While I’m No Fan Of Fat Cat Hedge Fund Managers, I’m Also No Fan Of Poking A Stick In The Eye Of The U.S. Economy
There may be more real danger than people realize in the trading scheme that’s been dominating the stock market for the past little while…
Most stories I’ve seen are treating masses of highly coordinated day-traders sending GameStop and other stocks and options soaring, like a fun pastime during COVID-19, which somehow really took off and took on a life of its own. And continues to gain traction as it combines trolling with potentially huge profits for small investors.
I’m not ready to brace for economic collapse, but I think we should take it a bit more seriously than that. After all, the Dow Jones Industrial Average just had its biggest single day loss in months.
What’s happening, as simply as I can express it, is bunches of investors are finding each other online and teaming together to buy up stock and options in companies that are the biggest targets of short-sellers. Doesn’t sound bad, and mostly it maybe isn’t. And I’ll explain what short-selling is in a sec.
Because those stocks are usually cheap, and not that widely traded, their prices are soaring due to lack of supply created…
