[Stocks] Hot Potato: My Take on the GameStop Phenomenon

They say a beginner driver is the scariest thing on the road.. As I've been studying stocks,
my personal thoughts and impressions about the GameStop story seem to diverge a bit from what most media and experts are saying, so I want to jot them down—loosely—and think back on them.

Personally, when I look at the GameStop issues, my first thought was "what's actually the problem here?"

Imagine, for example, "a certain group" with about ten million won.
One day they made a rule that lets you bet on "future" value even though the "present" isn't there. And they made that bet on a pay-later basis. They had more money than anyone else in the market, but they wanted to slice risk into even smaller pieces. In this game, if your prediction is wrong you lose, and if it's right you win. Whenever their prediction looked like it would lose, they'd sometimes buy or sell more at the last moment of the game to tune the prediction and raise their win rate.

Their rules—the so-called rules of the stock market—and the referees' guidance shaped how individuals moved, and individuals lost almost every time. Some learn their valuation methods, some try to read their buying and selling and tag along, some listen closely to their "consensus" and occasionally taste a small win.

At some point, the grassroots individuals holding a few hundred or a few thousand won, ten thousand won—those who kept losing most of their games—started sharing their opinions with each other through online communities and social channels.
Of course they don't know each other's identities, and none of their mentions have any binding force. These individual grievances and non-contractual declarations (remarks, opinions) have been shared over a long time. Then at some point.. the responses (or the rallying together) of this unspecified crowd started to get "almost collective" agreement. They actually started to exert influence in the market.
And recently something unbelievable happened. The win rate of these "occasional, irregular, informal individual groupings" that had started winning only "a handful of times" shot up exponentially, and as a result, the regulars who had been running the game started to seriously stagger.

In the GameStop incident, the staggering regulars' thrashing was kind of baffling (though to them maybe these are the normal rules), but from the perspective of an individual who is a candidate of a candidate of an irregular, it was deeply disappointing.
To avoid losing, they flailed—jumping into fire and water, country by country—buying and selling.
On top of that, watching the referees so casually blame and control individual trading.. I could clearly see the commonsense and values they "actually react with and act on" when a crisis hits, not the ones they "talk about".

So the cause of this incident? The turbulence in the global stock market, I read it as: not a consensus and collective action by unspecified individuals, but rather an event where a lazy whale, startled, thrashes around and crushes countless shrimp backs in the process.

I'm a personal fan and an avid listener of Samprotv, and among the YouTube content by Lee Hyo-seok who appears on that channel, there's an analogy comparing economists, democrats, and investors.
Borrowing that analogy—individuals simply didn't resist the market or blame its rules; they adapted as "investors" and overcame their disadvantageous situation using their own tools. If anything, wasn't this situation caused by the hedge funds' complacent thought or attitude that "of course this was a game they should have won again"?

Many media outlets and market experts express concern, and often describe it as irrational exuberance, herd mentality, speculation, or chaos. Those worries.. maybe they come from an elitist judgment.
How rational, really, is the evaluation of "future" value for a stock that experts look at and judge? And how rational is the "consensus" of those "experts"?
We can't deny that most of today's capitalist market is a product of "specific organizations" with power (money) pushing, over a long time (until competitors wither), using their capital.
And the quantitative numbers and rational indicators most experts talk about are, in effect, a way to "rationally" predict and judge the market based on the intensity of that pushing, the competitive structure of those pushing, and the common sense of this world that "if you push, you win in the end."

For instance, on a macro level there's probably the competitive structure or the relationships between national currencies and interest rates, and on a micro level, I think of Coupang, which is reportedly about to list in the US. Coupang didn't die because of Big Brother's power—personally, I think "couldn't die" is closer.
Of course this isn't just Coupang's issue. Most startups after 2010—most services that have survived today—were able to exterminate their competitors thanks to wealthy investors' money logic, despite long years of losses, and as a result could produce outcomes that matched the experts' "consensus" mentioned above. Did they really grow only on future value? If that sounds too negative, just search Google for a venture capital map and you'll see. That investor is that investor, and that company is that subsidiary.

On the other hand, I wonder if the "consensus" of the unspecified individuals (the ones who are the main consumers in the real market) gathered in irregular (by experts' standards) communities is being judged too irrational and impulsive.

If you strip away the elitist judgment and just look at this phenomenon through the stock market's own rules, it's a confrontation between a powerful group with lots of money and an irregular group of unspecified many with or without money.
I don't understand why this situation is being judged as foul play and irrational behavior.

Some say the harm to individuals from sharp rises and falls is actually severe. But.. wasn't that always worse when it was caused by wealthy groups (institutions or hedge funds)?
Before GameStop, in the continuing recent plunges, how did they behave? They kept selling intentionally for their own profit realization, even more than the future value they themselves had cited. And they'd absolve themselves, saying as an individual part of the organization, they had no choice. If you add up all the losses individuals absorbed over the years for the profit realization of those powerful groups.. the hedge funds' losses from the recent GameStop event look pretty modest, don't they?

Personally, I think this phenomenon is something that can and should happen.
And I think it will be re-evaluated before long.

The most fundamental cause shaking the stock market recently (including, of course, the Donghak–Seohak retail movement that started last year)
is, I think, that the new normal has started to apply to the stock market too.

Recently?.. For a long time now, ordinary individuals have been making and selling products directly.
There was a time when the keyword "social commerce" (though in Korea it was turned by money-rich Big Brothers into group-buy / hot-deal coupons) became a worldwide trend.
And through group buying, communities, and social channels, they sometimes exert influence in the real market. Individuals use various channels like YouTube, sometimes wielding more influence than broadcasters, sometimes more than the companies they belong to.

Today's phenomenon is just that familiar wind
finally starting to blow in the stock market too, I think..