Corona Del Mar, CA
Howdy Chris!
I recently watched the movie "Dumb Money" so you don't have to.
It's about the Meme stock craze...specifically Gamestop.
It don't think it checked enough of the "woke" boxes.
It's also very boring.
One thing it did was take me back to 2021 when some friends and guys at the gym were talking about "sticking it to the man."
I told them about the Clearinghouse, and how they wouldn't be able to corner the market much longer before intervention.
That's exactly what happened.
I was just stoked because people finally realized Robinhood is effectively a division of Citadel.
In other words, they are there to skim from everyday traders using payment for order flow (PFOF). It's a hidden tax on the naive.
One thing the movie did get right is to show how emotional everyday traders are. That's why they're referred to as "dumb money."
If a person's argument for getting into a stock was emotional, you're not going to get him to sell based on logic.
Nothing demonstrates this better than the "non-reportables" in the E-mini S&P 500.
These are folks that trade less than 1,000 contracts.
In aggregate, you can take the opposite side of their trades and make a nice return.
Currently, these traders are a bit extended on the long side, and the Smart Money strategy went into long-term bonds a few weeks ago.
Believe it or not, bonds have out-performed the S&P 500 since then (+9%).
TLT was up an additional 1.77% on Wednesday.
The good 'ol Smart Money strategy is now up 30% for the year.
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