This is a long read but 100% worth it and necessary for today’s investing climate.
People become sports fans mainly to support the home team. Whether the team is good or bad they watch, go to games, buy memorabilia. And the majority of times they stick with one team their entire lives through ups and downs.
Investing is not like that at all whatsoever. This message is mainly for the newer younger investors, those that started during the meme stock craze. What I’ve been seeing is people treating stock investing the same way they treat sports teams. They pick a stock, stick with it no matter what, join echo chambers that promote the stock and then reconfigure their reality to see the stock in a positive light no matter what. I can’t even begin to explain how dangerous that is in the markets. It’s like that’s their team and damn anyone who will convince them otherwise.
Things change with time. New information arises that can contradict what was once true. This is especially true in the markets. What was once a sure fire trade might no longer be in a few months. Pay attention to macro world wide events for clues of changing trends. For example Zoom: an obscure video conference service that no one heard of until the pandemic when it was propelled into the forefront of every household and became its own noun. But now it’s cratering hard because the pandemic is ending and less people are using it. Zoom doesn’t have its own stock specific subreddit (or does it ? Im not sure) but if it did you would be hearing about crime and hedgies creating synthetic shares to crash the stock on purpose and how a short squeeze is imminent…. Any day now. When in reality large scale macro events are causing the stock to crash.
Stay the fuck away from every single stock specific subreddit. They are ALL toxic, riddled with lies/misinformation/half truths/gas lighting/misdirection. They take information and exaggerate it if it’s positive and minimize it or just outright ignore it if it’s negative. This is not the place or mindset you want to be getting your data from. You want people who are going to tell you the truth, bad or good, no matter what it is. This allows you the investor to make choices on your own. These echo chamber hive minds are relying on the mob for information. You constantly see people saying things like: “tell me what to think of this” “I’m not sure what this means can you explain for a sm00th brain.” Imagine relying on random people you’ve never met to make personal decisions on how to invest your hard earned money. It absurd and just dangerous. But the worst part is how any dissenting opinion is absolutely smothered by the moderators and the mob. I’m seeing desperate people who need cash to pay for serious life altering things such as car repairs, medical appointments, their dogs treatment who are being ridiculed, attacked, insulted by the mob for wanting to sell their shares to pay for those things. Being called a sell out, a shill. The one of the dog was extra painful to watch as some dude let his dog die instead of selling his shares to pay for its medical treatment. And then the mob came and applauded him for “staying the course” don’t believe me? It’s there in that one stock specific subreddit that rhymes with duperbonk.
Some of the most basic principles of investing have gone out of the window. For example never put all your eggs in one basket. Don’t invest money you can’t afford to lose. Don’t take out loans on your 401k, max out your credit cards with cash advances, sell your only car (yes these things are actually happening in meme stock subreddits). This behavior is so irrational, so toxic. Everyday I am flabbergasted by what I am seeing and when I think it can’t get worse it does.
TLDR stock trading is not a group activity. Stock specific subreddits are extremely toxic and destructive to developing proper investing skills. Stay the fuck away from them.
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