Leave your psn down below I will friend you

This text was originally posted in Mauerstrassenwetten by u/knutolee. I thought his message was so powerful that I asked him for permission to translate, post (can share chat with Mod if required or check directly with him) and fuck his wife (ok didn’t ask for permission) after and he agreed to all most of this wholeheartedly – like a true Autist. I am trying to catch the message – so don’t expect a word by word translation as you can never catch the greatness of the text in it’s entirety and I got to translate it in a way that even a US degenerate can follow it.
As usual no financial advice, I more or less just copied the text because I liked the text and I like the share. In general I have likely lost more than I won and the stock market is a mystery in itself to me. So make your own due dilligence and don’t trust financial advice of others (the argument for that you can read to a certain extent below).
Autists, Degenerates, Idiocracy of the World – let me get this straight!
In the coming days I don’t wanna see all this whining and bitching on this sub and espescially in the daily GME threads anymore. On every fucking corner of this sub I smell doubt, you read messages the likes of „this is over“, „we missed the squeeze“, „I am going to loose it all“, „entered at 320$ - I am doomed“. What the fuck is wrong with you retards, did you fucking wanker your wifes boyfriend dick all night and lost your mind over the effort to do so? I think I got to get this accross the Buddy Stephens way to get you down to fucking earth and get your attitude right.
1) You come to a sub called wallstreetbets and yolo your hard earned money in $GME
You realize what you are doing here - you true fuck - dont you? This is a community of full blown first class true tits up degenerates which take pleasure in posting losses accumulating into the millions every fucking month and you are putting your money into a BET – yes my dear it is written out in the name of this very fucking sub Wallstreet-B-E-T-S!!! – and follow DD posted by people with names like „SHOW_ME_YOUR_ANAL_TITS“? You realize this is not a fucking Disney ferry „One-Wish-comes-true“ show and we see all day long gain porn and loss porn is something which doesn’t exist in this world? This is a band of true autists which occupied an absolute niche when it comes down to trading (and we even don’t trade stocks normally!). This is the place where one wants to enjoy the sado-masochistic part of the retarded capitalistic system we are living in. Yes we have some (maybe a lot) DD diamonds in this sub which by the way are now impossible to find because you degenerate fucks spam the entire system to the moon but no sane long-term investor would consider to invest into any of these investments – this is about „get rich or die trying!“. This is not investing!
2) Yeah but I saw Reddit in the news and all that stuff about GME and it was going through the roof becasue there is going to be short squeeze and on top of it the hedge funds fucked up, hihihi
If this entire thing was a safe bet why exactly would not the fucking entire world jump on this train? (and even you might get this image from all this „Saudi Arabia calling, China calling, Africa calling posts – but please they invest into BABA, Aramco or I don’t know what’s the hot shit in Lagos stock exchange right now – could be though the next big thing – got to see if I can find a DD on this). So why is this not happening? Because it is a fucking BET – the stock market is a fucking Casino and the major difference between investing and us is that they are always just bet on black or red, while we always go for the magical zero. It is totally unclear whether all of us going to show up at Miami Beach with our Porsche Cayenne or Tesla Model S and hit on the girls (or boys) on the beach! The reasons are layed out to you every fucking day with yet another quality DD that most of us simply dont understand! And yes our chances to already sit on the fucking moon slurping our Pinha Coladas would be certainly higher if everything was going the way we believe the system should be working but even the last person who joined this sub by now should realize – you are potentially fucking with the system itself (by the way something this sub never intentionally wanted and you shouldn’t do if you like the system).
3) Hey but when is the squeeze of the squoze going to happen? 😓
So there is this story going through the media and from Florida to Colorado everybody remotely degenerate is yoloing money into GME. It’s a fucking global movement now (or not – could be also the same 50.000 degenerates cheering up themselves the entire time which would much better fit this place) and according to the DD we just need to have 🙌💎and the shorts a bleeding their panties, their balls feel squozen (and not in a good way) and they are completely in defensive mode. What do you think what people who are responsible for Multi-billion $$$ HF are going to do? How do you think you become a person who is responsible for such an operation? Do you think these guys have served as altar boys or girls in church (no offense if so)? What is wrong with you? Seriously! Do you think if they get some headwind they are going to say: Oh boy – we got defeated and going to realize a multi-fucking-billion-to-the-moon loss? OF COURSE FUCKING NOT! THEY WILL GET EVERY FUCKING BAZOOKA, TANK, ROCKET or INTER-STELLAR DEFENSE SYSTEM IN PLACE TO BRING THIS TO AN END! Influence the market participants (speculation), Short-Laddar attacks (I to this very day haven’t understand the concept or how this works – speculation), demotivational tactics (speculation) and to whomever picks it up – desinformation (well not quite speculation but it could also be that media is just retarded as fuck to get the most simple facts straight). So what would you do with a potential group of 5mn small-size investors – shall we do a collective effort to think about it? Ah fuck it! It is to fucking obvious – you would dry this out through time, divide their interests and drive away their attention. Because let’s be fucking honest – most of you entered this thinking you would hold this wonderful stock for a couple of days (and to be honest in this respect the community how it existed 10 days ago was much more true to itself - no whining just sayin)! Gotcha! Who can tell me who fucked each other two weeks ago in People magazin or on Twitter? Nobody – I even don’t remember shit about this very forum before GME (ok I remember u/variation-separate but that is another story). And all their tactics are completely understandable because there is a fucking huge amount of tendies to be made and they are not that different from us (my fear).
4) That does not give you the fucking right to whine and bitch all the time in the daily threads (and it is not happening already its going to be) and fucking ruin the party
Deal with it – we just got to wait how this thing plays out. That’s it. If we are right – this will play out positively in one or another way (huge tendies or SEC investigating). Let them continue shorting the stock or whatever. If you believe you want to buy more stock – do your DD and do it. When this got picked up a long time ago by people they thought – hmmmm makes sense – I am going to get me one of these tickets to the moon. There was if at all a very little interest to squoze the balls of any HF and it was certainly not the main motivation of this sub. I said it above: Get rich or die tryin! Since last Thursday the whole thing became political and it looks like rules were changed in our disfavour and yeah we can not go back in time but we got to deal with it and the circumstances. [Left out this part as it promotes holding and buying which I don’t want to in the sense that everybody needs to make his own fucking decision but I am going to fucking hold] but WE NEED TO REGAIN OUR POSITIVE SPIRIT which was an essential part of this sub and GME for most part in January (and of course in general before) – no matter how fucked up things looked (individually as there is not such a thing as collective alignment to buy options or stocks on this forum). We will see how the numbers are play out and who provided the adequate picture. In our reality GME is going to the moon and the 🚀 is fueled. Period. We are just prevented from starting because of the windy conditions out there.
So please – no post without 🙌💎🙌💎🙌💎🚀🚀🚀 and if you want to fukn leave the party – leave – but let us continue this party, because we are going to the fkn moon. This is the way and I fkn love GME and if this means I need to hold onto this beauty for another 25 years I am going to do it.
P.S.: One thing dear to my heart - in the past there has been huge donations made by this community to people living with autism. As we use their names every fkn day I would really like to see some of your degenerates not to forget about this cause because we owe them and as much as I like the billboards I’d rather see every $$$ go into charities rather then telling the world about us – I think everybody out there knows by now that we exist and that we have 🙌💎
Edit: Nobody asked for it but 35@231,69 and thanks for the awards which should go to u/knutolee - so you can simply award his original post referenced. More importantly he expressed to me that he is very happy with the translation which is almost as important as the message itself.
Edit 2: Please pay attention to AMA Marc Cuban - https://www.reddit.com/wallstreetbets/comments/lawubt/hey_everyone_its_mark_cuban_jumping_on_to_do_an/ - there is I think some quite enlighting answers in a very easy to understand language.
Edit 3: Bought 5@103
Edit 4: Heading for dinner. Crazy times. Will check later and decide whether to buy more tickets or not. But maybe good advice for some others to make a break. Chillax :)
Edit 5: Read that RH has opened up GME again. For whatever it's worth 🚀
Edit 6: Thanks again for all the Awards and stuff. I can only reload in the morning. Was fun and maybe I am going to translate more in the future - if mods would consider to give me a copy cat 😺 flair it would be the icing on the cake.
Edit 7: Obligatory salute to the one and only DFV and his 💎 balls. This guy will go all the way to the 🚀 with us.

Mods: does DD tag apply? If not change it.
I wrote this in response to someone elsewhere who asked simply:

So they're betting against the company? Like, they have no faith in them? Investing like this makes one feel horrible.

Yeah. There are three ways you can short.
1) You buy an option with a predetermined end date with the RIGHT to sell a stock at a certain price (depending on how much you want to pay determines the price.) If a stock is $10 and you expect it to drop to $5 in 6 months, you might buy a $9, 10 month expiry "put" (right to sell at price) option. This might cost you 50c per share.
IF you're even slightly right, ie it drops to any price lower than $8.49 before expiry you made 1c per share. You can also change your mind and sell the option (either more (profit) or less (loss) than 50c/share).
IF you're properly right, and it does drop to exactly $5 you make $3.5 per share. If it rises, or drops to any number above $8.50, you lose the price of the option (50c/share).
2) You're a big player. You call your buddies at Pension Fund X42 and say "Hey can I borrow those shares you have for x% interest and return them to you later?" A set timeframe may be set. I don't know for sure, but probably. Anyhow, Pension Fund X42 says "ok" because they aren't looking to sell them, so might as well make some interest on lending them.
So you borrow them, and immediately sell them. You pay your daily interest to the pension fund, and you wait. When the price drops, and you decide that you've made enough, you buy them back and return them. You keep the difference in prices whatever that may be, minus the interest.
If you're wrong... You're still obliged to return the shares to Pension Fund X42. So at some point you have to decide to eat a loss and buy the shares back.
3) You're a big player and you are ok with a bit of lawbreaking, you Naked Short Sell. This is great because it's cheaper! No interest payments!
Here, you simply sell shares you don't have, and buy the imaginary shares you just created back later so that the number of shares on issue doesn't get too far out of whack and you don't get investigated. Any gap between your sell price and buy price is profit or loss depending on which way it goes.
What's happened right now is mostly a combination of 2 and 3. I'm sure there is a bit of 1, but 1 only causes predictable losses (Like the cost of playing a hand at a casino. You only lose the amount you bet if the cards don't go your way.)
So the risk with 2 and 3 is that because you're obliged to buy back the shares at some point, if they go up, when you have to quit, you have to pay the current market price and your actions can make the price go up even more.
Now you're in a short squeeze. You are obliged to buy but the price keeps going up every time you do. It's entirely possible that others see the price going up and buy, so you're now competing to buy a limited number of shares with everyone else. So the price goes higher. Your losses are potentially infinite.
What's slightly different between this particular short squeeze and all the others is:
1) The dumb fucks naked short sold AT LEAST 40% more shares than ever existed. They're obliged to buy back more shares than is possible. The only way out of that self-made trap is a complicated mess of desperately buying, returning, rebuying from the people you borrowed them from, and returning them with losses at every step. Imagine if I sold you 10 cars, but only delivered 6. You're standing there with your wtf face and I say "Hey! how much would you sell those 4 cars for?" You can name your price at this point. I pay it. Then I "finish" my "10 car delivery."
2) Retail traders are acting as one single semi-coordinated hive, loosely behaving similarly to what would in prior short squeezes, be a competitor hedge fund. They own a lot of the shares the hedge funds (HFs) NEED to buy - but they're not selling. They're actively cheering for the HFs bankruptcy while watching the price of the stock they hold skyrocket. Only other HF billionaires are allowed to do that and get away with it.
.
2a) HFs can be negotiated with. If you're really, really getting bent over and fucked, and you grovel enough, you can usually cut a deal where they stop trying to fuck you. If they won't talk to you, they'll often talk to your bank/brokesome other bigger player that can convince them that your bankruptcy will also cause significant losses or bankruptcy of another party they're not trying to fuck and they might like to have as friends one day. "You quit this, and we'll owe you one." It's always good to have favours to call.
.
2b) The self proclaimed retards on WSB can't be negotiated with. They don't need favours. They don't care if you go bankrupt or there's collateral damage. They don't give a fuck about any of them. For the most part they only hold a few hundred shares each max - and also for the most part, they're playing with their own money that they can actually afford to lose even if it hurts for a year or two.
How do you negotiate with, or swat a million wasps stinging you? You can't.
Edit.
Thanks for all the awards guys! I'll soon have enough to make a Tiara and become your Яetard Prince for the day! I was actually expecting posts telling my how wrong I am. I only think I know what the fuck is going on most of the time and usually figure out later that it wasn't.
I'd like to thank the academy, and my parents who never believed in me, and Scruffy, my first dog, who, like WSB, played chicken with truck, and, and, and...
Also.
I figure since this is so popular, I might as well nominate my suggestion for the inevitable u/deepfuckingvalue movie. It's fairly likely to be seen as a sequel to the Wolf of Wall St, so.... "The Fox/Foxes of Main Street" ? Yeah, nah?
Edit 2 NOTE
To all the people trying to PM me for advice: I have no fucking idea what WILL happen next. I just think I cobbled together enough of what HAS happened to explain it somewhat.
Ie: I'm more like a journalist. Would you ask a journalist for stock advice? (please don't answer yes...)

Okay, I know that the title sounds horrible, but hear me out.
About a week ago, a group of friends and I took a trip to Vegas. (And for the record, we all got COVID tested before we went out. I'm looking for a judgement on this specific thing, not on me taking a vacation.) The casinos have just opened up recently, and my friends and I have always enjoyed a little bit of gambling, so we decided to check one out.
I usually have a specific fund dedicated to gambling so I don't use up any of our savings, but most of that fund ended up being put towards rent during quarantine, since my GF got laid off of work.
Now, here's where I think I might be the asshole. It had been over a year since I had gambled last, and I really wanted to gamble. Any other gamblers out there reading this post will get it. I didn't want to take away from the house fund or from our grocery fund, so I decided that taking money from my kids' college funds would be the best option. One of them is 14 and the other is 11, so there was still plenty of time for me to get the money back before they actually go off to college.
And I ended up winning! I kept all of the money that I gambled, and I ended up making a profit of about a quarter of the fund. I called my GF and excitedly told her the news, but she asked where I had gotten the original money from. I told her, and she freaked. Out. She screamed at me, told me that she was going to tell the kids how immature I was, and hung up on me.
I know that it was a little bit irresponsible, but I don't really see the issue. If I had lost the money, it might be a different story, but I won, so I don't get why there's a problem. Now my kids have even more money to put into their college fund, and I got to gamble like I wanted to.
It's been three days since that conversation, and she hasn't responded to any of my calls. I'm getting really sick of reaching out to her when I don't think I did anything wrong, but my flight home is soon, and I don't want her to bitch about me not apologizing when I get home. But do I even have anything to apologize for?
So, reddit: AITA?
Edit: I don't think you guys get it. I only gambled about 30k, and now me and my family are all better off because of it. Don't you guys understand that I won? I accept my judgement, but I disagree.

How is it going my homies
I made this post on investing a few days ago explaining all of the QAnon fantasies and why the top could already be behind us. Some people listened, processed information and asked questions. Some called me a person working for Melvin and hedge funds.
It’s all in the past, but if you got burned on GME or other meme stocks, here are few things you should learn about the markets and trading these bubbles.

1. Set a price at which you will exit and take profit. Don’t look at what happens next, and never rebuy if the price continues growing. Likewise, set a stop loss at which you will exit no matter what.
   
2. Never, and I mean never put in more than you can afford to lose, or even lose sleep over. I have a pretty decent portfolio, and I only put in 0.5% of it in the play. I don’t give a shit about that money, but I still took profit and got a 250% ROI. Easiest cash I’ve ever made, easier than blowing a fat dude in the back alley behind a strip bar. Anyway.
   
3. If you hear about shit on the news. It’s probably not a good time to enter. There is a reason why some early people made money on the play. They understood mechanics of what was driving the increase in price. Many of them didn’t even expect a short squeeze, they just like the fundamentals. Likewise, if your 80 year old grannie (say hi to her from me) calls you and asks you about this magical company called GameStonk, sell that shit right away.
   
4. Always double and triple check information posted on forums and don’t take it for a truth even if it has a lot of upvotes. The amount of misinformation I saw on WSB over the past week with 100 thousand upvotes makes me want to vomit.
   
5. Stock trading is not a team activity. It’s not us vs them. It’s a fucking free for all, and people will drop their bags on you if they see their unrealized gain turn into an unrealized loss. You want to make money? Do your research, and be the first one on the train. Don’t jump on the train when it is speeding and going off the rails.
   
6. If you don’t understand how something works, learn about it. Again, the amount of conspiracy theories that I read about ladder attacks and this grand illuminati conspiracy is driving me nuts. Always use the Occam’s razor, meaning if there is a simple explanation to the situation, it is probably right. There is no need to build out this conspiracy theory for something you don’t understand, it does not help anyone.
   
7. You will get FOMO and you will get confirmation bias. Everybody does, but learning how to battle it is crucial. Look, my dad was a fucking casino gambler in his 30s playing blackjack and losing money, and I have the same traits. Does it mean I need to be the same? No, and I always remember my genes when trading. It is not an excuse to use when you lose money.
   
8. Realize that situations like this are extremely rare, and if you expect to make 300% gain in 3 days, I have some bad fucking news for you, markets don’t work like this.
   
9. Finance gets complicated real fast. Yes, on the surface it’s just buying and selling. I have been studying this shit for 5 years, and I still don’t know a lot of things. There are reasons why even some of the smartest people still lose money. Shit, Newton was burned on a South Sea bubble. Yes, that guy who discovered gravity lost money just any of us.
   
10. One bad trade does not define you. As long as you learn, and don’t repeat the same shit again, you are golden. There are plenty of ways to make money on the markets, be it value investing, selling options or setting up butterfly spreads.
    

TL;DR: Be smart, not dumb.

I know, everyone is tired of hearing about Gamestop, but this was something I came across that I thought was actually quite well written and pretty spot on with most of the anger driven rhetoric I've seen on Reddit.
I've copy/pasted because I know most of y'all don't have Bloomberg subscriptions.

Traders putting on the short squeeze aren’t motivated by greed. They’re engaged in an anger-driven uprising against the establishment.
Anger Is an Energy
The saga of GameStop Corp. continues. By the end of another frenetic day of trading Tuesday, the stock had just topped its high from Monday. Between those peaks, it staged a fall of more than 50% on Monday afternoon. Colleagues have followed these extraordinary developments as they happened. I will try for now simply to process the single most important question: Is this just a weird technical situation, of the kind that comes along every few years, that can otherwise be safely ignored? Or does it tell us something important about market conditions as a whole?
GameStop's share price surged back to set a new high Purely qualitatively, based on what I have witnessed, I think it does matter. The signal it sends is disquieting, if not surprising. It also introduces us to a new variant on an ancient market phenomenon.
The cliche is that market capitalism works on the balance between greed and fear. The standard defense is as follows: If the greed to make money by beating the competition is matched by a fear of failure through making too many mistakes or cutting corners, then capitalism works. Nothing else yet discovered gives people such an incentive to work and create growth. Speculative bubbles happen when greed becomes excessive, or when fear diminishes too much. Easy money and easier trading with derivatives oil these emotions and allow them to run riot. The financial crisis of 2008 happened in large part because years of policy had convinced investors that there would be a bailout if they failed; they lost their fear, and greed took over.
This feeds into the debate over whether we have a speculative bubble at present. Markets are pervaded by gloom and worry, so there is no lack of fear — even if confidence that interest rates will never rise is growing excessive. Meanwhile, there is little in the way of greed. Cryptocurrency has generated excitement, as has Tesla Inc., but in the main the frenzy over a historic opportunity to get rich, of the kind that was everywhere in 1999, is lacking. This is a different, worried world. The last two decades have stripped it of its positivity. The mood is nothing like the great bubbles of the past.
Instead of greed, this latest bout of speculation, and especially the extraordinary excitement at GameStop, has a different emotional driver: anger. The people investing today are driven by righteous anger, about generational injustice, about what they see as the corruption and unfairness of the way banks were bailed out in 2008 without having to pay legal penalties later, and about lacerating poverty and inequality. This makes it unlike any of the speculative rallies and crashes that have preceded it.
On Monday, I argued that it was misplaced to take pleasure at the pain for the short-sellers who had attacked GameStop stock, and then been subjected to a “short squeeze” for the ages by traders coordinating on Reddit. I received a bumper crop of feedback. Here are some representative samples (leaving out many with unprintable expletives):

“You kind of miss the point of what is going on with GameStop. How much did Melvin pay you to write this garbage? shill. Literally trying to protect an industry trying to fleece jobs from low income workers. Sleep well chump.”
“Watching entitled institutional shorts whine on TV and OP EDs that millennials equipped with margin accounts & zero fees are collaborating on Reddit to target them is my new favorite sport. Looks perfectly healthy from where I'm sitting, which is on bull side :) plus 1 for the little guys.”
“Normal isn't putting the retail trader down for being independent while organized hedge funds force you to take their way or suffer in fear. Normal is the American dream and being able to make your own way. This isn't a casino. This is a riot.”

One respondent warned that the people squeezing the shorts aren’t “a herd of impressionable youngsters with Robinhood accounts. No. They are an experienced & ruthless army of insomniacs followed by a silent legion of rapidly learning new traders. This is a new paradigm that won’t go away.”
Another told me I was a “dumb boomer” amid a screed of unprintable epithets. (Point of information: I’m just too young to be a boomer. I’m in Generation X, but it’s the intergenerational antagonism that’s noteworthy.) Another said that the short squeeze was just a way for millennials to recoup the money they had been forced to pay to bankers during the TARP rescue 12 years ago, and to put coronavirus relief checks to work:

“In other words, poor people have too much money and are now controlling the narrative. Damn those $1200 stimulus checks and $600 unemployment supplements. Too much liquidity, let's get these folks back to living paycheck to paycheck.”
“I know. Democratisation of the market is so damned inconvenient for those of us with money.”
“nobody cares about your hedge fund cronies!”
“Bloomberg defending the suits. Not surprised. They’re just mad the rubes are in on the joke now. Might this force the Fed’s hand? Too many regular people in on the game.”

This is all fascinating. In the space of 12 years, the role of the short-seller has turned on its head. Back in 2008, it was the shorts who upset the status quo, revealed what was rotten in the state of Wall Street, and brought down the big shots. They were even the heroes of a big movie. It was the Wall Streeters who attacked them.
Alienation has deepened since then. Short-selling hedge funds are now seen as part of a corrupt establishment, as is the media. The motives of anyone defending the shorts, or anyone wearing a suit, must be suspect. And there is a deep generational divide; those unable to own their own home and forced to rely on defined contribution pensions have a stunningly unfair deal compared to those a generation older, living in mortgage-free homes with guaranteed pensions. That percolates into anger, and a determination to right the scales by making money at the expense of corrupt short-sellers.
We lack precedents for an angry bubble, so predictions are even harder than usual. But there are enough similarities with past incidents to raise serious cause for concern.
First, the little guys have had their success so far with the aid of margin accounts, and by using derivatives. We know what happens when these things are used to excess; even the Dutch tulipmania relied on margin debt and derivatives. Little guys (and everyone else) deserve safer tools with which to build wealth.
Second, “democratization of finance” isn’t new, and in itself is nothing that anyone can object to. The problem is that investment and financial planning are difficult, and require time. Regulate these things, and you no longer have true democratization. Leave people free to take chances, and you get disasters like the bursting of the dot-com bubble in 2000. That also followed plenty of hype about the success of the “little guy,” and the first great explosion of online discount trading succeeded in sucking an army of new retail investors into the bubble’s final climax. Unregulated “democratization” led to the little guy bearing the brunt of the losses.
“Democratizing” finance also leaves newly enfranchised financial citizens prey to spivs and frauds. I started my career covering the disastrous repercussions of one of Margaret Thatcher’s last reforms in the U.K. — giving people the right to leave their defined-benefit pensions, offered by employers, and take on defined-contribution “personal pensions.” Unscrupulous salesmen persuaded miners, firefighters and police officers to abandon copper-bottomed index-linked pensions for plans that came burdened with excessive charges. It was a repellent spectacle, and the bill for compensation was in the billions.
These points doubtless make me appear to be a complacent shill for the financial industry, talking down to the rubes. For the record, I’m still angry about the way workers were ripped off in Britain more than three decades ago, and about the way the little guy ended up bearing the brunt for the financial implosions of 2000 and 2008. But it looks horribly to me as though the same thing is going to happen again — and I don’t think the answer to today’s many ills is to empower poor people to bankrupt themselves with margin accounts and derivatives.
Anger, even more than greed, has the capacity to make us throw caution to the winds. Many of us have a lot to be angry about. If this carries on, and spreads beyond targets like a video-game retailer, I don’t want to see the consequences when history’s first angry bubble bursts.

https://www.bloomberg.com/opinion/articles/2021-01-27/gamestop-short-squeeze-is-rage-against-the-financial-machine
Anyway, I'm sure everyone's tired of hearing about Gamestop, but hopefully this is a decent departure from the memes, hype, and completely unfounded bullshit that's been surrounding that conversation so far.

Never using Robinhood ever again.
LoNg story ShOrt - I was using Robinhood and ended up treating it like a casino [Options] with the recent mayhem going on for the past week.
My current investment portfolio is now $ 15,556.02 in Robinhood cash (No Margin), previously $35,694.34.
Do I feel sad? No.. and I don't know why.. there's lots of people would kill themselves over losing that amount of money and I'm grateful to have money backed up.
It's probably just the simple fact that I'm young and employed and I have a lot of time left in my life to recoup the $20k. I do have another $31,348.35 saved in cash so it's not like I put all of my savings in there(Thank god I didn't).
What will I do next? Change brokerage accounts. I've sold all my stocks and will be moving over to TD Ameritrade(unless you guys know a better brokerage)? I'll continue investing $200 a week on the same Wednesday I get paid from my job into QQQ like I have been on Robinhood and will lay off using Options for a very long time.. Maybe never again.
What will I be doing with my remaining 31k saved? Not sure yet. I have a full ride in College studying Business Administration and Finance(the irony) so I don't have to worry about tuition and books. I've always wanted to start my own business so I can imagine that happening someday, maybe soon. We'll see.

TLDR: GameStop’s Congress hearing is on Feb 18th, they need to investigate the Prime Brokers and DTCC for their complicity in enabling naked shorting within GME and by extension, potential collusion to shut down trading on Jan 28th, the day the short squeeze was going to kick off. (stick to the end for an analysis of some illegal tactics short side hedge funds have been using)
Thesis: On the day the retail market for GME shut down on 1/28 (the day the short squeeze would’ve happened had there been no market intervention), DTCC (clearing house monopoly) shut down retail buying in order to protect itself and Prime Brokers (which privately own the DTCC) from being exposed to the consequences of being party to illegal activity. I believe Prime Brokers and DTCC need to be called to the GameStop hearing on February 18th to be questioned for their complicity in enabling illegal naked shorting of the GME stock, as well as potential collusion to shut out retail buyers on 1/28.
In my previous post (which I recommend reading for some context) I explored the subject of rampant illegal naked shorting in GME, and how Prime Brokers (consisting of banks like Goldman, Morgan, etc) and DTCC would be complicit in the naked shorting. This in turn raises the thought experiment that they would be incentivized to do anything possible to prevent the short squeeze from happening on 1/28 because had the short squeeze happened, the shorts would go bankrupt and their Prime Brokers who lent them their naked shorted shares would need to cover the shares. This would not only represent a humongous capital expense for Prime Brokers, the culpability of Prime Brokers (and that of the DTCC) in this situation would also have likely been exposed as well.
A quick primer on what a Prime Broker is: Prime Brokers are essentially the service side of the short- selling business. They lend out securities and cash, you can think of them as the “house” in a casino: They provide a gambler with markers to play and to manage his winnings. According to Matt Taibi, “Under the original concept, if a hedge fund that wanted to short a stock they would first need to “locate” the stock with his Prime Broker but as time passed, Prime Brokers increasingly allowed their hedge-fund customers to use automated systems and “locate” the stock themselves, and what this does is enable short-sellers to sell stock without delivering and thereby perform naked shorts with counterfeit shares. (source: https://web.archive.org/web/20210213125246/https://www.rollingstone.com/feature/wall-streets-naked-swindle-194908/). (I highly recommend you read Matt Taibi’s article on naked shorting and how it was used to take down Bear Stearns and Lehman Brothers. There are so many parallels with GME it’s hard to miss. It’s amazing to consider that 12 years after this article was published and brought to public awareness, the problem of naked shorting still exists as a systemic issue.)
Prime Brokers have a long history of being associated with naked shorting. To highlight a few examples, Prime Brokers like Merill Lynch and Goldman have long been implicated for naked shorting Overstock.com (https://www.rollingstone.com/politics/politics-news/accidentally-released-and-incredibly-embarrassing-documents-show-how-goldman-et-al-engaged-in-naked-short-selling-244035/, https://www.forbes.com/2007/02/02/naked-short-suit-overstock-biz-cx_lm_0202naked.html?sh=271400d1763f). Another example is when Goldman’s Prime Brokerage was implicated by the SEC in 2016 and got away with a small fine of 16 million (Source: https://www.sec.gov/news/pressrelease/2016-9.html). An example that very recently came in the news is a story where CIBC, BOA, UBS and TD Bank Prime Brokerages are accused of facilitating naked short selling and using counterfeit stock to attack and bring the stock price of a company from $34.77 to $1.83 (Source: https://www.securitiesfinancetimes.com/securitieslendingnews/industryarticle.php?article_id=224548).
The DTCC also has a very long history of being associated with naked shorting. The Wall Street Journal noted that 1% of the DTCC’s volume end in failure to deliver which “have put DTCC in the middle of a long-running fight over whether unscrupulous investors are driving down hundreds of small companies' share prices… DTCC has turned a blind eye to the naked-shorting problem. ” (Source: https://www.wsj.com/articles/SB118359867562957720). The DTCC has also had numerous complaints submitted to the SEC for enabling naked shorting (source: https://www.sec.gov/rules/proposed/s72303/decosta122203.htm) and have been sued tens or hundreds of times for assisting naked shorts (source: https://smithonstocks.com/part-3-in-series-on-illegal-naked-shortings-role-in-stock-manipulation-prime-brokers-and-the-dtcc-have-a-troubling-monopoly-on-clearing-and-settling-stock-trades/ and http://counterfeitingstock.com/CS2.0/CounterfeitingStock.html and https://www.wsj.com/articles/SB118359867562957720)
On 1/28 Robinhood received a letter from the DTCC at 4 am requiring them to halt trading or come up with 3 billion dollars, which Robinhood did not have, and therefore with one swoop of the pen the DTCC shut down buy side momentum but strangely allowed selling. Retail investors were shut out of the market and as any student of microeconomics would know, by shutting buy but only allowing sell, the price is bound to fall. Meanwhile while hedge funds were able to keep trading not only in the market but also crosstrade in the dark pools (“private” stock markets that retail is shut out of, more on this later), and use this crucial lifeline given to them by the DTCC to prevent the squeeze from happening that day.
With retail abruptly being shut out from buy (even cash accounts were shut out, which didn’t make sense) and only allowed to sell, almost everyone could smell manipulation was afoot (which triggered the Congress hearing) and the most of the blame was pointed at Robinhood. Personally and in hindsight, I believe Robinhood was just a willing scapegoat. When we think about who had the most to lose if a short squeeze occurred, I’ll narrow it down to three entities, Shorts and their stakeholders (ie Citadel), Prime Brokers and the DTCC.
It’s important to remember that the actual impetus that triggered the shutdown of the market for retail investors came from the DTCC. Working backwards, if you consider that GME was rampantly naked shorted and DTCC and Prime Brokers would have to be complicit in it, I believe the DTCC, Primer Brokers and possibly Citadel (who provides 40% of Robinhood’s revenue) brazenly manipulated the market on 1/28 by shutting down purchasing for retail buyers to prevent the squeeze from being squoze on that day as doing so would be catastrophic for all aforementioned parties involved. I believe that on the upcoming Gamestop Congress hearings the Financial Services Committee needs to call on decision makers of DTCC and Prime Brokers explore their role and complicity in the shut out of retail buyers that day as well as being enablers of naked shorting in GME.
An interesting thought experiment: On 1/28 when the price was 450+ and shorts were likely under 100, if we assume prime brokers allowed naked shorting in GME, then when the squeeze was about to happen (or happening), if Prime Brokers had margin had called the shorts, they would presumably also also gone down because shorts would not be able to pay in that event and the brokers would be holding the bag. By that logic, they have every incentive in this case to NOT to margin call and instead the most logical option would probably would have been to make a backroom deal, which is what I personally think most likely happened.
If you’ve read up to this point, you might be thinking what can I do about this? I am aware that there a lot of cynicism that we can’t do anything, that there will be no justice for retail investors who were harmed this situation, and that institutions and people in power will prevent anything from being done. I feel this sometimes too, but remember:
A single voice can be drowned out, but if we all speak together then we will make our voice heard. Ape Strong Together.
With the hearing coming up on February 18th, I highly recommend you email and tweet the representatives involved in the hearing, as well as your own district representatives, and urge them to read into the factors presented in this post and call the DTCC and Prime Brokers to the hearingl. They need to be questioned on why GME has so many counterfeit shares, failed to deliver, their complicity in naked shorting, and investigated for their role in the retail shut down of 1/28. Below are 4 members of congress I recommend both tweeting and emailing
Alexandria Ocasio-Cortez https://twitter.com/AOC, email: [[email protected]](mailto:[email protected])
Al Green https://twitter.com/repalgreen, email: [[email protected]](mailto:[email protected])
Maxine Waters https://twitter.com/maxinewaters, email: [[email protected]](mailto:[email protected])
Nancy Pelosi Email: https://twitter.com/SpeakerPelosi email: [[email protected]](mailto:[email protected]).
And you can find other members of Financial Services Committee here to reach out to: https://financialservices.house.gov/about/committee-membership.htm
What follows should probably be a separate post, but I will take the opportunity to summarize some of the illegal tactics that shorts have been identified to be using in their war with retail investors. Note that this may not be an exhaustive list and there may be newer tactics deployed in the future. Retail investors might not have the same tricks, resources and willingness to break the law for profit as hedgies do, but my hope and belief is that if we pool our knowledge and analysis, we will figure out their game and effectively adapt.
Feel free to forward the list below to any representatives and lawmakers if you concur that these tactics were used:
Rampant Naked Shorting - With the extremely high number of Fail to Delivers (FTID) , short interest being as high as 226% recently, and institutions alone holding a staggering 177% of the total float (likely due in large part to counterfeit shares), signs strongly point to GME being rampant with naked shorts and counterfeit shares. I believe the original goal of shorts was to drive GME to bankruptcy with these naked shorts, using the laddering of naked shorts (aka short ladder attack), executed with the help of counterfeit stock which is a classic and reliable method of driving down the stock price. I believe the GME stock has seen relentlessly aggressive short attacks, especially on the week of Monday February 1st, which drove the stock price down and triggered panic selling.
Ladder Attacks with the help of Dark Pools - Another identified method of ladder attacks was identified to come from crosstrading with darkpools (the stock market has its own private stock exchange where institutions can trade…). Essentially darkpools are private stock markets retail investors do not have access to, where short side funds can purchase securities “off market” and then sell “on-market”, with the effect of creating a lot more downward pressure on the market without the upward pressure from buying.
Illegally masking shorts with synthetic longs. Another tactic shorts are suspected of using in GME is the use of illegally using options to evade short positions in violation of Reg SHO which SEC describes in this risk alert and which I elaborate in this post. Essentially it’s the use of using options to create synthetic longs to illegally and artificially cover and prolong short positions and at same time obscuring the true short interest %. If you consider that it would be far more profitable for shorts to not cover at high prices but instead ladder attack the price and wait for retail investors to lose interest and close their shorts at as low of a price as possible, then you can see why this strategy would be very effective.
Using way out-of-money call options to obscure true short interest. You may have heard about the 43 million worth of 800 dollar calls purchased when the price was 100 and found it odd. Later it was identified as a tactic to cheaply purchase synthetic call options (since at 800 its way out of money) to obscure their short positions (with the added benefit of hedging at 800 if a squeeze does happen)
One thing I want to note, particularly to legislators at the GameStop hearing: Retail investors were not incited to pump GME. Retail investors spotted a unique Short Squeeze opportunity created by the greed of short side hedge funds, whereby GameStop was being abusively naked shorted with the goal of bringing it to bankruptcy, and hedge funds were so greedy about it that they shorted the company with a short interest of 226% of float, meaning A LOT of counterfeit shares were being used to short the company. Retail investors saw this as an opportunity to short squeeze the hedge fund shorters, which is a legal and legitimate investment strategy. The short squeeze would have happened had everyone played fair, but instead, financial institutions who were culpable to the naked shorting intervened and shut down retail buying, hurting the retail investors and successfully manipulating the market. The investment itself was in my opinion a sound decision based on the short squeeze, but in hindsight retail investors did not seriously consider the risk of the market would be blatantly and publicly manipulated and that the market would be rigged against them.
If this post was useful (and I hope it was! Gave up my Friday night to write this for you Apes), please upvote for visibility and share it far and wide. The GameStop hearings could be a first step and hope towards legislative change, and it’s extremely important that the right story is told at those hearings (and by the right story I mean the real truth of what happened.) I hope the truly culpable parties are investigated and brought to justice. Again, I know many of us feel cynical that anything meaning will be done towards finding justice against the lawbreakers in this case, but if you feel even an ounce of injustice or empathy at how retail investors were unfairly harmed in the course of investing in GME, I strongly urge you to contact a legislator associated with the GameStop hearings and bring this to their attention so they can review this case with more complete information. In addition I recommend you to contact the SEC and any journalist you know or via journalist tip lines. It’s not going to be easy but the more awareness we raise the higher the likelihood our voices will be heard and positive change will be made.
As we navigate the rocky waters ahead, I’ll gift you with a favorite quote of mine:
The only difference between a nightmare and a dream is how big your balls are.
🚀🚀🚀
Disclaimer: I am not an investment advisor, I just like the stock.
Ps. If you’ve read to the end, I’ll leave you with a few more thoughts and reminders:
- If I were to distill life into one thing, it would be to never lose hope.
- Remember that if you’ve lost money in any way shape or form, don’t be depressed, money can always be made back and the important thing is to maintain a good attitude.
- Only invest what you can afford to lose.
- Perhaps the most important factor in good investing is patience.
If you’d like to read more about counterfeiting stocks this is a good place to start http://counterfeitingstock.com/CS2.0/CounterfeitingStock.html

Edit 1: More ARKQ buying today (~50k shares). Thank you everyone for the positive feedback and discussion!
Bottom Line Up Front (BLUF) or TL;DR for the non-military types:
LMT is a good target if you want to literally go to the moon, and my PT is $690.26 in two years (more than 2x from current levels). Justification and some possible trade ideas are listed below, just CTRL-F “Trade Ideas”. I hope you guys enjoy this work and would appreciate any discussion or feedback. I hope to catch you in the comments.
Team,
We interrupt today’s regularly scheduled short squeeze coverage to discuss a traditionally boring stock, LMT (Lockheed Martin), with significant upside potential. To be clear, this is NOT a short squeeze target like many reddit posts are keying on. I hope that this piece sparks discussion, but if you are just looking for short squeeze content, all I have to say is BUY, HOLD, and GODSPEED.
The source of inspiration for me writing this piece is threefold; first, retail investors are winning, and I believe that we will continue to win if we continue to identify opportunities in the market. In my view, the stock market has always been a place for the public to shine a light on areas of innovation that real Americans are excited about and proud to be a part of. Online communities have stolen the loudspeaker from hedge fund managers and returned it to decentralized online democracies that quickly and proudly shift their weight behind ideas they believe in. In GME’s case, it was a blatant smear campaign to destroy a struggling business. I think that we should continue this campaign by identifying opportunities in the market and running with them. It may sound overly idealistic, but if reddit can take on the hedge funds, I non-ironically believe that we can quite literally take good companies researching space technology to the moon. I think LMT may be one of several stocks to help get us there.
Second, a video where the Secretary of State of Massachusetts argues that internet boards are full of a bunch of unsophisticated, thoughtless traders really ticked me off. This piece is designed to show that ‘the little guy’ is ready to get into the weeds, understand business plans, and outpace analysts that think companies like Tesla are overvalued by comparing them to Toyota. That is a big reason that I settled on an old, large, slow growth company to do a deep-dive on, and try my best to show some of the abysmal predictive analysis major ‘research firms’ do on even some of the most heavily covered stocks. LMT is making moves, and the suits on wall street are 10 steps behind. At the time of writing this piece, Analyst Estimates range from 330-460 (what an insane range).
Third, and most importantly, I am in the US military, and I think that it is fun to go deep into the financials of the defense sector. I think that it helps me understand the long-term growth plans of the DoD, and I think that I attack these deep-dives with a perspective that a lot of these finance-from-day-one cats do not understand. Even if no one ever looks at this work, I think that taking the time to write pieces like this makes me a better Soldier, and I will continue to do it in my spare time when I am feeling inspired. I wrote a piece on Raytheon Technologies (Ticker: RTX) 6 months ago, and I think it was well-received. I was most convicted about RTX in the defense sector, but I have since shifted to believing LMT is the leader in the defense space. I am long both, though. If this inspires anyone else to do similar research on other companies, or sparks discussion in the community, that is just a bonus. Special shout-out to the folks that read more than just the TL;DR, but if you do just read the TL;DR, I love you too!
Now let us get into it:
Leadership
I generally like to invest in companies that are led by people that seem to have integrity. Jim Taiclet took the reins at LMT in June of last year. While on active duty, he served as a C-141B Starlifter pilot (a retired LMT Aircraft). After getting out he went to work for the American Tower Corporation (Ticker: AMT). His first day at American Tower was September 10, 2001. The following day, AMT lost 13 employees in the World Trade Center attack. He stayed with the company, despite it being decimated by market uncertainty in the wake of 9/11. He was appointed CEO of the very same company in 2004. Over a 16 year tenure as CEO of AMT the company market cap 20x’d. He left his position as CEO of AMT in March of last year, and the stock stagnated since his departure, currently trading at roughly the same market cap as to when he left.
Jim Taiclet was also appointed to be the chairman of the board this week, replacing the previous CEO. Why is it relevant that the CEO came from a massive telecommunications company?
Rightfully, Taiclet’s focus for LMT is bringing military technology into the modern era. He wants LMT to be a first mover in the military 5G space, military application of AI space, the… space space, and the hypersonic glide vehicle (HGV) space. These areas are revolutionary for the boomer defense sector. We will discuss this in more detail later when we cover the company’s P/E multiple and why it is absolute nonsense.
It is not a surprise to me that they brought Taiclet on during the pandemic. He led AMT through adversity before, and LMT’s positioning during the pandemic is tremendous relative to the rest of the sector, thanks in large part to some strong strategic moves and good investments by current and past leadership. I think that Taiclet is the right CEO for the job.
In addition to the new CEO, the new Secretary of Defense, Secretary Lloyd Austin, has strong ties to the defense sector. He was formerly a board member for RTX. He is absolutely above reproach, and a true leader of character, but I bring this up not to suggest that he will inappropriately serve in the best interest of defense contractors, but to suggest that he speaks the language of these companies effectively. I do not anticipate that the current administration poses as significant of a risk to the defense sector as many analysts seem to believe. This will be expanded in the headwinds section below.
SPACE
Cathie Wood and the ARK Invest team brought a lot of attention to the space sector when the ARKX, The ARK Space Exploration ETF, Form N-1A was officially filed through the SEC. More recently, ARK Invest published their Big Ideas 2021 Annual Report and dedicated an entire 7-page chapter to Orbital Aerospace, a new disruptive innovation platform that the ARK Team is investigating. This may have helped energize wall street to re-look their portfolios and their investments in space technology, but it was certainly not the first catalyst that pushed the defense industry in the direction of winning the new space race.
In June 2018, then President Trump announced at the annual National Space Council that “it is not enough to merely have an American presence in space, we must have American dominance in space. So important. Therefore, I am hereby directing the Department of Defense (DoD) and Pentagon to immediately begin the process necessary to establish a Space Force as the sixth branch of the Armed Forces". Historically, Department of Defense space assets were under the control of the Air Force. By creating a separate branch of service for the United States Space Force (USSF), the DoD would allocate a Chairman of Space Operations on the Joint Chiefs of Staff and clearly define the budget for space operations dedicated directly to the USSF. At present, this budget is funneled from the USAF’s budget. The process was formalized in December of 2019, and the DoD has appropriated ~$15B to the USSF in their first full year of existence according to the FY21 budget.
Among the 77 spacecraft that are controlled by the USSF, 29 of them are Lockheed Martin GPS satellites, 6 of them are Lockheed Martin Space-Based Infrared Systems (SBIRS), and LMT had a hand in creating and/or manufacturing for several of the other USSF efforts. The Next Generation Overhead Persistent Infrared Missile Warning Satellites (also known as Next-Gen OPIR) were contracted out to both Northrup Grumman (Ticker: NOC) and LMT. LMT’s contract is currently set at $4.9B, NOC’s contract is set at $2.37B.
Tangentially related to the discussion of space is the discussion of hypersonic glide vehicles (HGVs). HGVs have exoatmospheric and atmospheric implications, but I think that their technology is extremely important to driving margins down for both space exploration and terrestrial point-to-point travel. LMT is leading the charge for military HGV research. They hold contracts with the Navy, Air Force, and Army to develop HGVs and hypersonic precision fires. The priority for HGV technology accelerated significantly when Russia launched their Avangard HGV in December of 2019. Improving the technology for HGVs is a critical next-step in maintaining US hegemony, but also maintaining leadership in both terrestrial and exoatmospheric travel.
LARGE SCALE COMBAT OPERATIONS (LSCO)
The DoD transitioning to Large-Scale Combat Operations (LSCO) as the military’s strategic focus. This is a move away from an emphasis on Counter-Insurgency operations. LSCO requires effective multi-domain operations (MDO), which means effective and integrated strategies regarding land, sea, air, space, and cyberspace. To have effective MDO, the DoD is seeking systems that both expand capabilities against peer threats and increase the ability to track enemy units and communicate internally. This requires a modernizing military strategy that relies heavily on air, missile, and sensor modernization. Put simply, the DoD has decided to start preparing for peer or near-peer adversaries (China, Russia, Iran, North Korea) rather than insurgencies. For this reason, I believe that increased Chinese and Russian tensions are, unfortunate as it may be, a boon to the defense industry. This is particularly true in the missiles/fires and space industry, as peer-to-peer conflicts are won by leveraging technological advantages.
There are too many projects to cover in detail, but some important military technologies that LMT is focusing on to support LSCO include directed energy weapons (lasers) to address enemy drone technology, machine learning / artificial intelligence (most applications fall under LMT’s classified budget, but it is easy to imagine the applications of AI in a military context), and 5G to increase battlefield connectivity. These projects are all nested within the DoD’s LSCO strategy, and position LMT as the leader in emergent military tech. NOC is the other major contractor making a heavy push in the modernization direction, but winners win, and I think a better CEO, balance sheet, and larger market cap make LMT the clear winner for aiding the DoD in a transition toward LSCO.
SECTOR COMPARISON (BACKLOG)
The discussion of LSCO transitions well into the discussion of defense contractor backlogs. Massive defense contracts are not filled overnight, so examining order backlogs is a relatively reliable way to gauge the interest of the DoD in a defense contractor’s existing or emerging products. For my sector comparison, I am using the top 6 holdings of the iShares U.S. Aerospace & Defense ETF (Ticker: ITA). I hate this ETF, and ETFs like it (DFEN) because of their massively outsized exposure to aerospace, and undersized allocation to companies like LMT. LMT is only 18% smaller than Boeing (Ticker: BA) but is only 30.4% of the exposure of BA (18.46% of the fund is BA, only 5.62% of the fund is LMT). Funds of this category are just BA / RTX hacks. I suggest building your own pie on a site like M1 Finance (although they are implicated in the trade restriction BS… please be advised of that… hoping other brokerages that are above board will offer similar UIs like the pie design… just wanted to be clear there) if you are interested in the defense sector.
The top 6 holdings of ITA are:
Boeing Company (Ticker: BA, MKT CAP $110B) at 18.46%
Raytheon Technologies (Ticker: RTX, MKT CAP $101B) at 17.84%
Lockheed Martin (Ticker: LMT, MKT CAP $90B) at 5.62%
General Dynamics Corporation (Ticker: GD, MKT CAP $42B) 4.78%
Teledyne Technologies Incorporated (Ticker: TDY, MKT CAP $13B) at 4.74%
Northrop Grumman Corporation (Ticker: NOC, MKT CAP $48B) at 4.64%
As a brief aside, please look at the breakdowns of ETFs before buying them. The fact that ITA has more exposure to TDY than NOC and L3Harris is wild. Make sector ETFs balanced how you want them to be balanced and it will be more engaging, and you will likely outperform. I digress.
Backlogs for defense companies can easily be pulled from their quarterly reports. Here are the current backlogs in the same order as before, followed by a percentage of their backlog to their current market cap. All numbers are pulled from January earning reports unless otherwise noted with an * because they are still pending.
Boeing Company backlog (Commercial: $282B, Defense: $61B, Foreign Military Sales (FMS, categorized by BA as ‘Global’): 21B, Total Backlog 364B): BA’s backlog to market cap is a ratio of 3.32, which is strong, but most of that backlog comes from the commercial, not the defense side. Airlines have been getting decimated, I am personally not interested in having much of my backlog exposed to commercial pressures when trying to invest in a defense play. Without commercial exposure, their defense only backlog ratio is .748. This is extremely low. I understand that this does not do BA justice, but I am keying in on defense exposure, and I am left thoroughly unsatisfied by that ratio. Also, we have seen several canceled contracts already on the commercial side.
Raytheon Technologies backlog (Defense backlog for all 4 subdivisions: 67.3B): Raytheon only published a defense backlog in this quarter’s report. That is further evidence to me that the commercial aerospace side of the house is getting hammered. They have a relatively week backlog to market cap as well, putting them at a ratio of .664, worse off than the BA defense backlog.
Lockheed Martin backlog (Total Backlog: $147B): This backlog blows our first two defense backlogs out of the water with a current market cap to backlog ratio of 1.63.
General Dynamics Corporation backlog (Total Backlog: $89.5B, $11.6B is primarily business jets, but it is difficult to determine how much of their aerospace business is commercial): Solid 2.13 ratio, still great 1.85 if you do not consider their aerospace business. The curveball here for me is that GD published a consolidated operating profit of $4.1B including commercial aerospace, whereas LMT published a consolidated operating profit of $9.1B. This makes the LMT ratio of profit/market cap slightly in favor of LMT without accounting for the GD commercial aerospace exposure. This research surprised me; I may like GD more than I originally assumed I would. Still prefer LMT.
Teledyne Technologies Incorporated backlog (Found in the earnings transcript, $1.7B): This stock is not quite in the same league as the other major contractors. This is an odd curveball that a lot of the defense ETFs seem to have too much exposure to. They have a weak backlog, but they are a smaller growing company. I am not interested in this at all. It has a backlog ratio of .129.
Northrop Grumman Corporation backlog ($81B): Strong numbers here. I see NOC and LMT as the two front-runners in the defense sector. I like LMT more because I like their exposure to AI, 5G, and HGVs more than NOC, but I think this is a great alternative to LMT if you like the defense sector. Has a ratio of 1.69, slightly edging out LMT on this metric. LMT edges out NOC on margins by ~.9%, though, which has significant implications when considering the depth of the LMT backlog.
The winners here are LMT, GD, and NOC. BA is attractive if you think anyone will have enough money to buy new planes. BA and RTX are both getting hammered by commercial aerospace exposure right now and are much more positioned as recovery plays. That said, LMT and NOC both make money now, and will regardless of the impact of the pandemic. LMT is growing at a slightly faster rate than NOC. Both are profit machines, but I like LMT’s product portfolio and leadership a lot more.
FREE CASH FLOW
Despite the pandemic, LMT had the free cash flow to be able to pay a $2.60 per share dividend. This maintains their ~3% yearly dividend rate. They had a free cash flow of $6.4B. They spent $3.9 of that in share repurchases and dividend payouts. That leaves 40% of that cash to continue to strengthen one of the most stalwart balance sheets outside of big tech on the street. Having this free cash flow allowed them to purchase Aerojet Rocketdyne for $4.4B in December. They seem flexible and willing to expand and take advantage of their relative position during the pandemic. This is a stock that has little downside risk and significant upside potential. It is always reassuring to me to know that at the end of the day, a company is using its profit to continue to grow.
HEADWINDS
New Administration – This is more of an unknown than a headwind. The Obama Administration was not light on military spending, and the newly appointed SecDef is unlikely to shy away from modernizing the force. Military defense budgets may get lost in the political shuffle, but nothing right now suggests that defense budgets are on the chopping block.
Macroeconomic pressure – The markets are tumultuous in the wake of GME. Hedgies are shaking in their boots, and scared money weighed on markets the past week. If scared money continues to exert pressure on the broader equity markets, all boomer stocks are likely weighed down by slumping markets.
Non-meme Status – The stocks that are impervious to macroeconomic pressures in the above paragraph are the stonks that we, the people, have decided to support. From GME to IPOE, there is a slew of stonks that are watching and laughing from the green zone as the broader markets slip deeper into the red zone. Unless sentiment about LMT changes, I see no evidence that LMT will remain unaffected by a broader economic downturn (despite showing growth YoY during a pandemic).
TAILWINDS
Aerojet Rocketdyne to the Moon – Cathie Wood opened up a $39mil position in LMT a few weeks ago, and this was near the announcement of ARKX. The big ideas 2021 article focuses heavily on satellite technology, deep learning, and HGVs. I think that the AR acquisition suggests that vertical integration is a priority for LMT. They even fielded a question in their earnings call about whether they were concerned about being perceived as a monopoly. Their answer was spot on—the USFG and DoD have a vested interest in the success of defense companies. Why would they discourage a defense contractor from vertical integration to optimize margins?
International Tensions – SolarWinds has escalated US-Russia tensions. President Biden wants to look tough on China. LSCO is a DoD-wide priority.
5G.Mil – We still do not have a lot of fidelity on what this looks like, but the military would benefit in a lot of ways if we had world-wide access to the rapid transfer of encrypted data. Many units still rely on Vietnam-era technology signal technology with abysmal data rates. There are a lot of implications if the code can be cracked to win a DoD 5G contract.
TRADE IDEAS
Price Target: LMT is currently at a P/E of ~14. Verizon has roughly the same. LMT’s 5-year P/E ratio average is ~17. NOC is currently at a P/E of ~20. TSLA has a P/E Ratio of 1339 (disappointingly not 1337). P/E is a useless metric because no one seems to care about it. My point is that LMT makes a lot of money, and other companies that are valued at much higher multiples do not make any money at all. LMT’s P/E ratio is that of a boomer stock that has no growth potential. LMT’s P/E is exactly in line with the Aerospace and Defense Industry P/E ratio standard. LMT’s new CEO is pushing the industry in a new direction. I will arbitrarily choose a P/E ratio of 30, because it is half of the software industry average, and it is a nice round number. Plus, stock values are speculative and nonsense anyway.
Share price today: $321.82
Share price based on LMT average 5-year P/E: $384.08 (I see this as a short term PT, reversion to the mean)
Share price with a P/E of 30: $690.26
Buy and Hold: Simple. Doesn’t take much thought. Come back in a year or two and be happy with your tendies (and a few dividends to boot).
LEAPS Call Debit Spread (Based on last trade prices): Buy $375 C 20 JAN 23 for $26.5, Sell $450 C 20 JAN 23 for $12. Total Cost $14.5 for a spread width of $75. Max gain 517% per spread. Higher risk strategy.
LEAPS: Buy $500 C 20 JAN 23 for $7.20. Very high-risk strat. If the price target is hit within two years, these would be in the money $183 per contract for a gain of 2500%. This is the casino strat.
SOURCES
https://www.lockheedmartin.com/en-us/news/features/2020/james-taiclet-from-military-pilot-to-successful-ceo.html
https://www.warren.senate.gov/newsroom/press-releases/in-response-to-senator-warrens-questions-secretary-of-defense-nominee-general-lloyd-austin-commits-to-recusing-himself-from-raytheon-decisions-for-four-years
https://news.lockheedmartin.com/2019-08-30-Lockheed-Martins-Expertise-in-Hypersonic-Flight-Wins-New-Army-Work
https://www.lockheedmartin.com/en-us/capabilities/hypersonics.html
https://research.ark-invest.com/hubfs/1_Download_Files_ARK-Invest/White_Papers/ARK%E2%80%93Invest_BigIdeas_2021.pdf?hsCtaTracking=4e1a031b-7ed7-4fb2-929c-072267eda5fc%7Cee55057a-bc7b-441e-8b96-452ec1efe34c
https://www.deseret.com/2018/6/19/20647309/twitter-reacts-to-trump-s-call-for-a-space-force
https://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2021/fy2021_Budget_Request_Overview_Book.pdf
https://www.airforcemag.com/lockheed-receives-up-to-4-9-billion-for-next-gen-opir-satellites/
https://spacenews.com/northrop-grumman-gets-2-3-billion-space-force-contract-to-develop-missile-warning-satellites/
https://www.lockheedmartin.com/en-us/capabilities/directed-energy/laser-weapon-systems.html
https://emerj.com/ai-sector-overviews/lockheed-martins-ai-applications-for-the-military/
https://www.defenseone.com/business/2020/07/new-ceo-wants-lockheed-become-5g-playe167072/
https://www.wsj.com/articles/defense-firms-expect-higher-spending-11548783988
https://www.etf.com/ITA#efficiency
https://s2.q4cdn.com/661678649/files/doc_financials/2020/q4/4Q20-Presentation.pdf
https://investors.rtx.com/static-files/dfd94ff7-4cca-4540-bc4b-4e3ba92fc646
https://investors.lockheedmartin.com/static-files/64e5aa03-9023-423a-8908-2aae8c7015ac
https://s22.q4cdn.com/891946778/files/doc_financials/2020/q4/GD_4Q20_Earnings_Highlights-Outlook-Final.pdf
https://www.fool.com/earnings/call-transcripts/2021/01/27/teledyne-technologies-inc-tdy-q4-2020-earnings-cal/
https://investor.northropgrumman.com/static-files/6e6e117f-f656-4c68-ba7f-3dc53c2dd13a

I want to preface that the contents of this post is for informational purposes. I do not condone or approve of any harassments or witch-hunting or the attacking of anybody.
 
Richard Lewis recently did a stream talking about the terrible state of CS esports and I thought it was an important stream anyone who cares about the CS community should listen to.
Vod Link here: https://www.twitch.tv/videos/830415547
I realize it is 3 hours long so I took it upon myself to create a list of interesting points from the stream so you don't have to listen to the whole thing, although I still encourage you to do so if you can.
I know this post is still long but probably easier to digest, especially in parts.
Here is a link to my raw notes if you for some reason want to read through this which includes some omitted stuff. It's in chronological order of things said in the stream and has some time stamps. https://pastebin.com/6QWTLr8T

Intro

• "The last month has convinced me, that we are going to be heading into a dark place for Counter-Strike esports in 2021."
  • "I think I've seen the scene essentially kill itself."
• "For the past 5 to 6 years, we've basically been in a holding pattern of people coming into our game wanting to run it, wanting to run all of the esports and wanting to profiteer and its been sort of a concerted effort to drive them off and push them away."
  • "We're spread way too thin."
• "If Riot don't get involved and stop the scumbags that have moved over to Valorant from getting their feet under the table, Valorant is going to have real problems."
• RL thinks too much has happened all at once for us to do anything except watch it play out, like:
  • Recent CSPPA strike against BLAST
  • ESIC failures and them not being supported enough
  • Teams cheating i.e. coaches/bugs
  • Widespread match fixing
  • The Pandemic
    • "People who try to hold bubble events are so incompetent and fuck up and people get the 'rona and its their fault."
    • "People who say Flashpoint is a bubble is full of shit and is a lie and people are now suffering for that lie."
      • "To save money they let people go home and break the bubble for a week."
      • "Not just Flashpoint peoples decision, they have a partner that handles the production." (hinting FACEIT)
      • "People are trapped in hotels essentially under house arrest because of COVID restrictions and has fucked peoples lives up."
• "It's all too much, all of this incompetence, all of this greed, maybe we ride it out."
  • RL says he has talked to the Riot devs (the ones working on Valorant) and says, "They are so cognizant of all the fuck ups and all the problems we have in Counter-Strike."
    • He continues to say that this is factored into their business plan and that we never had a competitor, but just so happens to have one coincide, when we are at our worst.

CSPPA - Counter-Strike Professional Players' Association

"Who does this union really fucking serve?"

• RL believes that the CSPPA is a mockery.
  
  • He points out the hypocrisy that they wouldn't strike for the pros who were kicked out of ESL Pro League, or for Jamppi or dream3r.
    • He also says ESL paid CSPPA and are racketeering and many other TOs have to pay them to get their "seal of approval"
      • He says they would strong-arm TOs saying "well if you don't give us the money, these guys are so we'll just have to commit to playing their event."
    • Also points out that they will strike against a competitor they are not in agreement with (Flashpoint)
    • RL: "It's what it says about every other time you haven't done it and it's about every time you don't do it now moving forward." "The issues they've chosen to ignore this year alone are embarrassing."
    • Then he points out that there was no strike for Valve qualifiers even if we have no major but Jamppi and dream3r can't play in them.
      • "and Valve have said 'Oh yeah we know actually their stories are accurate, Jamppi didn't cheat, now in a legally binding document. Yep dream3r did have his account hacked in a LAN café', but they still can't play. Where is the fucking solidarity? Gone. Doesn't exist. It's not important [because] it doesn't affect you." "That's what the union does right now, it looks after all the tier 1 people."
• He says the CSPPA doesn't represent all players all the time and has driven a divide where you have the haves and have-nots
  
  • "We have a tier of players that operate with impunity and do not help their tier 2 or tier 3 players out at all." "If you are not a tier 1 player you do not matter, they don't event ask your opinion."
  • He tells chrisJ to admit and own the fact that the reason he didn't speak up during the ESL Pro League debacle is because it didn't affect him
  • "They are looking after some players at the expense of other players. How the fuck is that a union?"
• He says the BLAST situation is a reasonable dispute and supports the players but is not the right time for a strike and have not even identified the correct enemy
  
  • He thinks players are lashing out now due to previous incidents and are upset that BLAST are working with ESIC
    • He stated that CSPPA shouldn't beefing with ESIC and they should be working in harmony
  • He says what they need to do is talk with the teams/organizations that have sold that right to BLAST
    • RL: "Your employers, the people who pay you that massive exorbitant salaries, when you don't stream and you don't do interviews and you offer no value beyond your ability to click heads and you get 25k dollars a month." "Why don't you talk to them about it? Oh right. You're happy to take away BLAST's paper, but you don't want to risk your own."
  • "I am seeing such unbelievable cowardice from the players here with the battles you choose."
  • "Where was the strike action when in the qualifiers for the world championship, there were teams and players engaged in huge conflicts of interest?" "Where was the strike action when your image rights were taken and sold to every league you've ever been in every union type organization you've ever been associated with like, WESA, to your org every time you sign a contract, to the leagues you play in."
    • "Your image rights are essentially worthless now, there's about 10 fucking separate parties that have them, and how many of them are giving you anything for it? Not much pretty much your org by the way."
    • "That's a big issue. Your image is you, your image is your brand. What are you doing about that? Nothing."
• He is also angry at SirScoots who is "popping off" at people on Twitter who all want the same thing, which is 'A unified Counter-Strike scene for everybody, that works for everybody, that has a sustained ecosystem that nourishes everybody.' "We don't have that now."
  
• He also says their rankings are a joke
  
  • "Just so happened, oh look TACO, that very important prominent member of the board, we pushed his team artificially up when they weren't even in the fucking top 20, not by a long shot."
• He also says the ineptitude of the CSPPA cost Flashpoint a monitor sponsor
  
• "Is it really a player association or is it like a fucking agency at this point"
  

ESIC - Esports Integrity Commission

"They have been put in an impossible position."

• RL says that Ian Smith, the founder of ESIC and who was done work in mainstream sports, is a good and honorable man who has dedicated his life to integrity and sports. He takes on both sides, ensuring match fixers are punished, but also doing appeals and ensuring those punishments were fair.
• "ESIC is a tiny organization" and are in need of money, "They didn't run a grift like the CSPPA did."
  • "Saying 'you want our support and you want the players to turn up you better pay us.' They don't do that."
  • "Had startup seed money from MTG and since then they've been pecking shit with the hens."
    • Ian Smith made sure that the money given by MTG (Modern Times Group, parent company of ESL, ESEA, DreamHack) was nothing more than startup money and wouldn't be in debt to them
      • Ian Smith sat down with other TO's not part of MTG and wanted to partner with them. They declined and called ESIC "ESL spies and we will never align ourselves with you"
  • "They only were just able to afford, hiring a PR guy on a full time salary to deal with the press and send out those releases you've seen, this year."
    • "They have a tiny group of staff investigating these things and they have taken on the biggest problems in our scene: the cheating, the match fixing."
• ESIC have had "unprecedented levels of cheating to deal with, because there's something wrong with our scene ever since we went online. There's something wrong with it, everyone's lost their fucking pride and self-respect and they got no passion for it anymore, so they think fuck it, what's in it for me?"
  • He calls out coaches who are talking about players rights when they would rob and steal from them.
    • Also says more coaches being banned are coming
    • He also points out flaws in community's reaction to the punishments to coaches bans: "Half of the cunts still have jobs and some of the cunts got new jobs. We didn't even shun the cheating coaches."
• ESIC have "found I think another 2 or 3 exploits like that one and they are investigating them all right now, it's going on right now."
  
  • "I know that there are going to be more names getting banned, again."
  • "So they're doing that on a skeleton crew while, investigating 3 continents worth of match fixing in MDL and semi-pro level CS." "They're doing this with half a dozen people." "They don't have any money or any help. People barely even fucking cooperate with them, they are treated like pariahs. It's ridiculous."
    • "Why are the CSPPA popping off at ESIC on my Twitter timeline, when you should be working together." "because its all about what's in it in for me." "2020, the online era of CS: 'What is in it for me?' How can I cheat, how can I get my paper, how can I bleed this scene one last time before I fuck off and play shooty shooty bang bang Riot Games babys first fps."
• RL says that in the CIS region, teams have gone to tournaments and have been eliminated multiple times by the same team. We found out they were cheating and those players who lost, have been cut from their roster, careers ended because of cheaters.
  

Stream Sniping

"They're all at it in the online era, they're all at it, they're all cheating, they're all using exploits, probably that see through smoke bug got used a bunch of times"

• RL talks about how there is no integrity from dead (the player), always denying when caught doing something
  • On the topic of 'BLAST never said we couldn't stream snipe': "Lies, BLAST never said you could do that, they had to sort of retcon it." "because what happened after that they fucking started snitching and squealing"
    • "Suddenly you had like, 10 of the top 15 teams in the world, staring into the abyss of being banned for 6-12 months in line with ESIC recommendations."
      • He says that ESIC was put in a tough situation and couldn't enforce the bans because it would have resulted in killing CS. What resulted was, BLAST, ESIC, and teams came together and gave them a warning and told them, in RL's words "don't do this again or you're gonna get got."
        • He then says the top teams brushed this off and didn't give a fuck
        • The new MiBR team playing Flashpoint, that wasn't involved in the previous incidents are doing it again (stream sniping). He gave credit to Flashpoint for the quick resolution and punishment and respect for cogu's response to the situation.
        • "ESIC came out and said, once more, 'Guys, zero tolerance from now on.'" RL then got upset at community's reaction calling ESIC "pussies" for their non enforcement and said if we want competitive CS we cant ban the top 10 teams.
• He points out how players have no integrity and will do anything for an edge as long as they won't get detected or banned or it's within a grey area.
• "All of this shit was mad avoidable, even in the pandemic era."
  • He talks about why aren't we filming them. Why aren't there representatives for leagues and tournaments making sure players aren't cheating?

Match Fixing

"How many years have we let our scene be fucking pillaged by these greedy cunts?" "We just let it happen."

• RL says that gambling and skins betting which existed in moderation was "accelerated and blown up by the Call of Duty greedy fucks."
  • "Never forget TmarTn was on the board of EnVyUs." "His website, CSGOLotto, they had a bunch of off-the-books sponsorships." "NBK promoted them. People forget."
• "Those people who had access to the skins, go to the players" "Even people like s1mple, best player in the world, even he scammed knives and skins off fucking fans."
• Owners of skin casino sites would approach pros and lend them skins to use in tournaments and possibly keep them after reaching a deal
  • Players would tip off inside info about matches and teams in exchange for skins. Info such as: roster changes, how they played in scrims
    • They would use this info to bet and subvert the odds on their sites. "That happened religiously, I can't even tell you how many times it happened."
      • "I had access to the biggest database of information, from an inside betting circle in NA, and it would take information and screenshots from other pro players, who were feeding them info in exchange for money or skins."
        • "Some of these players are still playing." "Incredibly, there are players still in the CSPPA today, complaining about the BLAST recordings, that were embroiled in this murky shit back then."
• RL also says that there were tournaments where teams contrived with each other, who should throw, who should win.
• "There's a handful of people that are trying to fucking clean it up, and you think you get something over the line and you see something like the CSPPA and it's run by corrupt fucking chuckle heads, and now you've got another corrupt body you have to fight on a fucking daily basis, it's demoralizing."
  • "It's too far gone. Our entire semi-professional scene is compromised."
• "It's rife guys, I'm not going to lie any more. It's not just China, it's not just Russia, it's here, it's NA, it's Europe, it's Australia, so much more than you think, so much more than we can prove."
  • "I get sent chat logs all the time […] and they're morons, these players, short-sighted, amateur, morons and they're doing it on WhatsApp." People would get cut from the bets because they want to make more money, then they leak the logs. He says, from the chat logs, they spread "little" bets across every site they can (400 to 1k dollars) to prevent shifting odds
• He says the scumbags who've fucked off to Valorant will do the same there if Riot doesn't do something and says Valorant "is an esports scene heading for a very early fall based on the sheer volume of scumbags that are already there."
• "That's tier 2 CS in a nutshell these days. They know they're never going to play in a major, so what's the punishment?"
  • "All of these tier 2 fucks that are fixing games now they are like the fucking mafia compared to iBuyPower" "These guys are working with organized criminals to fix entire seasons worth of games. That's what's going on in your tier 2 CS."
• "I'm literally being told that there are players fixing games at all levels of Chinese esports and motherfuckers with guns are turning up to team houses and stuff."

North America

"Everyone in NA has left we've lost a continents worth of support during this pandemic and Valve haven't said a fucking word."

• RL says the Call of Duty "goblins" that destroyed CS for years are the same people who are now trying to leave CS. "The nerve to treat a game where the fans, and the community, and the TO's were nothing but good to you." "To just kick the players out now and go and leave and say 'It just doesn't make financial sense.' Oh you'll slither back when we have a major though for them stickers won't you."
• There's a cascading effect in NA where people don't bother with CS anymore and people like Chaos suffer.
• He says NA team owners are incompetent for always wanting it easy and always wanting a guarantee on their investment without skill or nuance.
  • RL says he would be able to market a team correctly and would have a good ROI and also points out how TSM wouldn't even be bothered to tweet that their team, which was one of the best in the world, was playing at the Major.
  • He also says not all NA owners are like that, compliments and respects Jason Lake who nearly lost everything to keep Complexity going.
• He then calls out the incompetence in Infinite Esports when they acquired OpTic Gaming and bought an Indian CS team.
  • He says HECZ is not to blame here and that they couldn't tell forsaken was cheating when it was so obvious.
    • They measured his reaction time to the likes of dev1ce and s1mple
    • When an enemy showed up on his screen he won that duel something like 44% of the time
    • "was like the number 1 player in the world statistically"
    • He brought a laptop to their bootcamp and refused to use the high end PCs that hey provided
• He respects Andy Miller (NRG CEO) and HECZ but says that the attitude of not being able to easily monetize their teams is "piss weak" and there needs to be a risk.
  • He says Chaos EC shouldn't be cutting their roster and should be competent enough to be able to figure out how to make money off their team.
• He says there are still opportunities in NA and people are panicking and pulling out, and says Valorant will be the same if not worse.
  • He also says "bums" who couldn't even get out of groups in NA competitions, are making crazy money in Valorant and says it will continue to inflate.
• He also said that he heard rumors that EG (Evil Geniuses) are done.
• He also thinks that the rumors of a Valve franchised league from before was sparked up from "these lazy fabled weak NA fucking team owners basically trying to see if Valve would bite at the hook if it was dangled and they didn't"
  • Slasher says NA team owners are really in favor of franchised leagues because they want to make more money. "Most of the powerful team owners right now are on board with ditching this third party organization structure, or they are trying to play this power politics with all the TOs, and that is contributing to a lot of the problems there"
• RL says that Riot has proved they can run a franchised league (LCS) and will be profitable in 2021 which is what a lot of team owners care about and says the competition will only serve to snatch people away from CS.
• RL continues to say, "I am so sick and tired of what we have done to this scene, I am just exhausted with it." "I think we have legitimately fucked it, I really think we have. I think we're staring into almost like a CGS (Championship Gaming Series) wasteland in NA." "Counter-Strike esports is a fucking joke."

Talent

"TO's have treated CS talent like absolute human garbage for years now."

• RL says that people like Sean Gares and ddk switching over to Valorant isn't for financial reasons because they are making less over there.
• He points out that TO's can't even give talent a 3 month in advance calendar.
• Because of the pandemic TO's won't hire certain people and some people are working more hours for the same money.
• He says we as a community don't respect journalists enough which is why we don't have good journalists.
  • He also says DeKay is leaving the scene soon and that Thorin is close to leaving also
• He says he had to talk a caster down from quitting and was struggling to find reasons.
• He says that DreamHack told Vince they would hire him but not if he wants to stick with dusT and says that this is the norm in esports. "Constant leveraging of people against each other." and says this is why we don't have a talent union.
• New gen casters are getting put into shit situations and the community's reaction to them is adding fuel to the fire
• He says the reason Moses left was because of the terrible conditions
• He says that Anders had to constantly leave his family and kid because someone fucked up or broke promises and had to constantly tell his kid to their face that "daddy can't be home this weekend."
• He says that esports has always been a lie to sell you this dream, "Meanwhile there's about 2% of the cunts getting all the checks."

Valve

"Anything that Riot does, is better than Valve's inaction"

• Slasher says that the larger aspect of esports as a whole compared to other entertainment mediums and Valve's lack of inattention are the bigger problems. He continues saying that the fact that Valve let their game be ran as an esport, they need to take on the responsibilities of it.
  • Both Slasher and RL wants Valve to take control but not on the level of Riot Games, there needs to be a balance.
• In case it was ever a question: Gabe Newell has been to 0 CSGO Majors.
• RL calls Valve out saying they could have done something during the gambling era.
• He says Valve used to come to the majors, but doesn't think they do anymore.
• RL had met with Valve at the Cluj-Napoca Major and had tried to appeal iBP's indefinite punishment and had also gave Brax's life story:
  • A recent family member passed away, they had lost a lot of income, they had to live in trailer, iBuyPower did not pay any salaries, and was pressured by family to make money who didn't support his career.
  • RL said that Valve told him, "How dare you try and make us feel guilty." "We shouldn't feel bad about enforcing the only thing that matters that we need to make players afraid of: cheating and match fixing"
  • RL also tried to share other info about match fixing and nothing came of it
• RL points out that Source 2 or a new engine is not something you will want based on the experience of transitioning from CS 1.6 to CS:S. "Valve's track record with brand new engines being launched, not fucking great from what I remember."
• Slasher says "If there is anything the community should do, is pressure Valve to hire a community manager."
  • They say that we need a commissioner, a community manager (not the person who runs the Twitter who posts memes all day), then we need to have a circuit
• RL reiterates that Valve doesn't care about CS esports and says they need to change the culture at Valve to make them care about CS esports
  • Slasher says a systemic problem is making it so working on CSGO would be a bad decision for you as an employee for Valve
• He also hasn't talked to Valve in ages and have sent over bugs and cheats and doesn't get emails back anymore
• Slasher says we should be directing attention at the developer leads, pointing out Ido Magal, if he even is still the project lead
  • RL thinks that Ido and Brian are the only people that "vaguely even give a fuck about CS" and were the only people that RL recalled that actually read Reddit and paid attention from time to time
• "It is really fucking precarious. Somebody has got to step the fuck up and start giving a shit"
  • Slasher suggests org owners, with CSPPA, with ESIC, with TOs have a concerted effort against Valve
• "Riot Games are doing better things than Valve in the esports space" which is something RL didn't think he'd say.
• "People who used to be talent, working with unions, arguing with other talent, when the unions fucked them over, can't understand their perspective, TOs fucking over broadcast talent, broadcast talent wanting to leave and go and work for orgs, orgs having no money, Valve might take coaches away because all the coaches are cheating, ESIC has about 4 people in a fucking call doing the investigations, everyone thinks they're spies for ESL, ESL are just the evil fucking overlords wanting to rule the scene and will just somehow, like cockroaches outliving a nuclear bomb, and Valve are in a fucking holiday in Hawaii thinking about the next Dota character because they don't give a fuck about us."

Closing Statements

"We've peaked. If we want to sustain and exist, now is the time to figure it out. No esports lasts as long as this, we've already done 8 years. We've already broke the records. We have got to figure out a way to coexist and drive the negative forces out and we need to do it as a collective and we're not doing that."

• RL compared the Counter-Strike scene to the people on the Titanic who ran around with guns robbing people while the boat was sinking.
• "We have given up on being a respectable esports scene." "We are now a conduit to make money for those who want to just milk it, just have one last ride, one last roll of the dice. It's done." "What a fucking mess. What have we done to our fucking scene?"
• "There's just too much self-interest driving all of this." "I don't see a way we stop the dominoes." "When it's that bad, when there's that many dishonest people that ESIC have to come out and say that if we punish them all there's no one left. What does that tell you?"
• "How many opportunities have we had to clean house? How many times have we said, 'this must never happen again', and another scandal." "The entire skins betting operations was the biggest criminal conspiracy in esports ever executed and no one has been punished for it." "The people who could be driving that don't want to."
• "Right now people are fans of those organizations because the scene has value. It is worth being a fan of Astralis because they are excellent at Counter-Strike. It is worth being a fan of s1mple because he is the best player in Counter-Strike, maybe the exception of ZywOo. If the scene is devalued, if the scene loses its meaning, those things lose its meaning too, and people will leave, people will stop tuning into the games. I have seen it happen in multiple esports, this is not my first time at the rodeo. I am getting big Brood War vibes right now and I don't like it."
• "The role you play in all of this as fans, as viewers, as listeners, as consumers of esports content, it's absolutely imperative that you know who the good guys are. It's absolutely imperative that you use your voice. It's absolutely imperative that when things are bad, you know who, at least, is trying to make them good, and you have to apply your criticism to the right targets."
  • He continues saying it's no good in continuing to attack ESIC and saying how they are bad, ESIC have it hard
• He says CSPPA are on the right side of the argument on BLAST but have been on the wrong side of many arguments many times.
  • "If you are not willing to stand along side the weakest member of the union, with the least amount of influence, and the least amount of power, then it is not a union at all and you shouldn't pose as one." "You wanna serve a bunch of special interest do it, everyone else in esports fucking does, but do not pose as something you are not." "We love the players. I've been fighting for players rights for as long as I've been able to, but the CSPPA is not what we needed."
    • "They are not applying the pressure to the right people, they are not fighting the right battles, they are not helping their weaker members."
• He says what orgs have done by keeping or hiring coaches is bad. "When you give up on holding an appreciable standard, you've lost the scene" "Competition matters, rules matter, punishments matter, achievements matter, excellence matters" "If you start stripping that away, you have nothing" "You guys need to take that knowledge and apply it sensibly."
• "Valve has sold you all down the river, they sold everyone in the esports scene down the river, tournament organizers are selling their talent down the river. Don't hate on them for sounding tired after a 16 hour day. Don't hate on them because the hype for a matchup they've seen for the 20th time in the past 3 months, they can't be as excited or it sounds contrived. Support your guys, they're there for you, these are your people."
• "This community has got to start acting like one for the first fucking time. Just put the petty shit away, let's try and fix this fucking scene while we still have one to save."
• "You can't rely on Valve, you can't rely on ESL, you can't rely on the CSPPA, you can't rely on anyone." "Once again, it's gonna be the likes of us, the amateurs, the people who give a fuck, rolling up our sleeves and grafting." "I'm old and tired and I don't want to have to do it again. People need to pick up the torch and do it."
  • "Like Michal did, like Dudenhoeffer did. You see something wrong, fix it. You see somebody doing something wrong, call it out. If you think something could be better, let people know."
• "Vote with your wallets if you're not happy with the direction Valve goes in. If when we do get to the Major, they serve up another subpar, same old bullshit stickers and signatures package again, do not buy it."
  • "You're a powerful block and if you use it correctly we can fucking avert this disaster."
• "I'm not doing another year in this broken, bust-up fucking scene, where everyone is miserable, everyone is broke, everyone is tired, and everyone is trying to fucking rob everyone else, blind, while the fucking people who are meant to be protecting you, are just fucking enhancing it and lining their own pockets."
  • "I'm not doing it anymore and you shouldn't want to do it either."
• "I stand by every fucking thing I said. I mean it, because this game fucking matters to me, this scene fucking matters to me. I put my life into this, my adult life, and to see it in this state is fucking sad."

TLDR: GameStop’s Congress hearing is on Feb 18th, they need to investigate the Prime Brokers and DTCC for their complicity in enabling naked shorting within GME and by extension, potential collusion to shut down trading on Jan 28th, the day the short squeeze was going to kick off. (stick to the end for an analysis of some illegal tactics short side hedge funds have been using)
Thesis: On the day the retail market for GME shut down on 1/28 (the day the short squeeze would’ve happened had there been no market intervention), DTCC (clearing house monopoly) shut down retail buying in order to protect itself and Prime Brokers (which privately own the DTCC) from being exposed to the consequences of being party to illegal activity. I believe Prime Brokers and DTCC need to be called to the GameStop hearing on February 18th to be questioned for their complicity in enabling illegal naked shorting of the GME stock, as well as potential collusion to shut out retail buyers on 1/28.
In my previous post (which I recommend reading for some context) I explored the subject of rampant illegal naked shorting in GME, and how Prime Brokers (consisting of banks like Goldman, Morgan, etc) and DTCC would be complicit in the naked shorting. This in turn raises the thought experiment that they would be incentivized to do anything possible to prevent the short squeeze from happening on 1/28 because had the short squeeze happened, the shorts would go bankrupt and their Prime Brokers who lent them their naked shorted shares would need to cover the shares. This would not only represent a humongous capital expense for Prime Brokers, the culpability of Prime Brokers (and that of the DTCC) in this situation would also have likely been exposed as well.
A quick primer on what a Prime Broker is: Prime Brokers are essentially the service side of the short- selling business. They lend out securities and cash, you can think of them as the “house” in a casino: They provide a gambler with markers to play and to manage his winnings. According to Matt Taibi, “Under the original concept, if a hedge fund that wanted to short a stock they would first need to “locate” the stock with his Prime Broker but as time passed, Prime Brokers increasingly allowed their hedge-fund customers to use automated systems and “locate” the stock themselves, and what this does is enable short-sellers to sell stock without delivering and thereby perform naked shorts with counterfeit shares. (source: https://web.archive.org/web/20210213125246/https://www.rollingstone.com/feature/wall-streets-naked-swindle-194908/). (I highly recommend you read Matt Taibi’s article on naked shorting and how it was used to take down Bear Stearns and Lehman Brothers. There are so many parallels with GME it’s hard to miss. It’s amazing to consider that 12 years after this article was published and brought to public awareness, the problem of naked shorting still exists as a systemic issue.)
Prime Brokers have a long history of being associated with naked shorting. To highlight a few examples, Prime Brokers like Merill Lynch and Goldman have long been implicated for naked shorting Overstock.com (https://www.rollingstone.com/politics/politics-news/accidentally-released-and-incredibly-embarrassing-documents-show-how-goldman-et-al-engaged-in-naked-short-selling-244035/, https://www.forbes.com/2007/02/02/naked-short-suit-overstock-biz-cx_lm_0202naked.html?sh=271400d1763f). Another example is when Goldman’s Prime Brokerage was implicated by the SEC in 2016 and got away with a small fine of 16 million (Source: https://www.sec.gov/news/pressrelease/2016-9.html). An example that very recently came in the news is a story where CIBC, BOA, UBS and TD Bank Prime Brokerages are accused of facilitating naked short selling and using counterfeit stock to attack and bring the stock price of a company from $34.77 to $1.83 (Source: https://www.securitiesfinancetimes.com/securitieslendingnews/industryarticle.php?article_id=224548).
The DTCC also has a very long history of being associated with naked shorting. The Wall Street Journal noted that 1% of the DTCC’s volume end in failure to deliver which “have put DTCC in the middle of a long-running fight over whether unscrupulous investors are driving down hundreds of small companies' share prices… DTCC has turned a blind eye to the naked-shorting problem. ” (Source: https://www.wsj.com/articles/SB118359867562957720). The DTCC has also had numerous complaints submitted to the SEC for enabling naked shorting (source: https://www.sec.gov/rules/proposed/s72303/decosta122203.htm) and have been sued tens or hundreds of times for assisting naked shorts (source: https://smithonstocks.com/part-3-in-series-on-illegal-naked-shortings-role-in-stock-manipulation-prime-brokers-and-the-dtcc-have-a-troubling-monopoly-on-clearing-and-settling-stock-trades/ and http://counterfeitingstock.com/CS2.0/CounterfeitingStock.html and https://www.wsj.com/articles/SB118359867562957720)
On 1/28 Robinhood received a letter from the DTCC at 4 am requiring them to halt trading or come up with 3 billion dollars, which Robinhood did not have, and therefore with one swoop of the pen the DTCC shut down buy side momentum but strangely allowed selling. Retail investors were shut out of the market and as any student of microeconomics would know, by shutting buy but only allowing sell, the price is bound to fall. Meanwhile while hedge funds were able to keep trading not only in the market but also crosstrade in the dark pools (“private” stock markets that retail is shut out of, more on this later), and use this crucial lifeline given to them by the DTCC to prevent the squeeze from happening that day.
With retail abruptly being shut out from buy (even cash accounts were shut out, which didn’t make sense) and only allowed to sell, almost everyone could smell manipulation was afoot (which triggered the Congress hearing) and the most of the blame was pointed at Robinhood. Personally and in hindsight, I believe Robinhood was just a willing scapegoat. When we think about who had the most to lose if a short squeeze occurred, I’ll narrow it down to three entities, Shorts and their stakeholders (ie Citadel), Prime Brokers and the DTCC.
It’s important to remember that the actual impetus that triggered the shutdown of the market for retail investors came from the DTCC. Working backwards, if you consider that GME was rampantly naked shorted and DTCC and Prime Brokers would have to be complicit in it, I believe the DTCC, Primer Brokers and possibly Citadel (who provides 40% of Robinhood’s revenue) brazenly manipulated the market on 1/28 by shutting down purchasing for retail buyers to prevent the squeeze from being squoze on that day as doing so would be catastrophic for all aforementioned parties involved. I believe that on the upcoming Gamestop Congress hearings the Financial Services Committee needs to call on decision makers of DTCC and Prime Brokers explore their role and complicity in the shut out of retail buyers that day as well as being enablers of naked shorting in GME.
An interesting thought experiment: On 1/28 when the price was 450+ and shorts were likely under 100, if we assume prime brokers allowed naked shorting in GME, then when the squeeze was about to happen (or happening), if Prime Brokers had margin had called the shorts, they would presumably also also gone down because shorts would not be able to pay in that event and the brokers would be holding the bag. By that logic, they have every incentive in this case to NOT to margin call and instead the most logical option would probably would have been to make a backroom deal, which is what I personally think most likely happened.
If you’ve read up to this point, you might be thinking what can I do about this? I am aware that there a lot of cynicism that we can’t do anything, that there will be no justice for retail investors who were harmed this situation, and that institutions and people in power will prevent anything from being done. I feel this sometimes too, but remember:
A single voice can be drowned out, but if we all speak together then we will make our voice heard. Ape Strong Together.
With the hearing coming up on February 18th, I highly recommend you email and tweet the representatives involved in the hearing, as well as your own district representatives, and urge them to read into the factors presented in this post and call the DTCC and Prime Brokers to the hearingl. They need to be questioned on why GME has so many counterfeit shares, failed to deliver, their complicity in naked shorting, and investigated for their role in the retail shut down of 1/28. Below are 4 members of congress I recommend both tweeting and emailing
Alexandria Ocasio-Cortez https://twitter.com/AOC, email: [[email protected]](mailto:[email protected])
Al Green https://twitter.com/repalgreen, email: [[email protected]](mailto:[email protected])
Maxine Waters https://twitter.com/maxinewaters, email: [[email protected]](mailto:[email protected])
Nancy Pelosi Email: https://twitter.com/SpeakerPelosi email: [[email protected]](mailto:[email protected]).
And you can find other members of Financial Services Committee here to reach out to: https://financialservices.house.gov/about/committee-membership.htm
If there's one thing I took away from this its that we can't wait for other people to do the right thing, we each need to individually step up to ensure it happens
What follows should probably be a separate post, but I will take the opportunity to summarize some of the illegal tactics that shorts have been identified to be using in their war with retail investors. Note that this may not be an exhaustive list and there may be newer tactics deployed in the future. Retail investors might not have the same tricks, resources and willingness to break the law for profit as hedgies do, but my hope and belief is that if we pool our knowledge and analysis, we will figure out their game and effectively adapt.
Feel free to forward the list below to any representatives and lawmakers if you concur that these tactics were used:
Rampant Naked Shorting - With the extremely high number of Fail to Delivers (FTID) , short interest being as high as 226% recently, and institutions alone holding a staggering 177% of the total float (likely due in large part to counterfeit shares), signs strongly point to GME being rampant with naked shorts and counterfeit shares. I believe the original goal of shorts was to drive GME to bankruptcy with these naked shorts, using the laddering of naked shorts (aka short ladder attack), executed with the help of counterfeit stock which is a classic and reliable method of driving down the stock price. I believe the GME stock has seen relentlessly aggressive short attacks, especially on the week of Monday February 1st, which drove the stock price down and triggered panic selling.
Ladder Attacks with the help of Dark Pools - Another identified method of ladder attacks was identified to come from crosstrading with darkpools (the stock market has its own private stock exchange where institutions can trade…). Essentially darkpools are private stock markets retail investors do not have access to, where short side funds can purchase securities “off market” and then sell “on-market”, with the effect of creating a lot more downward pressure on the market without the upward pressure from buying.
Illegally masking shorts with synthetic longs. Another tactic shorts are suspected of using in GME is the use of illegally using options to evade short positions in violation of Reg SHO which SEC describes in this risk alert and which I elaborate in this post. Essentially it’s the use of using options to create synthetic longs to illegally and artificially cover and prolong short positions and at same time obscuring the true short interest %. If you consider that it would be far more profitable for shorts to not cover at high prices but instead ladder attack the price and wait for retail investors to lose interest and close their shorts at as low of a price as possible, then you can see why this strategy would be very effective.
Using way out-of-money call options to obscure true short interest. You may have heard about the 43 million worth of 800 dollar calls purchased when the price was 100 and found it odd. Later it was identified as a tactic to cheaply purchase synthetic call options (since at 800 its way out of money) to obscure their short positions (with the added benefit of hedging at 800 if a squeeze does happen)
One thing I want to note, particularly to legislators at the GameStop hearing: Retail investors were not incited to pump GME. Retail investors spotted a unique Short Squeeze opportunity created by the greed of short side hedge funds, whereby GameStop was being abusively naked shorted with the goal of bringing it to bankruptcy, and hedge funds were so greedy about it that they shorted the company with a short interest of 226% of float, meaning A LOT of counterfeit shares were being used to short the company. Retail investors saw this as an opportunity to short squeeze the hedge fund shorters, which is a legal and legitimate investment strategy. The short squeeze would have happened had everyone played fair, but instead, financial institutions who were culpable to the naked shorting intervened and shut down retail buying, hurting the retail investors and successfully manipulating the market. The investment itself was in my opinion a sound decision based on the short squeeze, but in hindsight retail investors did not seriously consider the risk of the market would be blatantly and publicly manipulated and that the market would be rigged against them.
If this post was useful (and I hope it was! Gave up my Friday night to write this for you Apes), please upvote for visibility and share it far and wide. The GameStop hearings could be a first step and hope towards legislative change, and it’s extremely important that the right story is told at those hearings (and by the right story I mean the real truth of what happened.) I hope the truly culpable parties are investigated and brought to justice. Again, I know many of us feel cynical that anything meaning will be done towards finding justice against the lawbreakers in this case, but if you feel even an ounce of injustice or empathy at how retail investors were unfairly harmed in the course of investing in GME, I strongly urge you to contact a legislator associated with the GameStop hearings and bring this to their attention so they can review this case with more complete information. In addition I recommend you to contact the SEC and any journalist you know or via journalist tip lines. It’s not going to be easy but the more awareness we raise the higher the likelihood our voices will be heard and positive change will be made.
As we navigate the rocky waters ahead, I’ll gift you with a favorite quote of mine:
The only difference between a nightmare and a dream is how big your balls are.
🚀🚀🚀
Disclaimer: I am not an investment advisor, I just like the stock.
Ps. If you’ve read to the end, I’ll leave you with a few more thoughts and reminders:
- If I were to distill life into one thing, it would be to never lose hope.
- Remember that if you’ve lost money in any way shape or form, don’t be depressed, money can always be made back and the important thing is to maintain a good attitude.
- Only invest what you can afford to lose.
- Perhaps the most important factor in good investing is patience.
If you’d like to read more about counterfeiting stocks this is a good place to start http://counterfeitingstock.com/CS2.0/CounterfeitingStock.html

TLDR: Following the recent DOGE and XRP situations, and our influx of new users - I have decided to put together a quick guide on what a pump and dump is, how to spot it, how to avoid it, and what to do should you fall for one. This is just my thoughts on the issue and by no means exhaustive. I welcome comments and my biggest recommendation if you fell for one of these schemes is to accept it, address your emotions, seek support - either by those around you or here if you feel more comfortable, then commit to educating yourself.
 

Summary:

A pump and dump scheme is where a group of people pitch a coin (or stock) to other people to spike short term volume, and therefore the price, in order to profit from selling their own supply at the higher price to the newer investors.
 
How to spot a PnD:

• Promises of huge gains
  
• Forced short time frames to make a decision
  
• No discussion of risk - or questioning permitted
  
• The opportunity finds you, you don't find the opportunity
  
• Comparison to recent success stories - e.g. GME (dubious whether this will even be a success long term for individuals)
  

  Tips to avoid - see below but the main two for me are:

• Recognise emotional decision making, in yourself, and when it comes from others (people you may normally trust). You need to recognise this behaviour, and cut it out at source. To step back and breathe.
  
• Ask yourself, what are they selling me on, and why? If they find you, you are being sold. That is all there is to it.
  

 
 

What is a Pump and Dump scheme?

  A Pump and Dump scheme (PnD from here on in), is where an investor, or group of investors promote a coin they already hold (or are purchasing) in order to cause positive sentiment and the price to rise. At this point these investors will then sell their coins to the newer investors, causing the price to crash and leave the people who fell for the PnD with a large potential loss, or coins which are now worth a lot less than the price they paid for them.
These are not new and were traditionally done via phone call. If you have watched the Wolf of Wall Street, or similar films about penny stocks, you have seen this stuff in action. If you are buying, you are the retail investor who gets taken for a ride.
With the recent influx of new users to this site, and following the PnD schemes surrounding Doge and XRP, lets take a look at how to spot a PnD scheme
 

How to spot a PnD scheme?

 

• Promises of huge gains, in a short amount of time. If it sounds too good to be true, it is. In crypto (and stocks) if someone is talking to you about something, they are selling you their position. If it is positive - they likely own it, if it negative - they either want prices to fall or they hold a competitor. Ask yourself, why someone would be going out their way to tell you something is a once in a lifetime opportunity? If it was, they would be keeping it secret and accumulating themselves. These people are salesman, and you are the one buying the bullshit
  
• Linked to the above there is often a time element - 'get in quick, or you will miss it', they are relying on your impulsive decision making to jump in - they are manipulating you to over ride the logical part of your brain which makes decisions based on information and context
  
• There is no discussion of any potential risks or downsides, and you are removed from groups or harassed for asking basic questions - this is a hive mind at work, and you are being censored from raising any concern or legitimate question.
  
• There may be reference to 'how this time is different', or it plays on recent successes which are in no way comparable - e.g Game Stop - anyone who paused for a second would realise why not only was financially the short squeeze on GME completely different, but also the moral stand point was too. XRP, for example, is a centralised system which enriches the founders beyond belief. Yet these groups tried to ride the sentiment of GME to convince others to join - as a show of rebellion and alliance.
  
• Social media storms are cooked up, it seems like out of nowhere this is all anyone can talk about - when has this ever proven a successful decision? Once everyone is talking about it, you are already too late. You may not lose money, if you are lucky, but you are still the one being duped. Again this is feeding on emotion and Fear of Missing Out. There will be groups created and ran by mods who run them like cults - no talk of anything but price going up is accepted.
  
• There is a time or plan attached - e.g. Pump and Hold at 8:30. For the love of god, if this is the case, sell before then. All the leaders of these groups will have done. All of these public announcements are done again to create legitimacy and make you feel at ease - as a collective.
  
• Generally any concept of 'we are in this together', coming from a group trying to actively push up the price of something short term = PnD. You are not in this together, markets are competitive - they are survival of the fittest whether you like it or not. They want your money, when you listen to them - you are basically offering to hand it over. People invest to make money, especially when the entire premise is pushing a price up to get rich. They do not want what is good for you, they are using you and they will take your money if you allow them to. They are telling you, because you are the opportunity - not the coin.
  
• Be aware, people telling you to hold and buy more, are using you. They want you to push the price back up so they can sell. If you are in these groups - on social media, be aware you may be talking to bots, or at the least people who are trying to dump on you. When it drops, get out.
  

 
 

How to avoid PnDs in future

 

• 'Why are they telling me this?' - this is the first and main question to ask yourself. What does the person sharing the information have to gain from telling me? In this case - you invest and push the price up, allowing them to make greater profit. Understand why they would be sharing details with you - if it such a great thing, why are they sharing it?
  
• if it is a friend telling you, ask for more information - why it is doing well, what the plan is etc - if they can't explain it properly, this is a big red flag and they likely have fallen for it too.
  
• Look out for how someone talks to you about it - is it emotionally driven, does it make you excited? scared to miss out? - This is exactly when you need to step back, breathe and ask yourself if you are thinking correctly. Emotional decision making is not a good thing here, and then ask if they are intentionally trying to get an emotional reaction out of you? (see the above - FOMO, get rich quick etc)
  
• Is there any room for nuance? Are you able to discuss the potential cons or risk? If you are laughed at, or harassed, others are told to ignore you (he won't be getting rich, weak hands, pathetic seller) - this is a huge sign that you are investing in something where no other thoughts are allowed. The reason for this, once you are out the bubble - logic returns and you see the smoke and mirrors for what they are. PnD groups work like a cult, only one form of thinking is allowed, everything else is censored.
  
• Did this come out of nowhere, do I even know anything about this? If you don't know anything about it, except it makes money, don't invest in it. This is a terrible decision for two reasons. Firstly, and most obviously, you have asymmetric information - you have no idea why and what you are buying, therefore can't make an informed decision - only an emotional one. Equally, this kind of thing pushes panicked, emotional selling. When you don't know fundamental reasons why you invest in something, when the price dips you will sell. Why? because when your brain asks you the question 'shit it is dropping, what do we do?!' - your logical brain won't have an answer, because you never gave it the information to form one. This second part is more relevant to regular investments, not PnDs of course, but is worth bearing in mind before you invest in anything.
  
• Was the coin relatively stagnant, or has it dipped recently? PnDs typically target coins which haven't moved much recently, or have lower trading volume, this allows for a much easier spiking of the price due to a small change in demand equalling a big change in price. If you look at the charts and it was doing nothing until this big flurry of activity - you are being taken for a ride.
  
• Look for the news, if it is pumping, don't listen to people inside the group - search for reasons why something is pumping. If you can't find anything of value, there probably isn't anything, and you are gambling on emotional decisions.
  
• The opportunity finds you, you don't find the opportunity. Getting rich off 'undervalued' coins, or finding a hidden gem is not easy. They are hidden for a reason. If someone is coming to you with this, remember they are selling. You are buying.
  
• If someone does approach you, talk to someone else outside of the bubble - find another group e.g. CC, or other investors - talk to them, get outside perspective before investing.
  
• look for examples of populist sentiment. Do you hear things about an other? - e.g. haters, those missing out who are jealous. Are you made to feel like you are part of a special group? The ones with insider information? This is a lie, it is very very common manipulation within populist movements, cults etc - to create a narrative of an other to entrench tribalism within the group. This is done to make you switch your brain off, to rule on emotion.
  
• is there a recent comparable story that was successful? e.g. GME (yes this isn't the same at all in reality, but the story being sold is - or at least plays on the hype of GME). If there is, you are being played. The real opportunity, just like the hidden gem, is the first one. When people tell you this is happening again, they are simply using the positive news from one case and applying it to their own - often because it lacks any actual, real, tangible reason for succeeding or being a good investment.
  

 
 

I fell for a PnD, what next?

 
Have you sold yet - No? Are you in profit? Sell. Whilst you still can. Greed will tell you not to, and perhaps you can eek out a little more money. But you are gambling, and gambling extremely high risk against people trying to take all your money.
 
Yes, you have sold. Did you make a profit? Yes - great. You are still a an idiot, just a lucky one. Tell yourself that. There is a difference between opportunist traders taking advantage of PnDs and someone getting lucky and getting out before it collapses. Do not confuse the two. The first group know what they are doing (and they may still lose, but they are aware of the real risk). You are fucking lucky. Don't do it again. So count your blessings, go through the same process of learning about PnDs and begin to understand why you fell for it, how to avoid it in future and realise you are up - you won. Don't go back in, you are asking to lose.
 
Yes you have sold? Did you make profit? No? Ok, this is normal - 90% + of people doing this will end up in the same situation.
 

• Recognise and accept your mistake. Do not feel ashamed of it, it is ok. You were played, it happens to all of us in our lives at some point.
  
• Step away from whatever device you used to invest. DO NOT ATTEMPT TO WIN IT BACK RIGHT AWAY. You will most likely make things worse, investing again on emotions - even worse emotions now, shame, anger, disbelief.
  
• Talk to the important people in your life if you feel comfortable, if not, come here or to other anonymous groups for support. It is important to share what happened, to vent emotionally whatever it is you feel.
  
• Realise it is only money, even if gambled way more than you should have done, long term you will get out of this. Focus on other areas of your life for the time being - emotional investment, fulfilment and development - seek out things which may centre to your emotions again, whatever that may be - getting out in nature, cooking, reading, adrenaline sports - whatever the shit you need, do it.
  
• Consider who, if anyone needs to know. Did you borrow from you and your wife's joint account? Accept a loan from a mate? These people need to know the truth. Do not hide it and hope to win it back. Tell the truth. They deserve it.
  
• Do not repeat the same actions, if you want to win long term from this - you need a different approach. Step away from the high stakes casino and figure out long term strategies to make money.
  
• Learn to diversify and manage risk. You are taking a huge gamble going all in on something - even if it isn't a scam, you need to protect yourself through diversifying your investments. Get rich quick schemes are the fastest way to lose money.
  
• Educate yourself on these behaviours - I would recommend 'Thinking Fast and Slow' by Daniel Kahnemann as a personal favourite. This book helps to look at and address the biases that make up our emotional decision making, and learn how to recognise these and instead 'think slow'. You won't regret reading it.