🧵Finance is better understood through the lens of psychology and history
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🧵Finance is better understood through the lens of psychology and history
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🧵1/ When you visit my post, you will read about the impact of grief, the GameStop stock saga, and the role of emotions and psychology in finance. It begins by highlighting how grief can either positively or negatively affect a person and references King Solomon's belief that sorrow sharpens understanding.
🧵2/ The story then shifts to Keith Gill, who used his period of grief after losing his sister during the pandemic to invest in GameStop stocks. The post unfolds with Gill's initial investment decision, despite skepticism from Wall Street players, and the reasons behind his investment in GameStop stocks.
🧵3/ It emphasizes the emotional and personal motivations of retail traders, contrasting them with the profit-driven mindset of hedge funds. The post recounts the short squeeze orchestrated by retail traders, causing losses for hedge funds like Melvin Capital, led by Gabe Plotkin.
🧵4/ The post also discusses the bailout of Melvin Capital by Citadel and others, leading to panic among some traders and attempts to manipulate the market by shutting down Reddit communities and restricting trading platforms like Robinhood.
🧵5/ It touches on the centralization of power in financial markets and the repercussions faced by individuals like Keith Gill in their professional lives due to their involvement in the GameStop saga.
🧵6/ Ultimately, my post concludes with the victory of retail traders who held onto their positions, highlighting the psychological and historical aspects of finance over purely mathematical ones, as advocated by Morgan Housel.
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Finance is better understood through the lens of psychology and history