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Robinhood :'( Buy me a River

Okay guys. So, yeah, today's a very weird day because, actually we saw a private company, that is in the financial sector doing something insane. Removing the buy button on their website on specific stocks. And of course you can say, this is a technology company, Robinhood, so they can do whatever they want, but those are financially regulated companies. So this thing, like, to me, sounds like the definition of market manipulation. Usually it costs you money to manipulate the market in that big time. But in this case, it just took a developer, a few clicks to actually disable buying stocks. And that's very weird. It's very normal sometimes to disable trading of stocks. In some other times it's normal and legal to disable shorting stocks to be exact, if there's a massive sell off, but this time like disabling buying, you don't do that

like, it's so weird. And prices indeed fell, which is something you would expect. So people can't buy. What can prices really do? And many people, depended on this application for buying stuff so effectively, they took a market, a part of the market out, which is very weird. You can say that this was done in order to protect people. But do you have any evidence that those people needed protection? So we have accredited investor requirement for asset classes that we think that people should be protected from either because of too much volatility or for other reasons they don't understand. But those aren't these types of stocks. They're just common stocks. And the whole idea that people should be protecting protected from themselves and their bad decision. That's a very dangerous way to go because, like, if I was buying through another broker, I shouldn't need to be protected.

What makes you think that all those people are naive? What makes you think that it's not their disposable income that they really don't care about? Like, why do you think they will blame you for their financial decisions? Why do you think they are not conscious? And who are you to decide that at the end of the day? And what else can you decide if you can decide that, what else can you decide can you decide what stock will go up and down? Is this what we are talking about? Now you have to understand that the short squeeze is really painful and that's every professional knows that short positions are kind of truly bad and dangerous because actually they have what is called limited upside and then they have infinite downside. So professionals know that, and those are the hedge funds in this case. At the very least to be responsible.

And that's a signal that this market sends now to people that, you know, you shouldn't short the obvious short excessively because the market should not reward an obvious short. It's too easy money, and you should get a break to the company and leave it time and space to recover. That's, that's the signal that they should be getting right now. And you might say like, people will get hurt out of their behavior. It's true. But they will have fun. Maybe they don't believe that all this stock market thing is about their survival anymore. They just get it as a game, like a casino play. So they went to have some entertainment. Yeah. Why not? This sounds reasonable. But at the end of the day, you can make a connection here. So you see people being, with COVID at home, wanting to basically have fun with things like chats on various websites.

And, because they cannot do many other things right now. They, they react somehow not very rationally and they do stuff. And then you have big tech platforms and they try to regulate that by censorship again. So the, they call it retail investor, okay, or the Robin Hood guy. So this guy is being censored right now, and his opinion on the market. Because a tech company is scared that it's going to piss-off other people that know exactly how the world should be. But maybe, maybe things will never go back to normal, never again. And right now economists don't believe that the efficient market hypothesis holds true. Right? So what exactly are you protecting? Those guys are creating a little bubble or whatever. So you might say like the fundamentals do not support this price and who's fundamentals support, their price right now?

So yeah, this is the bigger connection COVID causing people to do irrational stuff, to have fun, and then big tech in the fear of regulation or lawsuits or whatever, doing stupid censorship, to prevent people from acting in a way that changes the old way, the way that things are supposed to be. Which is represented by traditional market players or whatever you call it or politicians, you know. But maybe the new world is all about forums and random traders and like, people doing stuff and this type of activism and yeah, maybe that's the new normal guys. You have to adapt without, maybe you will not make so much money as you used to make, especially free money by shorting a company that is obviously in pain. This might be the new normal. Yeah. Maybe this will not go away. So those were my thoughts about today. Certainly a big day. And, uh, yeah, I want to hear your thoughts. Thanks for watching. And see you soon.

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