My Experience at Citadel & Analysis of the GameStop Short | Reddit WallStreetBets vs Melvin Capital 

Thanks, yeah, these stories are like bundles of issues, so it doesn't really make sense to me to give a blanket "this is good" or "this is bad" opinion without breaking it apart.

Yeah, that's completely reasonable. My message definitely isn't "don't be poor" though lol. My message is, I don't think this particular strategy is going to work very well. Everyone is celebrating that Melvin is down 50%, but Citadel went down 50% in 2008 and bounced back very quickly. My point is that I don't think Reddit based short squeezes will be an effective way to reduce wealth inequality. But at the same time, I completely understand that the options for meaningful action are extremely limited. There certainly wasn't anyone in the 2020 Presidential race who was materially putting these people first, so the government seems unlikely to solve the issue. The big risk here is that retail traders wind up being net losers here. Like what if DeepFuckingValue makes $25 million, everyone else loses a billion collectively. That would actually be a setback for the less fortunate. I want to avoid a situation where people are goading retail traders into making risky bets where hedge funds are the only people who will profit.

Yeah, but it wasn't rocket science. When your boss isn't doing anything you'd want to do, and your boss's boss isn't doing anything you'd want to do, the writing is on the wall. Would have been different if they had placed me in a quant track immediately, but I was legitimately underqualified for that. No amount of hustle will get someone to trust you with quant trading strategies if you don't have the right experience.

Thanks a lot, appreciate the feedback. Glad to hear that the explanation of short selling was clear, it's a bit complex and counterintuitive. I'm really glad that I waited to give a more balanced take, I'm already seeing articles that are reframing the story and a lot of those rushed opinions from last week are starting to look pretty silly.

There is a general argument that these are the tools that give otherwise independent individuals a monetary incentive to "play detective" and really find out what an enterprise is worth. But moving it back to the antagonism: Even if the purpose for shorting can be argued as such, it's not clear that such a market function needs to be taken over by hedge funds that are billions worth and go on to exponentially amass capital due to the capital they already have.

@@NikolajKuntner Yeah. It doesn't make sense to be able to short 140% of a company's stock.

@@prakash_77 Yeah and over-leverage can cause cascading financial collapse as we saw with Long Term Capital Management. There definitely need to be limits on short-selling activity. The uptick rule is a reasonable method for stoping downward spirals, and having mandated collateral levels makes a ton of sense. Shorting more than 100% should also probably be disallowed, although I don't know if anyone is going to try that again after this incident!

So glad you like it! Definitely let me know if you find any other videos on my channel particularly interesting (or boring for that matter). I’m still trying to figure out what themes are most enjoyable. Thanks for subscribing!

If you followed it at the time, many people on wsb thought that they could put Citadel out of business by aggressively trading GME. That has already been proven false and we’ll see what Citadel’s results look like in a few years. I’m not saying the hedge funds made a good trade here, I’m just saying this isn’t the end of hedge funds. This will be hard to replicate.

This is an interesting question. Is going 138% short immoral or just stupid. This feels like a case of "never attribute to malice what can be explained by stupidity" - Melvin Capital made a huge mistake and got crushed for it. The market actually solved this issue as it should, GameStop didn't go out of business because WallStreetBets figured out that they could make money by pushing back against the short pressure.

@@JohnCooganPlus Short seller were trying to get GameStop out of business, Redditor's and others wanted to squeeze Melvin but in the middle of Squeeze, Melvin got saved by Robinhood ban on buy side.

@@BidurPrasadShiwakoti07 I’m genuinely curious here. Do you have an example of a non-fraudulent business going bankrupt due to short pressure? I couldn’t find any examples of that, but if you have an example that would definitely change my position.

@@JohnCooganPlus This is the article doing the rounds on WSB and hackernews, he quotes "1000s" company going bust but no source.

@@Halkin85 I don't think RU-vid lets you attach links, can you give me the article title so I can search it on HN. Really want to read this.

Yeah, that’s a fair assessment. These are just market dynamics playing out as they should for the most part. Some people win, some people lose. This story was like a big upset victory, but the season still continues.

Awesome to hear that. I have a lot more content coming this year, hoping to just get a bit better every week.

@@JohnCooganPlus Love to hear that. I’ll be watching. I think covering tech/financial stories the way you do is very intriguing. I love the in-depth, behind the scenes look of what’s really going on. Amazing work man

@@Davld1996 yeah, I don’t want to be a breaking news channel, since it takes me time to form an opinion and collect all the facts, but I think this type of analysis is kind of missing from the current media landscape. Hoping it grows this year!

@@JohnCooganPlus make a video on GPT-3!

@@Davld1996 that’s a good idea. I mentioned in my video about Reddit, but a full video could be good. I don’t know if my beta account is still live. I’ll take a look.

It’s been pretty crazy how solid the support for GameStop has been. The shorts closed their position a long time ago though, so I don’t think the short squeeze narrative is still holding. Will be interesting to see if the management team can deliver some solid growth to justify the valuation. I really like the team, but they are still losing lots of money.

@@JohnCooganPlus yeah? then why is short interest close to 20% and utilization at 100%? Shorts have not closed; they want us to believe that. And the amt of shorted shared are self reported by the hedgies to finra so the real number is way higher. The game being played is that they are waiting for us to lose interest, to go away so they can short this thing to the ground but we aren't letting that happen. MOASS is coming sooner or later.

You and me both!

Would it be helpful if I trimmed down the intro stuff in the future?

@@JohnCooganPlus Different guy but I personally liked the intro

@@Halkin85 Yeah, I feel like a happy medium would be to add chapter markers to make it easier to skip around. It's totally reasonable to want to cut to a single core argument quickly.

@@JohnCooganPlus 100% and even verbally stating that it is marked. Fairly common youtuber etiquette. Really enjoyed the vid, I hope you keep on uploading.