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horizon. And if you start investing early enough in life, my God, it’s all you gotta do.” See, it’s hard not to be at least a little inspired... GAMESTOP: A STORY THAT SELLS Talk to enough people about WallStreetBets and the Great GameStop Squeeze of 2021, and they won’t all agree... but you’re going to get the sense that something somewhere has definitely been democratized. If it’s not the democratization of investing we’re seeing, and if we shouldn’t be too quick to celebrate the democratization of speculation, we might look to the democratization of manipulation as a revealing trend. “Of course, there has always been manipulation,” says economist David Hirshleifer, a finance professor at University of California Irvine. “But often manipulation is a very secretive thing of a few players trying to move the price and avoid being detected so that they won’t be prosecuted.” (Put Caddyshack aside for a moment... and recall the plot of 1983’s Trading Places , wherein the brothers Randolph and Mortimer Duke attempt insider trading to corner the frozen orange juice market, an example of the old-fashioned secretive style of manipulation to which Hirshleifer refers to.) “One thing that’s different about this bubble is the idea of explicitly coordinating among very small investors and saying, let’s all buy at the same time,” Hirshleifer says. “Mass movement for price manipulation is something that has become much easier with modern social media or Reddit threads.” What’s not new, he adds, is this generation’s
that really made a lot of money on GameStop were professional investors.” It’s also misleading to say that apps like Robinhood, Johnson points out, “democratize investing.” He says, “What they really democratize is speculation.” The type of trading these apps encourage will only compound a generationally endemic view of investing as akin to gambling... because the type of trading these apps promote is akin to gambling. “The miracle of compound interest only works if you have a long time horizon. And unfortunately, people get themselves into so much trouble early in life that they’re trying to dig themselves out,” Johnson says, bemoaning the fate of the trigger-happy WallStreetBets brigade. The type of trading these apps encourage will only compound a generationally endemic view of investing as akin to gambling... because the type of trading these apps promote is akin to gambling. “The miracle of compound interest only works if you have a long time horizon. Hoping I can cheer him up, I tell Johnson about Shawn Daumer, who idolizes his fellow Omahan Warren Buffett. And though the media lumps him in with them, he has little use for Reddit – and I think it works… “That kid that you’re talking about in Indiana is perfect,” Johnson says. “Perfect! He didn’t even go to college so he’s got a long-time
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