Over the past several months, there has been an influx of so called moonbois within reddit,
stocktwits, the YouTube comments, and basically every other medium of online communication.
For the first time in history, bad news is good news.
In fact, the worse the news, the better.
Is a company accused of fraud?
It’s time to buy.
Is a company massively shorted and in a dying industry?
It’s time to buy.
Is a company or a crypto a popular meme?
Well, you know the deal, it’s time to buy the dip and take this trash to the moon.
The worst part is that recent market conditions have rewarded such behavior prompting these
individuals to continuously gamble their gains on quote on quote the next short squeeze or
the next doge coin.
And honestly, if they don’t take profits and stop while they can, they’re portfolio
is going to end up being the next bitconnect.
So, here’s the appallingly toxic culture of moonbois.
Before we get started, I wanted to make it clear that I agree that hedge funds and market
makers are evil.
They manipulate markets, they manipulate news, and they manipulate emotions.
Really, there’s nothing that they don’t manipulate.
But, yoloing one’s entire money on a nameless penny stock or altcoin is not the solution.
In fact, you’re probably increasing the likelihood of handing over everything to the
big bois and here’s why.
First of all, moonbois are cherry picking favorable results.
Gamestop was a magnificent short squeeze.
People who got in early and took profits were often able to profit hundreds of thousands
if not millions of dollars.
But GameStop was a 1 in 10 million or a 1 in 100 million outcome.
You could argue that Tesla’s run up was also a massive short squeeze, but there were
many more factors hyping up Tesla’s run than a simple technical short squeeze.
Really, the last time a spectacular short squeeze happened was with Volkswagen way back
in 2008.
And, no retail investors were really involved in that short squeeze.
But, you don’t even have to look that far to understand the low probability of such
a short squeeze.
Gamestop is one of the most popular events of 2021.
Even people who have never invested in their entire life have heard about the gamestop
story.
Considering this, don’t you think hedge funds and market makers who work on wall street
all day every day know about it as well?
Wouldn’t it make sense that they would be far more careful now that they took a massive
loss.
I mean, it sounds like common sense, yet we see new short squeeze opportunities posted
on reddit and stocktwits on a daily basis.
Whether that be Microvision or Nikola or Blink or AMC.
Basically any stock that’s down 70 or 80% and has a massive short interest is a new
short squeeze target.
I mean if you want to throw 1 or 2% of your portfolio into one of these companies just
for the fun of it.
Go right ahead.
But, moonbois are often taking out lines of credit on their homes, maxing out their credit
cards, and throwing everything they have on some pipe dream short squeeze.
The worst part though is that they often convince new and naive investors who have no idea what’s
happening to do the exact same thing.
Is it going to work for someone?
Yes.
But someone is also always going to win the lottery.
Anyway, moving away from short squeeze moonbois, we have altcoin moonbois.
Here, it’s basically the same thing, but even worse.
Instead of pointing to gamestop, altcoin moonbois point to dogecoin.
They claim that worthless altcoins like safemoon coin and shiba coin and deeznuts coin are
going to the moon.
And yes, there’s actually an altcoin called deeznuts coin.
The reason altcoin moonbois are even worse is that the only people they’re screwing
over are their peers.
With short squeezes, the people who are hurt the most are also usually just retailers who
got in late.
But, there’s atleast a chance that hedge funds and market makers could get hurt.
With these nameless altcoins though, the only person getting hurt is retailers, as no institution
is going to touch these worthless pieces of garbage.
With altcoins, scummy individuals are literally running pump and dumps in broad daylight.
Are there naive moonbois involved in these schemes that don’t know exactly what they’re
doing?
Probably.
But the people at the top of these pyramids know exactly what they’re doing.
All they’re doing is hyping up coins to inflate the price, so that they can dump at
the top.
I mean this is literally what the Wolf of Wall Street did with penny stocks and it landed
him 2 years in federal prison.
The altcoin ponzi leaders are straight up committing fraud and theft in broad daylight,
but since cryptocurrencies aren’t regulated, they can get away with it.
It’s really quite disgusting.
Aside from selling pipedreams to new investors, moonbois are constantly normailizng ludicrous
losses on reddit and stocktwits.
We’re talking 70 80 even 90% losses.
And it’s not like they put in $100 and lost $80.
No, these guys put in hundreds of thousands of dollars and then often lose hundreds of
thousands.
Take a look at this wallstreetbets poster, he lost $212,000.
This guy lost $95,000.
And this guy lost $589,000.
On WallStreetBets and stocktwits, these aren’t warnings to stay away or stories of people
learning their lessons.
No, these are proud battle scars.
Most of these gamblers think that they’re a brave soldier holding the line and that
they’re going to be rewarded massively when the short squeeze finally begins.
In the future, they think that this loss will be a funny story that they can laugh about.
Maybe in a year they can post a new story that's like, Oh yeah, I was down half a mil
last year, but now, I’m up 10 mil.
In reality though, the only thing that's gonna be funny at the end of the day is their final
account value after they blew a 100% because of pure stupidity.
I feel bad for people who randomly get screwed out of nowhere, but these guys, man, they’re
just asking for it.
They take pride in holding massive bags and having what they call diamond hands.
Diamond hands are awesome if you invested into a fundamentally strong company that’s
vastly undervalued.
But these guys are buying into pure hype and are hoping that things get even more heated.
Sometimes, this strategy even works, but instead of taking profits along the way they end up
losing most of their gains.
This poster for instance started from $10,000 and skyrocketed all the way to $1.6 million.
He could’ve taken profits right then and there, but he ended up riding it down to $250,000.
Granted, he did still 25x his money, but that’s still such a sad story.
Imagine if he just sold 10% of his position for every $100k he made.
Or what if he just put a stop loss at $1 million.
If you’re so confident in your thesis, putting in a stop loss wouldn’t matter right?
The stop loss should theoretically never hit.
But, on the off chance it did hit, you would guarantee yourself $1 million pre tax.
Unfortunately though, that would be classified as having paper hands and that’s a big no
no amongst these communities.
Risk management and smart trading tactics are for losers, here, it’s either ride or
die with diamond hands.
Not only do these communities encourage people to not sell until some fairytale number is
reached, but they also promote infinitely buying the dip.
Again, buying the dip is a great strategy when you’re investing into fundamentally
sound companies like Amazon or Apple.
But, moonbois aren’t buying dips, they’re buying crashes and falling knives.
There’s always some random hype that gets circulated amongst these communities that’s
gonna be game changing for the asset.
You might hear that the institutions are trying to buy your shares at cheap prices or that
they’re trying to shake out the weak hands and that the pump is just around the corner.
Check out this gambler for instance.
His thesis is that the IV or implied volatility of Gamestop options is under 100%.
The company also has earnings and a shareholder meeting coming soon.
So, this user decided to go ahead and buy nearly a $100k worth of $950 call options
on Gamestop.
For those of you who aren’t familiar with call options, this position basically means
that this user is betting $100k that Gamsetop will be above $950 per share by January of
2023.
At least, he bought something with 1.5 years to play out, but man talk about risk management.
Now, none of this is anything new.
People have been using the stock market as a casino for decades at this point.
But with the success of Gamestop and Dogecoin, more regular people are falling into this
trap than ever before.
These people simply don’t understand the risks of investing into short squeeze stocks
and hype cryptos.
They’re being sold a fantasy from moonbois who either don’t understand the risk themselves
or they’re braindead gamblers.
And unfortunately, the vast majority of these individuals will end up losing everything.
Anyone who tries to argue against these moonbois or anyone who even tries to simply outline
the risks of such activities are labeled as gay bears.
There’s gonna be comments down below that I’m paid by hedge funds to spread fear,
uncertainty, and doubt and that I’m a tool for big money.
But in reality, the real tool for big money is moon bois.
And that brings me into my last point which is that there is no larger mission.
Oftentimes, wall street betters and moon bois think that they’re doing something super
noble by taking down big money and helping the little guy win.
Even with gamestop, the little guy didn’t win.
Sure, some retailers won, but retail investors as a whole did not win by any means.
Moonbois were super excited that the hedge fund melvin capital lost 53% of their portfolio
in January.
But, what people don’t mention is that melvin capital gained 20% the very next month, and
at that rate, they’ll probably be green by the end of the year.
Now, you might be saying that Robinhood and the other brokerages came to their rescue,
and that they would’ve gone under if it wasn’t for interference.
But even if Melvin capital and citron research went bankrupt, who cares?
That’s just a handful of hedge funds, and hedge funds would’ve still won the gamestop
fiasco even if GameStop went to the moon and hit $2000 or $3000 per share.
Here’s the thing, hedge funds don’t just short stocks, they also buy stocks just like
retailers.
In fact, the four largest asset managers in the world own a total of 39% of Gamestop.
Aside from these hedge funds who already owned gamestop, dozens of hedge funds got in and
got out of gamestop just like you.
And they made a lot lot more.
Even DFV, who is likely the retailer that benefited the most, only made 30 or maybe
$40 million at the peak which is of course insane.
But, a hedge fund named Senvest management that decided to jump into the Gamestop frenzy
ended up pocketing $700 million.
If Robinhood didn’t shut down gamestop stock buying, not only would retailers have made
millions more, but hedge funds on the right side of the trade would have made billions
more.
So, it’s really not as noble of a fight as you might think.
At the end of the day, the stock and crypto markets have skyrocketed over the past year.
The PE ratio of the S&P 500 would suggest that we’re actually at dotcom bubble levels
right now.
This massive speculation across the stock market has allowed a group of moonbois on
reddit, stocktwits, and youtube to make unprecedented returns within a very short period of time.
This short term victory has led them to believe that they can replicate these results over
and over again adding a zero to their portfolio with each subsequent win.
But, sooner or later the house of cards will crumble and most of them will lose everything
just like every other euphoric event in history.
So, be sure that you’re not the one that's diamond handing to 0.
What do you guys think about moonbois?
Comment that down below.
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