultimately

i'm a big fan of the free market and i

lean towards the odds that

the sec probably isn't going to do

anything in terms of regulating

the momentum stock movement if anything

we'll see more transparency and pricing

from brokerages maybe we'll even see

brokerages be required to act as

fiduciaries

for our case to make sure we always get

the best pricing whether that's

good or premium pricing so

this is very very important but

ultimately

i expect the sec when it comes to us and

education

the sec is going to throw their hands up

and say hey look you being educated

is on you now many of you know that i

have amazing programs on building your

wealth linked down below

including one on stocks in the

psychology of money and a separate one

on real estate investing in property

management

you should check those out linked down

below over this next

four to six weeks we're going to be

adding a lot of content

including content on technical analysis

and options trading

which are a big thing that we really

want more nuance and detail on

so that content will be coming out by

the end of july so stay tuned for that

the next risk is the bandwagon fallacy

see with momentum stocks they have a lot

of momentum because

they gain a lot of social traction and

that leads a lot of people to buy into

momentum stocks

as they are rising and unfortunately

sometimes when they are

starting to peak this creates massive

risks which is something very important

to remember when you're investing when

stocks are going

up you are increasing your risk

exponentially

when stocks are losing value when

they're falling you're actually

decreasing your risk in purchasing those

assets

that is a big danger that the bandwagon

issue

creates because we see more people in a

stock we want to be in we buy in high

that is risky and that is a risk to the

entire movement

the more people get burned by a movement

the less supporters you end up having

when we look at candlesticks on a

computer we see green we get excited

wrong emotion

the opposite emotion that we should have

things are getting more expensive you're

shopping in a mall that is now more

expensive

when things are going down we should be

seeing ah black friday sale things are

getting cheaper but instead

we get fearful and we get that feeling

in our stomach and our gut that oh my

gosh i made a mistake

i did the work i i made a huge mistake

and i did a horrible thing and my

portfolio is getting ruined

and what happens well usually when we're

in pain

something known as fight or flight sets

in but the problem is

you can't fight you can't fight stocks

going down

because they're inanimate objects

instead

we tend to flee we sell when things are

going down this is an example

of the danger of the bandwagon fallacy

that is

it's very dangerous to hop onto momentum

without proper conviction and education

and diversity in what you're getting

into and to where

if you're getting in on green and you're

selling out on red

is it potentially because we haven't

considered

proper education or proper diversity and

algorithms like youtube algorithms don't

help with that

the more algorithms focus on

enhancing positive hype style content

and the more algorithms focus on

silencing negative related content the

less

folks end up getting educated and the

less folks end up educated

the more retail investors as a whole

could end up getting

weaponized another risk to the movement

the fact that hedge funds can weaponize

our movement think about paul tudor

jones on cnbc the other day

the guy's like oh you know commodities

are really shorted

you know if if retail happened to get

involved commodities could double or

triple

it's like they're trying to bait the

movement that's not what the movement is

about

you've got to be educated and be aware

that the hedgies are trying to take

advantage of the movement and trojan

horse the movement and that

is a risk factor and so this is where

the bandwagon fallacy

is a huge risk factor for the momentum

movement

if people like here a former wall street

bets mod from 2019 to 2020

continues spreading fun like this quote

on any

given day 90 of people on wall street

bets lose money

well then the entire movement could

collapse

that's very bad we don't want the

movement to collapse because the

movement is good

the movement encourages people to invest

it encourages better pricing for retail

it encourages faster settlement

it com and encourages transparency and

community due diligence

but the risk factor is uneducated folks

who don't even know that they don't know

they're unconsciously incompetent

potentially becoming jaded leaving the

movement altogether

thus weakening the movement this is a

risk factor

but we do have another plus though

blockchain technology has

actually been massively benefited and by

the popularity

of momentum trading sometimes for

example when cryptocurrencies like

dogecoin

become memified like when elon musk

memifies or glorifies something like a

dogecoin or

a rocket coin you know elon musk says

something and they just launch

then what we get is actually more

transparency by default

now this is wonderful because we want

more attention

on blockchain because again blockchain

transparent by default

accessibility is the norm not the

exception

we start thinking about investing in

assets like we never have before like

with non-fungible tokens

and when the media gets involved because

bigger names like elon musk are getting

involved

not always to the benefit of the

movement but still getting involved what

we're actually doing is we're

popularizing the systems that

underlay the individual stocks

or currencies now to me momentum

investing is really like a big castle

that everybody can be a part of and can

contribute to

but keep in mind that every security you

invest in whether it's

doge or amc or gme is really just a

trojan horse for getting you into that

castle

so that you're part of the movement it

doesn't mean you have to always

ride or die with that individual

security i say that because i always

want you to remember that it's important

to diversify your portfolio and not yolo

everything on one of the horses the

movement can stay strong without the

individual horses

this is a really important separation

because the last thing we want

is everybody all in on one thing and

potentially

losing money which could lead to the

collapse of the movement

the movement itself is separate from the

individual securities

and as long as it gets you into more

investing diversified investing

better pricing for retail and the

encouragement of faster settlement

you're

you take a part in the community due

diligence and the transparency

then that's very good these gateway

trojan horses are very very very good

when it becomes a problem is when these

gateway investments

end up encouraging witch hunting the

vilification

of contra opinions and the bandwagon or

all-in fallacy or worse

gambling the get rich quick the sex

appeal the lambo

the thousand percent returns in the week

or worse

people taking the money they've set

aside for medical bills and health care

in their livelihood

and going into glorified options trading

without the proper education

which has in the past led to suicide

folks that

is bad but we surround this with another

good

consider how companies win why did hertz

not go completely to zero after going

through bankruptcy

part of the reason was because the judge

realized the massive amounts of retail

traders

who would have gotten burned by letting

the company go completely bankrupt

and so hertz wins the people investing

the retail traders investing in hertz

have won

the amc investors who are

helping accelerate the growth of amc's

stock price have allowed amc

to raise a lot of capital to help them

pay down their debt

and to help them advance into this new

world

the rise of gamestop stock has helped

gamestop

eliminate all of their debt and help

them prepare to transition to a future

of nfts

and potentially more in sight

entertainment to make gamestop

and anchor for malls like an anchor

store for malls

rather than being an actual anchor where

they hold down them all we want people

to come

anchor store is a good thing anchor is

bad let me clarify that

and the same could be true in the future

for example lordstown motors

if our lordstown motors is getting

shorted into oblivion

because short sellers are trying to do

good for rooting out fraud

then all short sellers are doing is

making it harder for companies like

lordstown motors

to raise capital to fund their

operations which could end up crushing

innovation in those companies

again you know short sellers might say

that the market should quickly

flush out inefficient businesses but us

as a movement see short selling as

fundamentally wrong

that instead if lordstown motors stock

price goes up and they're able to raise

capital

and they're able to provide an

innovative product to market because

they were able to

actually raise money on the market then

they should have the right to do that

and so this is another big win for the

momentum movement

and consider this business insider has

reported that as of june 9th

2021 short sellers have shrunk their

positions in heavily shorted stocks by

80

reuters reported that on may 26 2021

short sellers in gamestop are down 6.7

billion dollars

to date folks the movement is

very very powerful it does have risks

the witch hunt risk the bandwagon

fallacy risk

and the gambling risk are the biggest

ones to the movement that could derail

the movement which is bad

we don't want that because the movement

is doing so

much good even though wall street likes

to make fun of the movement

the movement does a lot of good now

here's some personal recommendations

and a bottom line my personal

recommendations when it comes to

any kind of momentum type stock is you

always want to remember there's

something known as peak media when

something hits peak media

it can often times go down afterwards

and remember that when prices go up

things become riskier when prices go

down things become

less risky these are not targeted at any

individual stock

you have to yourself identify when a

peak media event exists or when you

think that one exists

and you yourself have to evaluate what

your style of investing is

and this is where i would give you some

recommended options if you have no idea

why you're investing in certain

companies

you might want to ask yourself well

first of all what conviction level do i

have in companies

but then in addition to that you should

ask yourself why are you investing in

the first place what is your goal

if your goal is to buy and hold for

fundamental reasons

more power to you you should dime in

hand as long as the fundamentals remain

true to why you are investing in that

company

if you are a trader make your trades if

you're a day trader trade daily if

you're a swing trader

trade whenever you feel like it there's

no harm in doing that

if you have made life-changing amounts

of money in a momentum stock

you should never feel guilty for

changing your life and realizing at

least some of those life-changing

elements

if you have the money to pay off your

debts build a business and transform

your future

do it realize that game gain and set

aside money for taxes

if you lost massive amounts of money

share your story

help those around you we're a movement

of transparency

doing the same thing expecting different

results though would be the definition

of insanity so definitely fact

check what your investing style has been

like depending on how successful or not

you have been

personally my recommendation is you want

to be a part of the movement you want to

be a part of the movement which means

have some exposure

to the different trojan horses maybe

you've gone a few percent in amc a

little bit in

gme maybe you've got a little bit in

doge a little bit in

momentum kryptos that you're finding

that's a great way to support the

movement

but you don't need to be all in and

that's not to say sell what you have

it's to say always remember a portfolio

has a balance of everything

you want a balance of real estate you

want a balance of long stocks you want a

balance of long options

if you've got a lot of short options

short term options consider balancing

out with longer-term options

or even index funds to balance out some

of your risk now you just want to make

sure you're

properly seated at the right place in

the rocket ship so to speak you want to

make sure you're in the right place

where you're comfortable

with your risks and your exposure just

to make sure

that your ultimate long-term goal is

number one

supporting the movement number two

building your wealth

let's understand this every movement

goes through cycles

the momentum stock movement was very

very hot in january

and it was not in march and april this

is normal

we go through cycles in the momentum

movement the most

important thing is that the movement

stays

more positive than the small problems

that it has

so you remember this movement is all

about the average everyday dumb money

investor gaining transparency better

pricing community due diligence

feedback and the encouragement to invest

the movement is not the meme stock

itself

it's the trojan horse that gets you into

the movement but we've got to watch for

those risks

which are the acceleration of the

vilification of contra opinions or due

diligence that doesn't agree with the

rocket ship mentality

and this can be exacerbated by leveraged

short-term options and yellowing

so we've got to be careful with those

risks but with those risks aside

to the millions of new investors first

of all

welcome and make sure you're on the

right place in this movement

and then as long as we're all in the

right place more comfortable where we

are

together we can involve or evolve into a

more

well-balanced group of investors and

become an investing group

that's one where everyone wins the

movement then continues

with a focus on wealth and financial

equality for

all of us positivity and unity can help

us prevent

the small corruptions inside the

movement from destroying an incredible

and very powerful movement for good i

cannot

wait to see this movement evolve and if

you can't wait

make sure to subscribe to this channel

share this video if you found it helpful

and check out the amazing programs

linked down below on building your

wealth and use the coupon code link down

below as well

thanks so much

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