How I think the Gamestop Stock Mania Started

[kernals12]

[Rothman]

Erm.  That's not close at all.

[thspfc]

This madness shows how powerful social media companies are becoming, and Reddit in particular because of the dynamic of being able to easily find a large group of like-minded people to discuss with.

[kernals12]

This madness shows how powerful social media companies are becoming, and Reddit in particular because of the dynamic of being able to easily find a large group of like-minded people to discuss with.

Are you suggesting we form an investment pool?

[Rothman]

This madness shows how powerful social media companies are becoming, and Reddit in particular because of the dynamic of being able to easily find a large group of like-minded people to discuss with.

Are you suggesting we form an investment pool?

Yes!

[Max Rockatansky]

Gamestop is still around?

[SectorZ]

Gamestop is still around?

Not only around but apparently thriving!

[kernals12]

A lot of retail investors who buy late in the bubble are going to get hosed.

[kernals12]

Or, maybe the owners of one of the hedge funds that was shorting Gamestop played a cruel trick on one of their employees and to get revenge, they decided to start a short squeeze

 

[kernals12]

This isn't the first time the stock market has seemed to lose all connection to reality. Let me tell you about The Conglomerates


In the 60s, a bunch of companies decided to start recklessly buying whatever unrelated firms they could get their hands on. ITT, a telephone holding company, decided to buy Avis Rent-A-Car, Sheraton Hotels, Continental Baking (makers of Wonderbread), Rayonier timber, Levitt and Co. Homebuilders, and the Hartford insurance company. Ling-Temco-Vought bought Braniff Airlines, National Car Rental, Wilson Co (meat packing, pharmaceuticals, and sporting goods), and Okonite electrical cables. And there were others, like Textron, Litton, Teledyne, and Gulf and Western. For a while, the stock market rewarded these acquisitions, being convinced that 2+2 could equal 5, even though there was no logical reason for companies to go into these unrelated fields. But eventually they saw through it. Stock prices for all these companies collapsed and they would spend the 70s and 80s divesting their holdings and many of them wound up bankrupt.

But there is one exception; Berkshire Hathaway. In the 60s, it was a failing textile manufacturer, but Warren Buffett turned it into a gigacorporation that owns everything from BNSF railroads to Geico insurance to Dairy Queen.

[Scott5114]

tradephoric, is that you?

[kphoger]

tradephoric, is that you?

Someone had to ask.