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Simon Wardley Profile picture
@swardley
Jan 27, 2021 • 63 tweets • 18 min read • Read on X
#Reddit invents the trickle down economy with #GameStop and now the talk is all about regulation. Apparently wealth is supposed to only flow one way whilst promises of future breadcrumbs flows the other.
Looking at what's happening - - I suspect that regulation will happen faster than you can say "where's my stimulus check?" ... nothing moves the legal system faster than the wealthy losing their favourite game of "steal from the poor to feed the rich".
"amateurs","upstarts", "frenzy", "vigilante", "herd" versus "professional" ... go on @BBCNews, tell us what you really think.

I'm suprised the article didn't start with "uppity little oiks forget their place and their betters" - bbc.co.uk/news/business-…
X : Hedge funds losing out, fair enough. But ...
Me : That pain the hedge funds are feeling are others gain. Yes, the price will eventually fall but this is not about investment strategy, this is about the crooked game that is the market.
Typo in the title, ftfy ... "The SEC can take steps right now to curb the day-trading frenzy and help safeguard the investing wealthy" - bloomberg.com/opinion/articl…
#Reddit might have broken capitalism but I'm sure the SEC will step in soon enough to get things "working" again ... always remember the golden rule - money trickles uphill but shit trickles down. I'm sure they'll have to find a few people to arrest for being uppity oiks.
Oh, the fascinating games going on the side, the companies involved ... Gamestop just keeps giving -
Fabulous -> Investor Chamath Palihapitiya: The GameStop story is pushback against Wall Street establishment - (H/T @TripKrant)
Two of the themes that have come up in my research, from healthcare to defence, from Government to finance have been ...

1. SWARMING (of people and machines)

16. MOBILISATION (of people and resources)



GameStop is just the beginning. So exciting.
I have to say a big thank you to @jacquitaylorfb for opening my eyes to the true extent and power of the change.
There are so many battles coming towards us, so many fascinating spaces e.g. hydrogen (the old guards replacement for oil) vs battery (electric) ... so many players, vested interests, pre-existing capital and sources of inertia.
I've got petroleum companies investing in solar to enable hydrogen to continue using existing capital for distribution with energy companies using solar pushing for batteries to enable more effective balancing on the spot market.
Hmmmm ...
Discord bans the r/WallStreetBets server - theverge.com/2021/1/27/2225… ... oh, I think we're about to launch into Streisand effect territory.
"Recalibrate their positions" ... looking after the big wall street hedge funds in the name of protecting the small retail investor? Bailouts and legislation must surely follow as the game obviously wasn't rigged enough -
... I must try that in my next game of poker ... now that I know your hand, I would like to stop the game and "recalibrate my position" in the pot.
I did like the quote "the robust investment activity wasn’t rational” ... thought I'm not sure if this was talking about #Reddit users or the shorting of 140% of the float of a company by Wall St?

I assume it's talking Wall St because ... well, that's not rational at all.
So, my two questions are

1) "Recalibrate their positions" sounds like a euphemism for "get someone else to pay the bill". So who will they try to get to pay the bill?
2) What has happened is a real threat to existing systems, so they're going to need to destroy the collective around that #Reddit group. Which translates to persuading everyone else that those users were really awful people. So what's the line of attack?
X : Russian hackers?
Me : Really? The whole #Reddit group was some growing active measures plot to destablise the economy ... hmmm ... well, PR firms can work wonders. I'm sure they're busy crafting a narrative and building artificial collectives to pump it.
X : Why destroy the collective?
Me : Imagine if it grows? You could end up with 50 million retail investors each with $5k of capital that are actually talking to each other and creating a shared understanding. That could be terrible, the market might actually start functioning.
X : functioning?
Me : Our market system "as is" runs on power laws primarily controlled by three things - luck, inheritance (starting privilege) and ROCE being proportional to C (i,e. the more you have, the better returns you get). This "open source" hedge fund threatens that.
Excellent article, alas they'll be working on how to fix the game again -> GameStop's dizzying share price rise is game over for the short-sellers - theguardian.com/business/nils-…
X : I don't get why this "collective" is so dangerous.
Me : To the established system, to the crooked game ... you don't understand why the system will try to legislate, destroy and restore itself? Let the #Reddit crowd explain in its own words -
If you looking at GameStop and thinking "this is just a get quick rich scheme" then you're missing the wider motivations for what is happening. This is the public saying "we're sick of this, we've had enough, we're getting organised and we don't care".
Think about this. You're a CEO playing a game of sweat and acquire i.e. purchase a distressed asset to "synergise" (i.e. fire ordinary people) to give share buybacks / divs to keep the price & your bonus up. Wall St loves you but suddenly 50M retail investors don't ...
... and then you discover that they don't care about the $100 or $200 or $300 that they're going to lose, they just care you fired a lot of ordinary people and they want to see you pay.

Oh, we're in for fun times.
Make it larger and well ... a hundred million peoples pocket money will change the fortunes and actions of huge global companies - ... this is why GameStop should be celebrated and supported by Gov. It is amazing.
Forget CSR reports, that lip service paid to doing good ... let this run, let the public express its feelings. You'll get more change, more action at a corporate level from this than any new tickbox.
X : Hate speech?
Me : Not seen details but be warned - PR firms will be amplifying narrative using sockpuppets and artificial collectives to paint this group as anarchists or get rich quick or anything to destablise it. They won't be promoting this -
X : Why do you think this is happening?
Me : Take a huge group of people that have learned lessons on how to act collectively (i.e. MMORPG), give them the tools to do so (reddit / discord), industrialise components in banking (Robinhood) and then give them a reason (2008).
More balanced reporting by @BBCNews, this is encouraging. Maybe the PR firms are losing the battle as well.

"The solution is more transparency on the institutional side, not less access for retail."

-> Amateur investors continue to outwit Wall Street - bbc.co.uk/news/business-…
Of course, when I read the quote "This isn't investing, this is gambling" I can't help but translate that in my mind to "This isn't gambling where people I know win but gambling where people I know lose" ... well, that's the point, it's all about certain funds losing.
X : Do you think they will win?
Me : Who are you talking about? The existing structures will try and cut off information, try to stop people sharing and try to close off platforms enabling this. The "free" market is a tool, you need to always ask ... whose need is it serving?
Well, this will now explode and good - ... if anyone couldn't see how rigged the market was beforehand, there is no avoiding it now.

It's about to become Gov (of the people) vs Hedge funds (and a crooked market).
X : Have you seen @tedcruz -
Me : Yep. Battle line is clear, anyone claiming to represent the people is on one side - it doesn't matter whether it's DNC or GOP. To rig a market in favour of institutions that are losing, in public view ... not a good idea.
Streisand effect ... here we go.
Today, we found out that a free market is only "free" when money is flowing in the right direction.
Robinhood hit with class action lawsuit - engadget.com/robinhood-clas…
"People on Wall Street only care about the rules when they’re the ones getting hurt. American workers have known for years the Wall Street system is broken" - independent.co.uk/news/world/ame…
I'm surprised Biden has been fairly silent on how retail investors (ordinary public) have been treated and I can't imagine Sequioa Capital is happy given Robinhood's mission to "democratize finance for all" ... I can imagine Vlad is going to face some tough questions.
Back to "Amatuers", "manipulation", "illegal actions", "people stuck at home", "inexperienced investors" ... oh, the big concern for Wall St was the little person? Is that the narrative now? @BBCNews - bbc.co.uk/news/business-… ...
... surely the definition of market manipulation is when you tell one type of investor that you can buy and sell but another type of investor that you can only sell.

The committee hearings should be fascinating -
I see the Reddit group is back up and all the talk seems to be of ... holding. The short interest must be hurting these funds.

It is really important that Government doesn't step in and bailout the funds with taxpayers money. Let it play ...
... however "Robinhood CEO Vlad Tenev, 33 defended firm's decision to sell users' shares without permission" - dailymail.co.uk/news/article-9…

Are we kidding? Respect for property is one of the few universal values. This is way beyond market manipulation, Vlad should be heading to jail.
Not comfortable with the comparison to Trump, there's a world of difference between respect for property and manipulation of the people. But then it's the dailyfail, so I don't expect a great deal of thought to be applied. However, the accusation is astonishing.
Wow, barely covers it ...


This undermines trust entirely. The idea that a party can sell your shares without your permission. I have never seen anything like this.

Those committee hearings on banking should rightly be a bloodbath.
X : Margin account?
Me : I thought RobinHood was all margin accounts. Hence margin calls because you're borrowing. I understand liquidating a position because of an inability to meet a margin call but ... that's not what this seems to say.
If a firm can liquidate your position regardless of your ability to meet a margin call and without permission then the system can suspend ability to buy, drip feed lower prices and liquidate large numbers against their will ... that's not a market, that's a scam.
Good -> SEC’s pledge to clamp down on brokerages that may have “unduly” limited customers’ ability to trade - cnbc.com/2021/01/29/sec…
X : Do you think price will drop?
Me : I cannot speak to money. I can only speak to intent. Some holding GME have been doing so to punish hedge funds who shorted. For those, it's not about getting rich but restitution. This rise of retail investor activism is beyond money ...
... what is interesting is both the rise of this form of collective action plus the regulation questions that seem to have started.

This is something that seems very new -
... and yes, this form of retail investor activism could impact the corporate world particularly on questions like environment and ethics. We've seen this collective form of action and mobilisation emerge in different areas from Masks4All to a shift from WhatsApp to Signal.
X : Have you seen that [loathsome person] agrees with you?
Me : As my grandfather used to tell me - "Even Hitler loved dogs" ... in other words, you sometimes have common ground with people that are truly repulsive. Just remember why they're repulsive and do not support them.
As I said, industrialisation of collaboration tools (Reddit / Twitter) + industrialisation of banking components (RobinHood) + intent + a lot of people used to working with others on WoW ... this line is perfect ->
... and this is just the start.
In MSM, "Redditors set their sights on silver" -
cnn.com/2021/01/31/inv…
and theguardian.com/business/2021/…
and
investorschronicle.co.uk/news/2021/02/0…
etc etc

Whilst on Reddit / WSB the talk is "Silver Squeeze is a hedge-fund coordinated attack so they can keep fighting the $GME fight"
X : How organised is the whole Reddit thing?
Me : From what I can see, it isn't. It's like a raid, a whole bunch of people turn up with one intent. Anything giving the resemblance of "organisation" emerges out of the collective sharing with each other - think flock of starlings.
X : Flock of starlings?
Me : Yep. There isn't a head bird and layers of management of birds. There are just simple rules the collective shares. It has an intent. When you look at it, you "perceive" structure but that structrure isn't there. It's the same ...
... with the whole Reddit / GME thing. If you want structure / collusion then I'd personally be looking at the hedge funds and all the action being taken against Reddit / GME. That's where I suspect you'll find layers of management co-ordinating action.
X : How do swarms work together or at least appear to work together?
Me : Trust is critical. Which is why any attacks on the Reddit / GME collective will probably focus on that i.e. creating an idea of being a ponzi or nefarious forces in charge or saying people are cashing in.
X : So WallStreetBets is like a murmuration?
Me : Absolutely. We used to think these birds had psyhic powers - phys.org/news/2019-02-s… ... not so. Local interaction, trust between members and basic rules is all you need for complex patterns to emerge ...
... if you're looking for collusion between some management structure then I suspect you're looking in the wrong place.
X : Thoughts on $GME
Me : Fascinating. The rise of the retail investor, the focus on intent, the industrialisation of collaboration tools and banking components, the murmuration of structure ... it's an amazing case study and points to an interesting future.

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More from @swardley

Simon Wardley Profile picture
Dec 1
X : What is the deep state?
Me : Depends. You have various conspiracy theory forms and then there's the general term used to describe networks of power operating outside traditional democratic processes. This includes the influence of corporate interests, financial bodies, think tanks, wealthy individuals, lobbysts firms and institutions on government policy. Why?
X : Is Trump going to war on the deep state?
Me : I suspect you'll find that Trump brings his own corporate interests, financial bodies, think tanks, wealthy individuals, lobbysts firms and institutions that will have influence on government policy outside of the normal democratic process.
X : What does that mean?
Me : It means the deep state doesn't usually go away, it just changes i.e. a different group have influence. Unless Trump is planning on a radical program of transparency. Now, that would be interesting. Never seen Trump as a transparency champion.
Read 18 tweets
Simon Wardley Profile picture
Nov 30
X : Did you research healthcare investment?
Me : Back in 2023. A group of clinicians mapped multiple perspective of healthcare - including AI, clinical decision making, healthcare value chain - then we used those to determine where to invest from a societal and market benefit. Image
Me : ... from the table, if your focus is on society then your priority for investment should be measurement of health outcomes (against Patient Reported Outcome Measures) and sharing of medical data. If you're after market growth then try personalised medicine and preventative healthcare.
X : How do you produce those tables?
Me : Pick a field ... like healthcare. Ideally get 40-60 people together with experience i.e. clinicians. Ask them to write down post-it notes of what matters ... Image
Read 11 tweets
Simon Wardley Profile picture
Nov 29
X : What is the most essential skill for AI in the future?
Me : Critical thinking in humans. Alas, we don't usually teach this at school because we're too focused on producing useful economic units.
X : Useful economic units?
Me : Turning humans into automatons for the workplace.
X : Do you have evidence for this.
Me : I took a group of educational consultants, academics and teachers in 2023 and mapped out education from multiple perspectives ... purpose, micro-credentials, asynchronous & synchronous learning, learning models, social learning ...
... we then used the maps to identify where to invest for both societal and market benefit. We then aggregated the results, into the table attached.

If your focus in on societal benefit, then invest in lifelong learning and critical thinking. If your focus is on making money then invest in educational AI and digital access.Image
Read 26 tweets
Simon Wardley Profile picture
Nov 7
It amazes me that the most important metrics (lines of code, story points, cycle time, devex satisfaction) in development are the two that are never discussed, let alone measured ... mean time to answer (mttA) and mean time to question (mttQ).
Whenever we start with building a system or managing a legacy environment, we need to ask questions and get answers. Those are skills which can be hindered or supported by the toolset around you ...
... in the very worst cases, engineers are forced into reading code to try and understand a system. Upto 50% of development time can be spent on reading code ... a process we never question or optimise. That is madness.
Read 13 tweets
Simon Wardley Profile picture
Sep 26
X : Thoughts on a return to office policy?
Me : It happens for two basic reasons:-
1) loss of status symbols (top floor office etc). Many execs need these to say "I'm the boss"
2) headcount reduction (i.e. people will leave) due to a weakness in the finances.

Why?
X : What about productivity and innovation?
Me : Those are "reasons" given but they're all bogus and don't stand up to scrutiny. However, there is a third.
X : Colloboration?
Me : Stranded assets - offices etc. No exec likes looking at an empty building they spent £300M on.
X : Basically - status symbols, weaknesses of finances and political capital?
Me : Sounds about right.
X : Did you see Amazon has a return to office policy -
Me : Oh. That's concerning.geekwire.com/2024/survey-by…
Read 11 tweets
Simon Wardley Profile picture
Sep 9
X : Our strategy doesn't align with our business.
Me : How do you mean?
X : We create these strategy documents but they never really get implemented as the day to day business takes over.
Me : That's common. Can I ask a question?
X : Sure
Me : ...
Me : Do you map?
X : I've heard of your technique but we don't use it.
Me : Ok, so your business operations is not based upon a map of the landscape?
X : No
Me : And your strategy is not based upon a map of the landscape?
X : No
Me : What made you think they would align?
X : They are supposed to align and we wrote our strategy on our understanding of the business.
Me : Your wrote your strategy based upon stories. There's no means to create a consensus of your landscape, to challenge what your are doing. There is no mechanism for alignment.
Read 10 tweets

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