Hedge Funds Crying to the bank!
It's been a crazy old week in the markets and GameStop has been a rallying cry for small traders all around the world. With dozens of networks being set up globally on social media chat sites to coordinate the buying and selling of shares. Watchdogs in both the US and UK said they were monitoring activity and potential lawbreaking, and warned traders they risked facing huge losses.
On the other side of the fence we have the Hedge Funds. Those people we all love to hate who make rich people richer and through their behaviour (e.g. the huge shorting of GameStop stock) kill businesses and thereby kill employment for people to earn a decent living wage.
The behaviour in this current scenario has to be seen to be believed. On the back of big losses being incurred by hedge funds due to the coordinated buying of shares by retail investors some platforms stopped the purchasing of said shares, Robinhood being one. In addition some social media networks such as Facebook stopped retail trader groups from communicating with each other. When media businesses take the law (or their interpretation of it) into their own hands, we should all start to worry.
Now at Inteligex we're simple people but we can't help feeling that there is a bit of hypocrisy at play here. We always thought that hedge funds were 'live by the sword, die by the sword' kind of guys. In fact if you look up what hedge fund means it has a key word in it: 'speculation'.
So just for fun I looked up the dictionary definition of speculation and it says 'investment in stocks, property, etc. in the hope of gain but with the risk of loss'. Now that little phrase 'risk of loss' is something us Retail Traders are all very familiar with but it seems not so the big boys. At the first whiff of big losses they cry market manipulation! Apparently it's ok for us small time traders to lose because 'that's just the market' but when the rich kids lose something must be wrong with the market and something needs to be done!!
It's clear that this will run and run and who am I to speculate on what the outcome(s) will be.
All I know is that, to quote the famous words of Corporal Jones in Dad's Army. Those Hedge Funds
".... they don't like it up em!"
