How do we give something a value? I used to believe this was based off the "function" or problem it solved. Something that made life convenient was more valuable than something that caused problems. Technology simplifies things so it's valuable? That depends on who you're talking to. If you asked my 90 year old grandmother she may say technology is worthless, because it's a big challenge for her. I like to get my news from the internet, but her and my grandfather read the daily newspaper.
Wall Street Saga
My perspective of value changed during this recent stock market saga. WallStreetBets, the Reddit group was able to form a rebellion against massive hedge funds that were actually profiting off companies goes bankrupt. This is just unreal, I can't believe this is an investment strategy and I feel sorry for the United States for allowing these such investments.
What I saw during this fiasco, was that value was not based on "dollars" it was based on "success". The price of Gamestock, was around $12 when it started. These hedge funds were shorting the stock, meaning they would profit off a decrease in price. When the millions of retail investors started buying the stock, its value skyrocketed up to highs of $400. The hedge funds lost billions as they had to purchase stocks at retail value to cover their shorts.
Money Was Finally Flowing From The Rich To The Poor
The higher the price went, the more the hedge funds lost. This was a perfect "stick it to the man" moment. Hedge funds were buying these shares from retail investors for FAR over their value to minimize losses. The retail investors continued to hold their shares, just pushing the price up further.
The mindset of these investors was not about the money they would make, it was about the money the hedge funds would loose. I talked to multiple owners of GME stock who said they would loose everything before they sold. The only way the hedge funds could win was if people sold. The funds were desperate for the price to drop.
Retail Investors Were Cheated
It became clear that this movement was more than just Gamestock. Numerous other stocks, such as Nokia, Blockbuster, Blackberry and AMC all heavily shorted stocks were experiencing unprecedented rallies. Each fund that was shorting these stocks was faced with enormous losses, in the billions.
In an attempt to minimize loss, multiple trading platforms halted trading. The biggest name in this was Robinhood, the platform utilized by most retail investors. By taking away the ability to purchase stock, people began to panic and prices dropped. In this moment, hedge funds were able to cover their shorts at a fraction of the losses. This was a dirty game but exposed problems in the financial market.
When We All Join Together Anything Is Possible
What many people may not realize but should be proud of is that fact that millions of individuals were able to beat the wealthy. When we all join together toward a common goal, anything is possible. Retail investors were able to take money from the largest hedge funds, worth billions.
My faith in society was restored. I realized that the government doesn't have my back, the people I entrusted with my money are out to profit from me. The people I should be supporting are my neighbors, the "little guy" and the average person. All of us can do anything that we put out minds to.