Main Street Revolution or Gamification of a Dangerous Game?
In this week’s Strategy webinar, Carlos and I hosted a one-hour town hall meeting with Andy Kershner, CEO of Kershner Trading Group.
With hundreds of traders, and offices in NYC and Austin, they are one of the most successful proprietary trading firms in the US. Our last question to him concerned the advice he would give to new and developing traders. His response? He said to use STOPs, to use STOPs, and to use STOPs. It’s incredibly wise advice. This week, we saw the brutal sell-off of marijuana stocks such as SNDL, TLRY and APHA. I know there are many traders who are trapped in these big sell-offs and are perhaps still waiting to make a comeback. This is the game of Wall Street.
As you all know, not too long ago a revolution was launched when Main Street retail traders in WallStreetBets went to war with hedge funds and short squeezed GME and AMC. The battle was lost though when a few clearing firms such as Robinhood did not let traders open a new position and the stocks then sold off.
Dr. Michael J. Burry, who was the first person to short the housing market and warn about the financial crisis, tweeted this week:
The #mainstreetrevolution is a myth. Zero commissions and gamified apps were designed to feed flows to the two most influential WS trading houses. A few HFs got hurt, but if retail is moving toward more trading and away from fundamentals, WS owns that game. #Stonks by design.
He tweeted images taken from Robinhood apps and noted that these gaming style apps are a dangerous vehicle to destroy the wealth of people who do not know what they have.
Like it or not, Wall Street is good at their game, and retail traders will get destroyed if they do not equip themselves with the best technology, strategy and psychology required for this game. Do not hold the line for anyone, as this is not a game to prove anything to anyone. It is a serious, dangerous activity that destroys both lives and wealth.
At Bear Bull Traders, we focus on these three specific elements of trading: Technology, Strategy and Psychology. These three are like the legs of a stool: remove one and your system will collapse. As well, and of much importance, what binds these three elements together is mentorship and community support. If you are the best trader in the world, but trading on an app that is more like a video game (as per Dr. Burry), you are destined to lose. If you have the best tools and strategy, but have the mindset of a gambler, then you are also destined to lose. You truly need it all in order to become a consistently profitable trader.
Two images from the gaming style Robinhood app that Dr. Burry shared screenshots of are duplicated below. You will see that one reads, regarding TSLA: “I think it’s going down.” If your money’s at stake, you better know from your careful analysis that it’s going down (or up)! And then they also offer traders the capability to trade complex instruments such as options! Dr. Burry tweeted:
If you do not use Robinhood, you have to see it to understand what gamification of #stonks/options means. So here it is. If this looks like a serious investing app to you, and NOT a dangerous casino “fun for all ages”, you’ve been #gamified.
Moving to a much more pleasant subject, we have launched an informative 24/7 Bear Bull Traders Lounge in Discord that is being led by Aiman. Please join our new Discord Channel (free to everyone, including non-members) and please feel free to share this link with other traders you know and invite them to join with us in the lounge.
In our lounge, both BBT members and non-members can share ideas and trading tips. See you there!
Last but not least, please note that the market is closed on Monday, February 15, in observance of George Washington’s birthday (the Presidents’ Day federal holiday). George Washington, a founding father of the United States, is certainly one of my favorite and most respected historical individuals. His vision for democracy and separation of powers in the newly found republic has been an inspiration for so very many.
To your success,
PS: Please check out my newest book, Stock Market Explained, where Ardi and I review the basics of investing and trading in our modern stock market. A link can be found here: https://amzn.to/3ndAJkL As always, I appreciate your honest reviews and feedback.
PS 2: We are offering 40% off of our Elite – Annual membership for Valentine’s Day. Use discount code LOVE40 at checkout, or simply click here to be brought to checkout.