Confessions of a recovery stock trader

MILAN – There was a few moments of silence when I told my girlfriend what I had done. I had kept the information from him for a few days, fearing his reaction and forced to explain: I had thrown a few hundred dollars in shares of the extraordinary GameStop “action meme” on the New York Stock Exchange. Then, still dissatisfied, I came to own shares in AMC, BlackBerry, Plug Power. I had never even heard of these companies before seeing them, well, trend on the Internet. And with just a few clicks, the same internet made it easy for me to invest my hard earned money in these stocks.

As soon as I confessed, his lips arched into an uncertain smile – a smile that seemed to hide several emotions: confusion, disbelief, anger, compassion. “What are you doing?” was the rhetorical (and other) question.

It’s true that I’m not the kind of person you would consider a stock or cryptocurrency trader – at least not the way they’ve been portrayed in the media: geek guys in their early twenties. , sometimes fresh out of an American college, who sees the stock market as a giant casino to which he now has access with (or without) his savings to try to win big. Instead, I’m a 29-year-old Italian freelance journalist who never really cared about money or computers.

They are inherently risky because they run on the hype

And yet I was there, having enthusiastically thrown $ 2,000 into obscure actions, hiding the information from those around me and struggling to figure out how things had come to be.

My memes stock journey was about to teach me a lesson or three – about finance, the world, and myself.

Meme stocks are like any other stock, except that they aren’t traded because of their companies’ prowess, but because – for one reason or another – they are all the rage on social media. The term became popular when shares of GameStop, a languid video game retailer, rose 1,700% in one month last January and February for no particular business reason: GameStop went viral on a Reddit forum called Wall Street Bets. Even stocks are inherently risky because you buy and sell things whose value has nothing to do with objective criteria like trading metrics – they run on the hype. For this reason, trades tend to generate dramatic gains or heartbreaking losses; There is no middle ground.

I started buying stocks even almost by accident. When the pandemic broke out in northern Italy, where I live and work, I was hired to report for a handful of US publications, which paid me in dollars. But with the dollar’s value falling, I decided not to exchange it for euros, which made money a strange beast: an amount I owned but couldn’t use. So, I wondered if I could make a few extra bucks by investing online.

I had seen some of my peers and my twin brother earn a few hundred, sometimes thousands of dollars quickly as the stock market began to explode after the first wave of COVID passed. It was also fueled by the ease with which an individual can invest in the stock market today, thanks to the explosion of personal finance apps like Robinhood, which announced last week that it hopes to raise $ 100 million in becoming public.

Robinhood not being available outside of the US, I had to turn to another app: Revolut, the app I was already using for my daily digital spending. I found that it allows users to stock up on anything from stocks to cryptocurrency to gold with just a tap on the screen and with minimal fees. I didn’t double my money, but my first trades saved me a few extra bucks. At the end of 2020, I started looking for new stocks to buy.

My brother once laughed when he told me about people from the “Wall Street Bets” group on the social network Reddit who were making ridiculous amounts of money from GameStop shares. Some have posted their winnings online and a few have hit six figures. Logic sounded sane, money seemed easy: around 140% of GameStop’s shares were sold short at the time: many people had bet on their price going down, borrowing and selling shares, hoping they could buy them back for the sake of it. cheaper later. More people had to buy back GameStop shares than there were: by the law of supply and demand, it seemed like a time bomb – in a good way.

With the price still relatively low, I bought myself a few stocks through Revolut and then hit the sell button when the price suddenly skyrocketed. It went well: like that, in a few minutes, I made as much money as I would earn in four days of journalistic research. And so, right after I sold, I looked again for where to put my money next: AMC, BlackBerry, Plug Power.

Trading memes stocks, as long as you don’t go bankrupt, it’s fun. This is in part due to the online community of Wall Street Bets, with its peculiar culture and jargon. Almost everything is expressed through memes, and Reddit’s algorithms will push the funniest ones onto your screen. People go out of their way to laugh at conventional financial wisdom and YOLO their savings on ridiculous trades. They laugh at each other like “monkeys” for silly bets and brag when they win big that they would buy gifts for their “wife boyfriend”. One guy posted that he was “financially bankrupt” after investing his savings in ornamental gourds, hoping to take advantage of a new trend. Stuck with a shipment of “gargantuan” gourds from Argentina, he claimed to have looked for ways to turn them into musical instruments.

There is a quintessentially millennial element to the store of memes.

But there was another more serious side to Wall Street Bets that emerged with sagas like GameStop, which resonated with my still-alive sense of injustice. Around the time that GameStop’s shares skyrocketed, users began to write articles about how the 2007-08 crash destroyed their lives; how their parents lost their jobs; how they had to sell their homes; how they had felt suicidal. Some were gambling their retirement funds on GameStop. Others fanned the flames, noting how the hedge fund bosses they were trying to beat by inflating the value of GameStop stocks had screens in their offices linked to CCTV on their collections of high-end cars and yachts.

I’ve come to see this as the quintessentially millennial element of memes stocks. People have come to them for a variety of reasons, but the memes stocks seemed to me to grapple with the deep-rooted and disillusioned nihilism that masks the anger of young people at the hand they’ve been taken in the global economy. Hope is not something many of us – the children of the global financial crisis, of globalization, of the pandemic – see in the economy or in our careers. Wages in most industries have stalled for years. Inequality is increasing throughout the West.

One night, shortly after making my trade on GameStop, I had a dream. I had found myself in a dark, massive empty room where I couldn’t see any of its walls or boundaries. In front of me stood a graph and a handful of red and green lights, showing how my money was going up or down. Suddenly the map started to crater. It faded quickly, inexorably as I searched for my breath and my time, paralyzed as to what to do next. Quickly it went down to 0 – all my money was gone. I woke up drenched in sweat.

I was starting to realize how gambling affected my sanity: Dreaming was one of the ways my mind was trying to get back on the wave of anxiety, excitement and fear that the stores of memes were generating. . . There were other signs: my devouring of financial news, my brooding mood when a deal was causing me to lose money, my forums looking for ideas, and my constant discussions about it with others.

It was then that I decided to retire and take out memes stocks. I had a losing position on AMC for a few months when the stock shot up again in June. I closed it as soon as it broke me – later I found out that I had unwittingly foregone big gains by doing so.

By trading stocks I have learned about myself and other young people, and from experience I am happy to have lived it

I am still recovering and still have a few dollars invested in stocks and funds. But I accepted what drew me to memes – the injustice, the community – and all the ways it hurt me: anxiety, constant distraction, a productivity slump in my real profession.

Over time, I also tried to think of the less obvious opposite side: Did trading memes get me anything? Of course, I had learned a few lessons about basic finance and impulsiveness. I have learned about myself and other young people, and from experience I am happy to have lived it.

The other obvious thing that memes actions have left me with is money. I made a few hundred dollars at the push of a button with GameStop and AMC, and I’m glad I quit stocks even with a few wins.

If you don’t count BlackBerry, that is. I bought this one on the right foot, it dropped soon after, and I still own a few stocks. I’m down 40%.

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