Now that I’ve had some time to reflect on the events that are, for all practical purposes still unfolding. I figured I would address them more directly. The topic is certainly a complicated and multifaceted one
First, I see very few people in the right here. Yeah, it’s easy to pick on the big guy at the top. Easy to look at a few hedge funds and call them the enemy. A sort of symbolic stand-in for American capitalism. As someone displeased with the current corporate culture, I can certain empathize with their desire to strike the system however they could.
In many ways, I feel that the overconfidence and complacency of the professional traders set these events in motion. I mean, shorting more shares than actually existed? I reminds me of the same reckless abandon that led to the financial problems in 2008. In that case, the risky assets were creative mortgages presumed to be made safe because they were bundled together with a lot of other mortgages.
Given the far-reaching consequences of that particular disaster, the actions of the group exploiting the mistake seems… shortsighted. Of course, they have done a magnificent job of highlighting how little the professional investors have learned.
All this aside, I cannot but feel that the Robinhood brokerage has made itself public enemy number one as well. For a platform that claims to be all about bringing trading “for everyone,” they seem to have gone well out of their way to shut down the… financial protestors. Other brokerages took actions to restrict the trading of GameStop and other stocks as well, but none quite as severe as Robinhood, who went so far as to alter the rules for cryptocurrency as well.
Though the actions of the protestors are questionable, they are (probably) not illegal and they had a right to make really bad investment decisions for reasons that were allegedly not about profit.
Ultimately I feel that nearly everyone was in the wrong. The motivation of the protestors was commendable but ill-advised. The rhetoric was absolutely deplorable, and smelled more of vengeance and hatred than justice. The professional investors have learned nothing in the last decade and displayed a need for additional regulation. Several investment platforms have shown their true colors, when the chips were down.
I think I still need more time to absorb all these things. I try my best to judge slowly, if a bit harshly in this case. None quite as harsh as Robinhood, though. I’ve been using their app infrequently since early 2019. Unfortunately I feel rather strongly about some of their actions in the last week. They haven’t really impacted me personally. I happened to own one of the stocks of interest, though not one of the ones that’s getting any attention. I sold my shares of GameStop back in March because I was dissatisfied with some of their business decisions. It bothers me enough that I intend to sell all the assets I have on their platform and move my money somewhere else.
Y’all take care, and watch yourselves out there. The stock market is rather unforgiving to the impatient.