The real Gamestop are the thoughts we shared along the way.
There's a lot to be said about the unprecedented nature of a subreddit screwing with multi-billion dollar hedge-funds. There is however little being said about what our thoughts on this say about us.
It’s been a joy witnessing what the “revolt” at r/WallStreetBets has accomplished. There are many interpretations of the larger consequences of this Subreddit’s conquest. It has been described as a populist force against the Wall Street elite. For others, it’s the inevitable singularity many had hoped would wake everyone up to the reality and necessity of decentralized systems; Defi even more so— that is, if the de-platforming of DJT hadn’t proved so to others already. For some yet—even those who find themselves of the same class of people targetted—all of this is a sign that change is necessary; that the financial elite is for once forced to stare at themselves in infinite mirrors.
I had a different sort of pleasure.
Sure I enjoyed watching a community I lurked on for months pull off something as spectacular as this. But even more so did I like watching how various people of differing backgrounds and perspectives reacted.
All this has been presented to the masses as a populist movement to “stick it to the man”, which it is. But I felt this to be too simple. There was much more going on but I struggled to verbalize it. I struggled to verbalize the mechanism through which r/WallStreetBets gained mass appeal.
“Game Stop”—the event, not the retailer— has been a tale of network effects, the concept of influence and confirmation bias, and the power of platforms.
I seek to attempt to clarify both to myself and to all of you what I see.
The more the merrier.
Things are always more fun when they are done with other like-minded people. A perspective possessed by just one about the potential to gain from the shorts of one hedge-fund—a perspective rebuked by many—would eventually become a social movement wide-ranging in its potential to alter not just the US financial system but the global one too.
Now, whether the movement so far has been potent in damaging all of Wall Street is debatable. Despite several hedge funds falling in this battle, there are the mighty that have proven antifragile. This, however, doesn’t discount the heavy losses on the side of funds affected.
u/DeepFuckingValue spurned what may have been the most vital financial movement in ages. It woke people up to the mechanisms of a financial system they thought far more complicated not too long ago. It may yet still be complicated, but the perception that the average person— and it is but mere perception, not completely true— is capable of moving markets is an appealing narrative. It pulls people in. It says, “you too, can make a difference by hurting corrupt financial institutions… and guess what! You may just get rich in the process!”
It started with him(u/DeepFuckingValue) being proven right on a bet made on what is a nearly defunct retail game store. That mere act of “being right”, despite the odds, earned him a following. This following, lit aflame by a renewed interest in Gamestop by those that “like the stock” and those who hoped to further short it, is what has led to the force that is r/WSB in moving the financial market at scale.
To many the fact that a profanity-laden subreddit could be so influential is striking. But those who’ve kept up with the subreddit, however, have long since observed the sense of community that abides there. Through shitposting, they’ve also been able to hide the collective intelligence that resides within.
The best piece I’ve come across on r/WSB and its rising influence has been this one titled Everything’s a joke until It’s Not. It tries to make sense of why Reddit and 4chan have been so influential in general with an emphasis on the now-banned r/The_Donald subreddit and more recently the vibrant r/WSB. In the article John Herrman writes:
Users of both The_Donald and WallStreetBets acknowledge a debt to 4chan (WallStreetBets’ tagline: “Like 4chan found a Bloomberg terminal”). This debt to the infamous message board that delights in chaos is stylistic but also functional: to always seem like you might be joking, well beyond the point at which you should be taken seriously, is to guard yourself against accurate interpretation and evaluation.
It also provides something like deniability within the community itself. In communities like this, for which actual community formation is beside the point, Ms. Swartz said, “it’s hard to trace everyone else’s intentions.” (One of the leaders of the WallStreetBets GameStop campaign was revealed by Reuters to be a chartered financial analyst from Massachusetts.) By the time power and influence is actually consolidated, motivations aren’t really relevant anyway. This is the moment the joke becomes real. The moment that the subreddit emerges to the general public, fully formed and startlingly confident, its workshopped performance visible to the rest of the world. This is when the voices speak up: Is this a joke? It seems like it’s really … happening? And to some: Let’s see where this goes. Why not?
While I think that the quote above gets the general picture, it very much misses the point that communities aren’t built around “community building”. Communities despite the power mechanisms that evolve come about due to a shared interest. In this environment—which is very much cultlike—knowledge is grown. This specialized sometimes obfuscated knowledge (at least to the many that don’t speak shitpoast), seems arcane.
Look at the Pythagoreans for example, whose discoveries and obsession with numbers laid the basis for what is a lot of our geometry. But a list of their other more… crazy beliefs and practices seem… absurd to say the least.
So too did this formerly “fringe” community of autists and degens (r/WSB that is)manage to upend even experts’ views of a system they felt they fully grasped.
When all is said and done, the general public was presented a technical story; one few understood. They looked to find out more the best way they knew how to; by looking at what everyone else was saying. Some would understand, others would only gain a slight understanding. But many would join.
I am reminded of a quote by Robert Cialdini in his book “Influence”:
The greater the number of people who find any idea correct, the more the idea will be correct .
People “bandwagonned” because it felt right to do so. And because stonks were going up, because someone(Elon) whom many young look up to as a source of wisdom, endorsed the movement, because people like knowing about trends, people hopped on.
I’d gotten fed up with seeing Mimetic Theory being discussed everywhere. But in this instance, Girard’s words ring more true than ever. I will as such invoke them here:
He says:
“Man is the creature who does not know what to desire, and he turns to others in order to make up his mind. We desire what others desire because we imitate their desires.”
This, I guess has been an integral part of the story behind the subreddit’s 3 million follower increase.
FOMO.
Confirmation Bias Everywhere.
This discrepancy in understanding reveals itself in the way many seem to internalize the Game Stop.
Is it a political movement? Well, for some it is. But it’s worth noting that the only reason this movement may have gained a higher purpose is due to the perception of power they had gained, not prior to it. In other words, r/WSB as nihilistic as it is or was, with its singular quest for “tendies”, had little purpose besides gains and losses.
Whatever moral aspirations have been ascribed by its members(many latecomers) and several ideological commentators, has very little to do with what has been taking place.
But it’s easier to root for something when you see yourself in it. Even if one does not fully comprehend the nature of a “short squeeze” or the technicalities that may result in one (a rarity indeed, one many newcomers will believe to be easily replicable), one can always ascribe the value of a movement to themselves because it:
Enhances their social position.
Makes them feel less bad about their ignorance of what’s going on.
Allows them to validate and remain consistent about deeply held ideological positions.
At the end of the day, many who felt themselves to be counter-cultural despite having no clue what was going on saw themselves in the place of the Redditors.
Robinhood
The most underrated part of this story, reveals itself in the power of platforms. A lot of social progress is made by thinking less about complicated stuff. The mechanisms that manage to make processes easier for most gain widespread adoption.
Robinhood, now a villain in the story due to what could be viewed as an unforced error(CEO lied about the liquidity issues it faced), facilitated unprecedented trading volume. All this through a mere app that gamified speculation.
Platforms like Robinhood, those that democratize access to things that may have been viewed at one point as tools of the elite, will become more common. As they do so, we may see a lot of backlash from professionals who may have once viewed themselves in a position of infallibility.
It isn’t merely "AI taking jobs away” although automated systems displacing knowledge workers is a part of the story as well. It’s knowledge systems and heuristics that once defined high paying specialist jobs being made accessible to the average person.
The internet kickstarted this revolution, and it very well may see it to a disruptive close.
The world we live in is becoming more absurd as time passes.
It’s hard not to feel as if we’re inching towards a more fictional world. It’s very much starting to feel like the absurd is the new normal. It’s all anime-like; movie-like; you call it what you will! But we’re heading there. I can’t tell if this is a bad sign. Maybe merely a sign that our collective perception of the world has shifted? That maybe we’re fine with collectively losing our sanity? For a lot of us, the lockdowns might very well have done so.
But despite the volatility of it all, it can’t be denied that there’s a certain element of fun to it all. Perhaps, that’s what makes all of this so fascinating. In many ways, r/WallStreetBets being the “beacon of the resistance” is a live depiction of our descent into a collective mania. But there’s a genius in mania. Only time will tell to what extent this genius reveals itself.
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