Let’s Talk About the GameStop Short Squeeze

Focusing on the Bigger Picture and Why It Matters

The news has been filled with stories about GameStop and other stocks with high “short” interests being squeezed in recent weeks so there is no point in me rehashing the specifics. There is a lot I could cover about the actual procedure for how trades settle, how short squeezes happen, who is innocent and guilty, and a host of other relevant topics. Enough ink has been spilled, digital and print, that I’m going to focus on the bigger picture, instead.

Before We Begin, Some Context Surrounding GameStop

GameStop shares opened the first trading session of the year on January 4th, 2021 at $19.00 per share.

Most informed observers seemed to believe the fair value was probably no higher than $20 per share and in fact, probably sat materially lower than even that figure. (Personally, I wouldn’t have paid anything for the business as I think it was a money drain destined for insolvency given technological, demographic, and retail trends couple with what I viewed as a number of poor decisions by management. There are several other, more profitable enterprises at more attractive valuations I would prefer to own.)

Something unusual happened. I’m going to somewhat oversimplify but it basically comes down to this: A bunch of hedge funds – an entity known as Melvin Capital being the most notable – got greedy and shorted the stock to the point that the short interest exceeded 100% of the available float. Spotting this unique mathematical lottery ticket, a small group of traders banded together to aggressively purchase shares on the open market while purposely refusing to sell those same shares. The intention and hope of this coordinated action was to drive up the price of GameStop so quickly, and so dramatically, that the hedge funds experienced a bloodbath on their short positions, forcing them to step into the market, buy back the stock at ridiculously inflated and non-justifiable prices, and thus stop the hemorrhaging. In doing so, the traders believed they could create a zero-sum outcome where they effectively bankrupted the hedge funds and made off with all of the capital the hedge funds’ clients had invested in those partnerships.

This worked as planned up to a point. The stock started to skyrocket and the hedge funds experienced large losses. The rapidity of GameStop’s rise caught the attention and imagination of inexperienced retail traders who piled into the trade, increasingly at prices far above what the original traders paid for their shares. This created a speculative feedback loop where people who had no real money to spare, and no experience, were buying GameStop shares and refusing to sell because they believed they could drive the stock to almost any price – $1,000 per share, $10,000 per share, $100,000 per share – not realizing that several practical upper limits could come into play through any number of means (some of which I will discuss later). More and more people, driven by a fear of missing out, ignorance of how the system fits together, a desire to hurt the hedge funds, and/or unrestrained avarice, bought shares like crazy. A speculative bubble formed. The stock reached an intra-day high of $483.00 per share last Thursday before collapsing more than 81% to $89.48 in Tuesday’s after-hours trading session, as I write these words. No one knows the actual outstanding short value, anymore, so it’s possible the short squeeze is over or that it hasn’t fully happened, yet. More clarity won’t be known until February 9th when certain disclosures are due.

In the same way the U.S. military scrambles fighter jets to shoot down rogue passenger planes, killing the folks on board despite having done nothing wrong in order to protect people on the ground, there now exists a handful of scenarios in which the economic equivalent could be deployed in the capital markets. This means the hedge funds, the retail traders buying the stock, GameStop itself, and/or any combination thereof could suffer permanent or complete capital impairment. There is no way to predict with any certainty how the situation ends.

Now, everyone from Congress to Federal and state securities regulators are considering intervention. The primary reason: If the hedge funds were to go bankrupt – which, frankly, they deserve and I don’t think the public will lose much sleep over it as their lack of risk controls is inexcusable – any losses beyond that point could accrue to the prime broker and, beyond that point, to the clearing house, having all sorts of nasty unintended consequences for innocent people who had nothing to do with any of this. In the same way the U.S. military scrambles fighter jets to shoot down rogue passenger planes, killing the folks on board despite having done nothing wrong in order to protect people on the ground, there now exists a handful of scenarios in which the economic equivalent could be deployed in the capital markets. This means the hedge funds, the retail traders buying the stock, GameStop itself, and/or any combination thereof could suffer permanent or complete capital impairment. There is no way to predict with any certainty how the situation ends.

This Is Not a Revolution and In the Long-Run It Will Change Nothing

What is happening with GameStop is not a revolution.

It is not a movement.

It is not some event that will be seen as a seminal moment in the history of capital markets.

It is nothing more than the modern-day manifestation of the old email chains or Yahoo! Finance message boards that existed back at the turn of the century causing an insignificant blip in an insignificant stock that will be forgotten for most people a year from now unless the regulators just completely screw up and allow it to spiral into a systemwide cascading failure. If that happens, that – the regulatory failure – will be what is remembered but it doesn’t need to occur as we’re still early enough in this it can be fixed.

People who think it is anything more are deluding themselves. True, it may lead to modest regulatory reforms around the edges, and, I hope, it will cause institutions to be more frightened about taking on extremely risky positions (at least for awhile as such restraint never seems to last) but in the long-term data series for equities as a whole, this will be noise for all but a handful of people whom either:

1. Got in early and managed to hit the eject button before it resolves itself, essentially forcing a confiscation of assets from the investors of the hedge funds that caused this mess in the first place, or;
2. Show up to the party late, thinking they are in the first group only to discover to their horror that they were the patsies holding the bag after much smarter and/or luckier traders bailed.

What I find insufferable is that the level of media coverage and emotional energy this thing has received, especially for people who can’t even read a cash flow statement or who don’t know the difference between a 10-K and a 13F filing, is deranged.

Think of Most New GameStop Stock Buyers as Falling Into Three Categories

Philosophically, I view the people trying to take advantage of the GameStop short squeeze as falling into three categories.

Category Number 1: The cold-hearted, well-capitalized, logical traders (as opposed to investors). They understand the rules of the game. They know what they are getting into and what this entails. They manage their position exposures. They are honest with themselves about their motivations. They don’t care about the businesses, they simply want to win by exploiting a weak competitor. This isn’t investing, it’s a speculative pirate raid by one band of pirates against another band of pirates with most of the smart money getting in early and having already taken some capital off the table so that not only is their original outlay recouped but the profits are meaningful. Even if the rest of the gamble goes to zero, many, but not all, still came out ahead. Fine. Although it’s not my style, it’s much less tax efficient, and I view it as an inferior way to build meaningful long-term wealth consistently, not to mention that I don’t want to behave that way, I have no issue with, nor criticism of, those men and women who go into it eyes open willing to accept the consequences. (Although I should just say “men” as there is an enormous body of evidence that this kind of stupidity in the capital markets is almost entirely and exclusively concentrated in the accounts of males. Women tend to make much better long-term, patient investors and, as a group, tend to be a lot less likely to fall into a bet-the-farm trap. There are all kinds of theories as to why this exists – evolutionary biology, socialization and culture – but it is absolutely a force that matters. It is one of the reasons that mid-size and larger companies with a mix of men and women on their boards tend to be more stable, and suffer less implosion, than competitors that are made up entirely of men. Individual exceptions exist, of course. We’re talking about group-level behavior.)

Category Number 2: The people who have taken care of what they need and then, and only then, run a small, isolated, carefully-contained speculation fund that is a rounding error to their net worth. We have several clients at Kennon-Green & Co. for whom we manage millions of dollars in fully-paid, long-term portfolios consisting of value investments, who do this. They fully fund their 401(k)s each year. They maximize their backdoor Roth IRA contributions via non-deductible Traditional IRAs. They own their houses outright. They earn a lot of money and are constantly running surpluses, expanding their ownership of wonderful businesses. They avoid credit card debt. Quarter after quarter, year after year, they dump fresh cash into the accounts we manage for them so we can go out and build their “endowment”, so to speak. Yet, they have a small speculative side account that has nothing to do with us, and into which they put a fixed amount of money each year (they will never fund beyond that hard limit to avoid “irrational escalation” of losses). They also don’t allow themselves exposure to unlimited risk by insisting upon some form of hedge against lower probability events (e.g., if they short a stock, they buy an out-of-the-money call on those same shares so the maximum theoretical loss can be calculated at all times). They know the speculative fund can, and probably will, go to zero. As importantly, if they do hit a once-in-a-lifetime windfall, they have a maximum limit to the size of the speculative account that they will tolerate so that anything beyond that gets moved into their “real” portfolio of blue chip stocks the same way a smart winner at a casino walks out the door rather than gambling with his jackpot. For them, they find these side bets intellectually interesting and view it as a form of entertainment. The specifics differ by person – some prefer to make bets on biotech or pharmaceutical companies burning through huge amounts of cash in the pursuit of miracle drugs and therapies, some gamble in energy or technology markets – but it’s ultimately trivial compared to their overall financial picture. The point is, they can afford it and it brings them joy. Benjamin Graham himself, the father of value investing, did this from time to time.

Category Number 3: Smaller, inexperienced savers with little to no capital market experience. For these people, this is what moral evil looks like. This entire situation is manufacturing sin. It is amplifying unrestrained greed and avarice. It is creating unbearable fear of missing out for those not strong enough to avoid succumbing to the temptation of the siren call of speculation. People will suffer. Some of them will be good men and women who worked hard all of their life and simply have a wiring deficiency in their neurology when it comes to risk-adjusted return calculations; people who are risking sums of money that are meaningful to them and their families despite the fact that, up until a few days ago, they didn’t even know what the Depository Trust & Clearing Corporation (DTCC) is! The DTCC! You know, one of the most important institutions on planet Earth which cleared $2 quadrillion of U.S. dollar equivalent trades – yes, quadrillion – in 2019 alone! If a person doesn’t know what the DTCC is, how trades settle including capital requirements of broker-dealers, or what stock option Gamma is, they are playing a game they are neither equipped to win nor understand. The best they can hope for is a windfall provided by pure, dumb luck.

I mean, when a broker-dealer like Robinhood suffered a margin call by the clearing house, these folks thought it was some grand conspiracy theory because they had no idea how the basic plumbing of the market worked! What do you do with that level of ignorance? It is a well-known fact that broker-dealers can be bankrupted by growth-fueled liquidity shortages. Knowing history matters. Back in the 1960s, numerous brokers went bankrupt as speculators started opening accounts like crazy to trade during the so-called “Go-Go Era”. They were victims of their own expansion. In later editions of The Intelligent Investor, Benjamin Graham recommended that until the situation resolved, shareholders should go to the trouble of direct registration of securities / bank trust custody to avoid having stock held in a street name just in case their broker went bust! God in Heaven everyone is running around acting like this is some unexpected turn of events! What did they think was going to happen? (Wait until they discover institutions and regulators can shut down markets entirely, not just a single stock! No, seriously. During the pandemic, there was supposedly a high-level discussion between major players in both New York and London about slamming shut the equity markets. It only lasted for a brief moment but Aaron and I dropped everything and made emergency preparations for a zero-revenue event at Kennon-Green & Co. thinking there was a chance we might live through a close like the one investors suffered in 1914. It is one of the reasons that every single fiduciary contract we signed that involved an equity component has a provision requiring the private client to notify us if they think they will need liquidity from their account within 60 months, in which case we do not put the money in the stock market. These things have happened in the past and it is more or less likely they will happen, again, in the future!)

It’s fixable, of course. Nobody wants to do it. The easiest way would be to introduce the financial equivalent of medical co-pays, which economists have demonstrated are essential to preventing the health care system from getting swamped. That would have to come in the form of a minimum regulatory commission of, say, $25 to $50 per trade, below which broker-dealers would be forbidden from executing transactions. It would destroy the high frequency trading business on Wall Street and run most small-time speculators out of the market. Average holding times would increase dramatically for most stocks. It would go a long way towards returning the capital markets to their true function of providing capital to businesses from long-term investors, especially if coupled with a much higher short-term capital gains tax on certain voluntary dispositions (e.g., it would exempt corporate buyouts or tender offers). Good luck getting that through Congress. In the present environment, I see it happening somewhere between “never” and “hell freezing over”. There is too much special interest money that would fight to prevent it, some of which would go into politicians’ re-election campaigns and some of which would be used to fund a propaganda push meant to convince the general public that such safeguards were somehow a bad thing despite them working marvelously in the past. Suffice it to say, in the same way mass-adoption of index fund investing is threatening to break the capital markets over the long-term, so, too, are “free trades” insidious.) And don’t get me started on all this nonsense about the “democratization of capital markets” or how such a solution would be anti-free market. Give me a break. A well-run, free and responsible society routinely puts modest restrictions on behavior for group stability and survival. You cannot expect to shout “Fire!” in a crowded movie theater if there is no fire and call it freedom of speech. You cannot expect to be allowed to sell a toaster that is so poorly engineered it has a high probability of electrocuting customers without being bankrupted and thrown in prison. We set age limits on when a person can drive, smoke, or drink alcohol. We don’t allow minors under the age of 18 to hold a direct and free title to property except as beneficiaries through specially-designed mechanisms such as UTMA laws or trusts. If Congress wanted to do so tomorrow, it could pass a perfectly constitutional law that said no one was allowed to open a brokerage account unless they had at least $25,000 in equity capital and, furthermore, no one could use options or margin unless they had $500,000. It was that way yesterday, it is that way today, and it will be that way tomorrow. Go read a high school civics book as well as a few histories of the Great Depression. Market regulations are among the oldest known to humanity going back to ancient Babylon.

I don’t know … my emotional and intellectual feelings on the entire thing, from start to finish, can best be summed up by Viola Davis in Exhibit A.

The Echos of the 1990s Are Worrying Me

I’ve lived through this movie. This is nothing new. I bought my first stocks in the 1990s during the dot-com bubble and navigated it without blowing up my capital despite an increasingly unhinged environment towards the end. Even this is nothing – nothing! -compared to how bizarre it was back in those days. Yet, I’m starting to see echoes and rhymes that make me nervous. A small percentage of younger people, particularly those below the age of 30, are beginning to talk about how traditional valuation metrics no longer matter; how the system is rigged and long-term investing is impossible.

News flash: The boomers before you said the same thing back between 1995-2000 when they were your age. You are no different than they were. Human nature doesn’t change. This is history repeating itself and even if it goes on for years, the end will be the same. A few intelligent early trades will lead to spectacular profits in a short period of time. Later, the trades will become riskier and riskier. Along the way, a bunch of idiots far removed from the early, intelligent traders, will make a lot of easy money for several years but, in the end, they’ll blow up their lives and balance sheets. Meanwhile, I, and people like me, will end up getting richer by selling them Oreo cookies and Hershey bars, Coca-Colas and Jack Daniel’s; furniture, automobile parts, insurance policies, credit cards, and software. And I’ll have done it sitting on my ass, without borrowed money, with the margin of safety that comes from always striving to pay a reasonable price relative to free cash flow. My patience, and discipline, allow me to outlast everyone. Through booms and busts, recessions, different political administrations … the reason I survive and grow wealthier is because I am willing to look exceedingly foolish, for years on end, by focusing on cold, hard cash flow. I simply do not care about anyone else’s opinion, including the market. If push comes to shove and the market never reflects the value, I’ll just keep buying until we, and our clients, own the whole damn company. I don’t need a business to be public because the stock market is just a tool, a vehicle, through which I can accumulate cash flows.

It is simple, inescapable math.

Situations Like GameStop Present the Risk that Average Investors Forget a Core Truth: In the End, Fundamentals Are Destiny

I wrote about this recently. At work, Aaron and I shared one of our favorite examples of this phenomenon in a private client letter that was included in the 4th Quarter account statements. I am not going to publish the entire document because it deals with the large structural trade in which we are engaged at the moment and which I don’t wish to disclose. Besides, it’s not relevant to our conversation. I can and will share the bulk of the rest, though:

“In the end, fundamentals are destiny. Despite this, fundamentals can take a long time to exert themselves; far longer than most investors realize. Let us provide an extreme example by using one of the most successful investments in the annals of capitalism, Berkshire Hathaway, Inc. Not only should the review prove useful from a practical perspective, but it is also historically interesting as a result of nearly all private clients of the firm holding a meaningful stake in the corporation.

Picture it: The year is 1968. A then-38-year-old Warren Buffett is running Berkshire Hathaway, Inc. out of Omaha, Nebraska. The predecessor to the modern-day Class A shares closed the year at $37 per share. Seven full years go by – seven years – during which he and, to a lesser extent his business confidant, Charles Munger (who didn’t officially become Vice Chairman until 1978 as he was busy running an investment partnership of his own), focused on finding intelligent ways to build Berkshire’s economic engines. Among the most important decisions during this period was acquiring Southern California confectioner See’s Candies in 1972.

By the end of 1975, what did he have to show for it? Each of his Berkshire shares closed at $38. His total return over that seven-year period was $1 per share, or 2.70% cumulative. To add insult to injury, he had lost money on an inflation-adjusted basis; that is, his purchasing power was lower making it so he could buy fewer groceries or pairs of tennis shoes. Regardless, the core economic engines at Berkshire Hathaway were far more attractive, and capable of producing far more free cash flow, at the end of 1975 than they were in 1968 despite the stock market returns not reflecting this truth.

You know how the story ends. Shareholders who focused on intrinsic value and continued to hold Berkshire Hathaway – or, even better, had used that seven-year period (and beyond) to accumulate ownership whenever they could afford to add to their portfolio – were richly compensated. The stock closed the final trading session of 2020 at $347,815 per share. See’s Candies, in particular, was one of the most important contributors to that figure. As Buffett told stockholders in 2019, Berkshire had invested $25 million into it and subsequently watched it produce well over $2 billion in pre-tax income; money that was used to fund yet more acquisitions that, in turn, provided funds to pay for additional acquisitions beyond that, fueling a virtuous compounding cycle.

An example like that is so extreme it is unlikely to repeat itself often. However, nearly all great multi-decade super-compounding enterprises have gone through similar stretches. It happened to The Coca-Cola Company. It happened to The Walt Disney Company. It happened to Johnson & Johnson. It happened to The Hershey Company. On and on the list goes. This is simply something that must be accepted and emotionally reconciled if a person hopes to practice value investing successfully.

You may wonder why this strange, seemingly irrational situation continually manifests. People have been asking this question for a long time. In 1955, Benjamin Graham, the father of value investing, was asked to testify on the stock market before The U.S. Senate Committee on Banking and Currency. After sharing his remarks, the committee Chairman inquired: “When you find a special situation and you decide, just for illustration, that you can buy for 10 and it is worth 30, and you take a position, and then you cannot realize it until a lot of other people decide it is worth 30, how is that process brought about – advertising, or what happens?” Graham’s response: “That is one of the mysteries of our business, and it is a mystery to me as well as to everybody else. We know from experience that eventually the market catches up with value. It realizes it in one way or another.”“

Again, let me be clear: We’re nowhere near the 1990s, yet, but there are definitely individual stocks that are at that same level of delusion. In the 1990s, people who wrote online or in newspapers about an overvalued stock or trade received death threats, so great was the obsession with keeping up the insanity. Also, I need to reiterate that the original thesis of the original trade on GameStop, in particular, was not a matter of a traditional bubble but, rather, a speculative attempt to trigger a short squeeze based on mechanics not fundamental value. Yes, once the trade went viral, it did become a bubble, especially considering there are multiple ways in which the situation can be resolved to their detriment.

The Regulators Could Cut the GameStop Trade Off at the Knees in a Heartbeat If They Desired

Actually, about that last point. I don’t think many of the speculators (as opposed to the experienced traders I mentioned earlier) have any idea it’s even possible. They are running around thinking the short squeeze has to push the stock higher. No it doesn’t. It might happen but there are no guarantees. It’s one thing to bet on a short squeeze. However, a prudent person must assume that if the short sellers who got in over their heads go bust, and the losses threaten to cascade out into the broader financial markets, the regulators will be willing to cut the buyers off at the knees to save the system.

For example, it’s possible the short interest has already fallen to a degree that the danger has passed. Yet, for the sake of illustration, let’s assume that is not the case and that short interest is still above 100% despite the estimates to the contrary that were released today. What are the potential outcomes? If push comes to shove and the short interest can’t be managed without intervention, the best outcome for the most innocent people may be for GameStop to issue enough stock to close out the short interests entirely in exchange for a multi-billion dollar equity infusion, essentially absorbing the hedge funds’ capital as their own. The alternatives for the hedge funds may be worse, especially if you start finding ways to go after the executives for securities violations and throw them in prison if they don’t comply. Something somewhere would stick under any number of legal theories even if you had to be creative. Systemwide integrity is important enough that if it comes down to it, the regulators would need to be utterly ruthless to force the transaction even if it meant later asking for forgiveness rather than permission if it turned out they overreached in an attempt to protect innocent investors. If you didn’t want to go down that route, simply put pressure on the financial intermediaries, such as the index funds, which hold a lot of concentrated voting power in GameStop, and have them overthrow the board entirely so you can get it passed without opposition. If the will is there, there are several paths to the destination.

Such a move would have several advantages. The existing GameStop stockholders would suddenly find their shares backed by a ton of cash – real intrinsic value per share would go up dramatically – even if it ends up being far lower than the fever dreams of the most aggressive speculators. This would grant GameStop years to attempt a turnaround as the balance sheet would improve dramatically; a non-deserved windfall that would be akin to handing a dying business a prize lottery ticket and save thousands upon thousands of jobs for at least a little while. The long-term owners of the retailer, who were truly interested in the company’s success and who bought at much lower prices, would get far more than their stock could ever have hoped to justify prior to the recapitalization. Meanwhile, the recent gamblers who have been piling into the stock at any price above, say, $100 to $125 per share, and were thus behaving with the same unrestrained greed as Melvin Capital when it shorted too much of the company in the first place, would find themselves sitting on large losses as a punishment for their gluttony. The members of that latter group may mindlessly repeat, “We like the stock” but they are lying either to themselves or others; maybe both. They like the short squeeze and salivate at the idea of making a lot of fast money due to exploiting a glitch in the capital markets (not from diligently investing in an enterprise and participating in its success or failure) as well as from punishing a bunch of rich people that they blame for their current lot in life. Just like Melvin Capital, they would get screwed for overreaching. Of course, handling the voting rights issues that would arise from such a recapitalization if you wanted to protect GameStop as an operating company would be tricky – you might be able to get around it by issuing zero-percent super-voting preferred shares to the old stockholders on a share-for-share basis immediately prior to the recapitalization so even the speculative buyers weren’t too disadvantaged – but, regardless of the mechanics, it can be solved equitably.

Am I optimistic about GameStop’s chances to right the ship? Not particularly. They’ve made terrible retail decisions in recent years. They acquired and all but destroyed ThinkGeek.com, which was one of my favorite retailers of unique video game themed gifts. If I were on the board, I’d reverse that decision immediately and say, “Rebuild the site and the brand from the ground up.” I may even have migrated everything to the ThinkGeek brand and expanded out beyond video games as it had a better chance of building and thriving in a retail store environment once everything goes to digital downloads. It was delusional for GameStop to think it would capture all of ThinkGeek’s old sales by redirecting the website to GameStop. Instead, retailers like Box Lunch and Fan Gamer are stepping into the void they created with that puzzling move. However, with the recent changes on the board, who knows. Fresh talent could mean all the difference. Betting on a turnaround is far from a sure-thing. It doesn’t work often but it can happen. Maybe they’ll pull it off in the end.

One positive outcome to come from this is that a handful of young people – maybe a few percent at most – will be burned but, in the process, learn to never try to ride a bubble or speculate with capital that could be worth much more over decades if they put it to work intelligently. What seems to be a large loss to them today will turn out to be the cheapest tuition they could possibly pay for a lesson that will save them down the road. It’s totally different for an 18, 22, or 25 year old to lose a few thousand dollars than for a 35, 40, 50, or 65+ year old person to blow up a big part of their portfolio. For the earlier members of that group, it’s still recoverable, but in the latter, there is a much higher price and it could be horrific, especially if they have children.

In any event, I have no idea if we wake up to find GameStop stock trading at $1 per share or $10,000+ per share. I neither know nor care what the future holds for it.

Given its lack of adequate risk controls and guilt in putting everyone in this position, I don’t care if Melvin Capital is wiped out or suffers horrible losses.

What I do know: In light of the potential obliteration outcomes that could exist with GameStop shares, particularly involving a recapitalization of the balance sheet but also including the authority of different broker-dealers and clearing houses to restrict trades or require much higher capital levels that, in turn, could depress volume, I have no desire to be exposed to it. If a bunch of people make a bunch of money, great. I’m happy for them. It will not change how I operate. If the GameStop trade blows up, the intrinsic value is not there in the underlying business to justify the current price so I have no interest in it. In the game of multi-generational wealth accumulation and preservation, I understand what works and am not about to abandon it.

What I do care about, greatly: The regulators need to keep the stupidity around GameStop contained so the rest of the people in the sandbox – pension funds, workers with their 401(k)s, kids with their UTMAs, little old ladies in their 90s with their DRIPs – don’t suffer.

This entire situation is a distraction. It should change nothing for you and your family. Build your primary economic engine, expand your portfolio of productive assets, avoid liabilities, pay your taxes, and let time do the heavy lifting. If you are gambling on the stock, good luck. I truly hope it works out for you. I’ll be happy for you if it does. Be prepared for total losses, though, especially if the regulators decide it has gone on long enough. You are going into a war you do not fully understand.

Important Disclaimer: None of this is intended to be, nor should be construed as, investment advice. I am sharing my own thoughts, in my personal capacity as an individual, on my personal blog, about my feelings around the re-emergence of a phenomenon I haven’t seen to this degree in more than two decades.