How WallStreetBets Really Started - Trolls of Wall Street - With Nathaniel Popper

Trolls of Wall Street on Amazon: https://amzn.to/4e40D5M

An interview with Nathaniel Popper the author of Trolls of Wall Street - How the Outcasts and Insurgents Are Hacking the Markets. Trolls of Wall Street is a new book telling the story of an improbable gang of self-proclaimed “degenerates” who made WallStreetBets into a cultural movement that moved from the fringes of the internet to the center of Wall Street, upending the global financial markets and changing how an entire generation thinks about money, investing, and themselves.
   
It tells the story of the people like Keith Gill (known online as Roaring Kitty) who made and lost millions, battling with each other—and with Wall Street—for power and status. It is a sobering account of how millions of young Americans became obsessed with money and the markets, casting a long and lasting influence over finance, politics, and popular culture. 

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Transcript

Welcome back to the channel everyone viewers are often asking me for book recommendations in the comment section and I just read the trolls of Wall Street by Nathaniel Popper which is a really fascinating look at meme stock mania that we've seen in recent years and I had to tell you guys about it. Describing the book as just a book about meme stocks would be selling it short and I never recommend selling anything short on this channel in fact that's one of the lessons of this book The book's more interesting than just a book about mem stocks because it examines how online discourse and society as a whole have changed over the last few years we've lived through a fairly strange time of lockdowns mass protests over a variety of hot button topics arguments about free speech and through what the Press has described as an epidemic loneliness and this book manages to pull all of these topics together while being mostly about meme stocks and the Wall Street bet subreddit I'm lucky to have the author Nathaniel Popper on the channel today and I think you'll find this topic as interesting as I do um yeah I just finished reading the book uh yesterday and to be honest I really enjoyed it uh that is so great the reason I enjoyed it actually is you know the kind of GameStop and uh you know mem stock story is a good story but I felt this was much broader than that it was kind of a story of sort of What markets were like over the last year kind of the strangeness of Co and people you know at home uh joining online communities and um even I think there were things like um you know big topics like uh social media moderation that everyone has been talking about you know with regard to all sorts of things like uh you know Hunter Biden's laptop and uh presidential elections and uh you know Elon musk's purchase of Twitter and you know the way uh Reddit is uh is moderated was kind of fascinating in this story too that's that is so nice to hear that's so nice to hear I mean it it it's amazing because when I started this I was actually digging into your podcast to understand some of the Dynamics around GameStop um so this is a great moment sort of Full Circle moment to come around and talk with you about all this because I do feel like I learned so much in the course of writing this and it took me in so many unexpected directions yeah well actually one of the things I enjoyed you know when you get to the end of the book you see uh you know the little section on on the research process and it's such an interesting thing that um you know maybe at many times in the past you'd research things like this and they'd be sort of a he said she said kind of situation while all of this stuff is on forums like this was you know text based so you can kind of you really find the data it's not uh ambiguous yeah social media I think it it sort of makes a new kind of History a new kind of real time history teller possible yeah yeah and so so tell me like tell me what drew you to the story originally was it just that there was cuz there's sort of the kind of thing that would maybe drive you to write an article and a different thing that would drive you to write a book yeah I was covering uh GameStop as it was happening at we were at I was at the New York Times and we were chasing down roaring Kitty and trying to understand how this had happened you know it was such a bizarre moment in which all of the world's attention got trained on this bizarre stock that nobody had heard of except a bunch of Gamers of course and as I began to talk to the people around this I realized you know people were thinking about this as a sort of flash in the pan there was this thing that had suddenly flared up overnight and was going to disappear what I saw was that there was something much deeper going on here there was something with much deeper roots that went back much further than I had understood as I was reporting the story out and so there's sort of a a simple story of GameStop and then there's this bigger story that I discovered which is really sort of the rise of a new generation a new generation of young particularly young men young people who are fascinated by the markets and who have turned this into a sort of centerpiece in their of the in their life in the way that you know maybe Sports was for a for for a previous generation yeah and I guess also driven by the co lockdown when things like sports weren't available right exactly you know you had this moment where uh the the forms of entertainment that were available to people changed overnight and you know this this idea of trading and markets as entertainment was something that had sort of been bubbling up since the last financial crisis and it was not you know it didn't happen overnight coming out of the 2008 financial crisis Americans and were alienated from the markets you know young people had gotten out of the markets were in there at record low rates and this slow growth that happened in this new kind of relationship to the markets in which it became a a sort of form of community and a form of entertainment and it sort of spoke to all these different weird urges in people the world uh but including me kind of got Wall Street bets quite wrong because I probably originally heard of it you know there were all there was all this talk of the kind of lost porn trades you know of someone uh you know putting every penny into some uh trade that's heavily heavily levered and they either make or lose a fortune uh in a few minutes and sort of videotape their response to it and post it on Wall Street bets there was plenty of that there was plenty of that there was but it's so interesting in many ways how the Forum changed you know which related to changing people using it but also even I had felt that the ground swell actually occurred initially on Wall Street bets but that's not really what happened it was more stock twits right when it comes to GameStop uh this little core Community had developed on stock twits as as you mentioned and it had grown up over a really a year uh before anybody in the public heard about it and you got this community you know was at the core maybe a dozen people who just got really into this stock and thinking about the potential that GameStop had that all of these short sellers were missing and at the center of that Community was roaring Kitty uh who had this YouTube channel where twice a week uh this community would come together and they would review every single fact and and and filing and news news uh item that they could find that would tell them anything about this stock but it was this really fascinating sort of crowdsourced research effort you know it was not just oh GameStop is a funny stock Let's uh put everything on it there was a lot of work that went into this and the fact that GameStop went up you know the fact that it went up to $400 $500 when it you know when it went totally crazy that was totally irrational but the initial sort of surge that brought GameStop into the public eye the fact that the stock went up I mean this little group really had realized something in their research that people were missing and you know that is part of the story that interests me it's the way in which we so often see this as you know the dumb money but swirling beneath this is people really learning about the markets and how the economy work and how companies work and yeah that happened initially on stock twits during covid and at some point they realized you know Wall Street bets is where the action is there we got to take our story we got to take this narrative there and that's where it could really that's where it really sort of exploded well e even that idea and and this is an idea I would have had as well of Wall Street bets as sort of an unruly corner of the internet but interestingly the the lead people within Wall Street bets initially wanted to ban discussions of things like Bitcoin they they didn't allow um you know sort of pump and dump type activity and they specifically were trying to stop people talking about GameStop rather than you know the other idea that that it was this unruly unmoderated crew who just were pumping and dumping whatever they wanted it's it's quite a different the truth is quite stranger uh than than the idea many people would have had yeah I mean Wall Street bets is this incredibly complicated place and I think it's really interesting to look at not just in itself and because I mean now it has 15 million members not just because it has the ability to move markets but because it's representative of a a new kind of online community that you know there are a lot of now and that govern the the lives and the way people think uh you know far beyond Reddit far beyond Wall Street bets and as you're pointing out these places are often these online communities are often seen as these unruly sort of you know anything goes atmospheres but that when they work it's because there is a sort of code of conduct there's a weird set of rules I mean it's a little maybe a little bit like you know the movie Fight Club where you know it's it's people getting out these aggressive instincts and it can be violent it can be ugly but there's also sort of a set of rules that draws people in and makes people feel a part of it and that's what made it work I mean if it had just been anything goes and anybody could post anything you know it wouldn't that would not have happened GameStop would have not have gone to the moon and and you know this community wouldn't have come together in the way that it did now tell me what your thoughts are cuz it's sort of fascinating obviously a lot of people in the Press have been saying that this Resurgence in GameStop and AMC is down to the reappearance of um of uh I keep wanting to call him Hello Kitty which is not the correct cat um different cat on on uh on Twitter but obviously I feel that around the same time I I tweeted that you had written this book and and I feel that that's likely what what uh caused this Resurgence in interest it was obviously the two of us yes the fact book was coming I think is why that that stock suddenly gain you know5 billion doll overnight market cap uh yeah no I mean I think this this latest Resurgence of roaring Kitty is is really interesting I'm still sort of trying to make sense of it it's it's a little bizarre and it's you know I tell the story of roaring Kitty or Keith Gil uh who developed this very interesting online Persona in the course of 2020 and 2021 and then suddenly disappeared and now you know three years later he pops up with these bizarre very memy uh meme friendly um uh post that suggests he's coming back suggests there's gonna be a Revival it's it's it's frankly very out of character with the roing kitty and Keith Gil of 2020 in 2021 I mean it's interesting when you look back that Roan Kitty was one of these characters who was really calling for restraint throughout the whole GameStop thing I mean he had a real Financial thesis about GameStop and you know it was this idea that there was there was this console reset that all the video game companies released their new consoles and I mean it was this very elaborate Financial thesis that was born out in large part and yeah as he led that Community back then he was he was a somebody who was always about going back to the facts and making sure that we're talking about financial reality and not just sort of getting caught in our own narrative he was always looking to question his story and this new Resurgence of roaring Kitty is something very different it is not a sort of responsible measured character who's saying you know let's look at this stock and understand the free cash flow it's somebody who's just trying to get the crowd worked up and I've actually had questions during this about whether this is the same roaring Kitty roaring and Keith Gil I I mean this is somebody who really has taken himself out of the story has has not I you know I called his lawyer during this and said is this the same guy his lawyer all his lawyer would say me we're not saying anything about this um but it's a very strange incident and I think in some ways it actually distracts from the real story of what's going on with retail trading and this ongoing interest in the markets that you know popped up during Co and is still with us today it has not yeah yeah very much so yeah had thought it would well the other thing that really interested me is in a way like raring Kitty came to this with this understanding of the fundamentals but then he seemed to stick with it with an understanding of of a short squeeze and how it could work and you you explain in the book that uh you know there were meme stocks before the ones we've all heard of one that surprised me were things like Lumber Liquidators and what was the other one Michaels the the sort of craft store but that the people in this community you know the there's sort of this mix I guess of you know the the uh gme owls who were talking about the fundamentals and then maybe more the the Wall Street bets guys who kind of got that when a squeeze happens it can go cuz you know to me the closest thing to it at the time was um was uh the Volkswagen squeeze from 2008 and I really expected it to work out just like that because you know there's not really any other ex this was a new thing um but talk to me a bit about the early squeezes and and and the how the moderators dealt with them them within uh Wall Street bats yeah I mean for the first several years that Wall Street bets existed they sort of joked about influencing the markets they joked about um they joked about how they were too small and puny and the markets were these you know these sort of alienating networks that were governed by professional Traders and there was you know part of the culture of Wall Street bets was it C it grew out of this feeling of powerlessness and in and in some ways they exercise that powerlessness by making crazy trades um but but but through experimentation essentially they they became entertaining and Drew in a broader audience but also sort of realized how the markets worked and that that's this this ongoing theme in this book is this idea that it was both sort of stupid and Brilliant at the same time you know they were both being idiots and they also understood something they also came to understand something that even most Financial experts didn't understand and that became clear I mean the first real uh sort of squeeze that was set off by Wall Street bets was Tesla I mean Tesla was the first real test case where a bunch of people came together online and started seeing each other's weird options trades on Tesla where they were betting on Tesla going up and because there social media they could all see the trades that they're making and with without necessarily explicit coordination they're all they all start placing very similar looking trades and they realize that the way the options Market works is that the market makers on the other side of these trades at some point have to start buying the shares which sends the stock up and it becomes this sort of self-perpetuating cycle and I mean this is confusing stuff I mean gamma squeezes you know short squeezes are confusing gamma squeezes are another level of confusing and yet this community sort of realized like oh my God we are pushing this stock up you know hedge funds are shorting Tesla they all think Tesla's going to lose money but we're pushing this stock up and they're losing money and they're getting scared and you know there was this this great reporter at Bloomberg named Luke Kawa who started to document this and the the the guys on Wall Street bets were following every article that Luke Kawa was writing on bloom as he explained you know this is how a gamma squeeze works and you know there was this crazy sort of uncoordinated coordination that went on where suddenly Tesla was going to the moon and everybody thought okay this is going to end this is going to end this has to end Tesla's Tesla's not making any money this is never going to work and yet basically for the next three years Tesla just kept on going up and hedge funders lost you know really tens of billions of dollars on their short bets thinking that these retail guys would have to give up at some point and you know that was this first discovery but it soon led to this you know these strange campaigns where they were looking at you know Virgin Galactic and plug power and you know that eventually of course led to GameStop but you know this this combination that I talk about in this book between this high brow and low brow you know this like this fine-tuned understanding of how the options markets works and what market makers do combined with these memes I mean it's really this world we live in this world that I talk about as you know this this world of trolling trolling is has become this part of our culture it's it's Donald Trump it's this idea that it's a joke but there's also something serious about it you know everybody When Donald yeah there's sort of plausible deniability in yeah and it's this bizarre sort of cultural uh cultural Vector that has come to exercise an enormous influence and you know we see it in politics and this is what I'm tracing is how we see this in the financial markets well actually one of the things that was really interesting was as you pointed out in the book that GameStop was you know they they kind of like these Spacey technology type companies initially and then we had GameStop and the the sort of spark that Lit GameStop was this video on on the internet of someone getting robbed for their PlayStation outside of GameStop on I think Black Friday right yeah yeah it was right after Thanksgiving in 2020 that GameStop really started to go into a sort of vertical ascent and that was that was a month before um you know before it it went viral in a whole different kind of way you know you had these sort of different paths as it as it went up um but yeah that was this this moment where you know some guy is getting robbed of his PlayStation uh which is this todrey dark thing that's captured on the internet and yet the guys on Wall Street bet realize you know there's this line outside of GameStop where people are waiting to buy PlayStations they all of the companies have just released their new consoles this is big business this is and and that moment actually represented a real sort of financial understanding of how uh the game Gamestop business worked how the video game industry worked and you know that again that sort of weird combination of high and low well even you pointed out one of the guys on the board what worked out that uh that he could he could essentially work out what the sales were at GameStop by collecting receipt numbers and so So within this forum just sort of crowdsource that kind of information where you know a Wall Street analyst wouldn't know what you know because a Wall Street analyst just has to kind of call up and you know uh do more uh standard analysis you don't have uh you know 10,000 gamers in a forum who'll tell you uh you know I bought a PlayStation and this is the receipt number yeah I mean you know the uh the hedge funds are relying on things like you satellite pictures of parking lots outside the mall I mean they do that kind of analysis but you know it is this inherently secretive industry where you don't tell you don't talk on social media about what your beted is for the most part and here you have this totally different approach where like let's let's let's bring the crowd let's bring the hive mind to this and figure out what we can discover and you know it that that that democratization of information you know had not been brought to the market before yeah it's kind of fascinating you know it's also so interesting how you know all of these things sort of came together to make it happen and um one of the things I was fascinated in the book is just this idea of the ownership of social media or the ownership of a platform because obviously there were people who came and went and you know the crowds grew and they they waxed and waned and you end up with this situation where there are many people who sort of felt that they owned or controlled or you know and and in many ways you look at it and you think it's kind of quite reasonable you know like in that um you know if if you run a YouTube channel you get paid to run a YouTube channel while if you run this uh you know what what did you say like 18 million readers of Wall Street bets and no one makes a penny out of it right like it's it's kind of fascinating I mean Reddit makes a nice a pretty penny out of this obviously Reddit just had its IPO um reddit's own stock you know un unsurprisingly became a sort of meme stock in this confusing way but uh reddit's own success has been closely tied obviously to the growth of these communities I mean these communities are where that company gets its value but the people building those communities are the moderators and the people who are going on every day and writing the content I mean that's that's obviously the stuff that Reddit Is Now monetizing by um you know striking deals with AI companies so Reddit is making money but you have these this just these sort of like surfs of the internet who are uh making it all happen and and you know generally earning nothing from it other than I would say they they are getting a sense of community you know so much of this is about uh people who are lonely people who are looking for a community people who are looking for a place to meet people like them and Reddit has offered that and that's there there is some real value there and that's why people keep coming back yeah well it was so interesting like even the well one of the things was I guess there was sort of a feeling that everyone in Wall Street bets or at least the early people had made a ton of money out of the short squeeze while if you look at most of the big names at least the moderators and the people who' been there a long time were largely uninvested in this squeeze and we maybe nervous about what was going on and trying to dampen things down um and then you know towards the end they many of them like seek out press and that sort of thing and said you know I I am the spokesman of these people but they they weren't really spokes people of the Forum The Forum you know was its its own animal right yeah I mean the crowd became its own sort of living organism and the the moderators played this interesting role in sort of you know guiding and directing the conversation I mean you know my book I I I talk about these two main guys who were at the center of the story and who were sort of representative in in different ways of this crowd I mean these guys who were struggling in life and looking for a sense of meaning and a sense of community and they were they took this real sense of of pride in this community that existed they felt like it was something new and they you know they couldn't always put their finger on it but it it meant a lot to them and they were guiding it but but they weren't the ones who were you know coming up with these crazy bets and realizing these these little you know loopholes in the markets that they could slip through and start to um influence things on a much broader level and um they it was it was the crowd that did that and then some of these moderators then you know began fighting for the the sort of attention and Limelight that came afterwards and you know there have been so many stories told about this but the those stories so often don't really capture the the weird complexity of this whole thing well e even there was a you know a rather sad moment in the book where Jordan the I I'd call him the main character in the book um you know all of this is going on and he's got this big computer setup where he's monitoring everything and he's got everything working and and you know whenever he steps away it all falls into chaos but there's there's all of this wealth being generated and Jordan can't pay the property tax on his home you know he's sort of working it sounds like almost through the night on on this project on this forum uh you know where where people love him and he loves the other members but you know he it's distasteful to monetize it I guess but equally the guy uh you know can't pay his bills I know this this funny contradiction where people had had faith in Wall Street bets because they thought they felt that the moderators were not trying to take advantage of them they felt like the moderators were there sort of Hosting this weird playground for them and they they trusted the moderators because they weren't trying to make money off of it and yet this is a community that's about money and and trying to make money and you know that another one of these strange paradoxes in the middle of this and and really in the in the middle of a lot of modern Creator culture you know our online culture I think we haven't really fully wrapped our heads around it around all the you know strange Dynamics and and you Jordan who is my main character you know just uh represented so much of this like this this guy who was in the middle of a community of 15 million people um who so often felt lonely and got nothing out of it and yet derived an incredible sense of purpose from it yeah yeah another I guess big part of the St actually one of the things I was fascinated as well by was uh you know obviously you know one of our villains in the story is is Robin Hood right but interestingly enough early on the The Wall Street bets guys knew that Robin Hood was a terrible broker I mean it was kind of an ongoing joke about how awful Robin Hood was but equally you know the growth of Robin Hood uh related to the growth of Wall Street BS and then when everything went wrong well it it's so it's so fascinating you know that that interaction right it was a it was a sort of like parasitic relationship in which they fed off of each other but were also you know weakening each other and I mean there were all of these moments where uh Robin Hood screwing up became the story on Wall Street bets you know Wall Street bets would realize there was some glitch in uh the the way that Robin Hood worked and they would take advantage of it and you know Express great Glee in figuring out ways to make Robin Hood lose money and you know this happened over and over again and you know was this classic tech company that was all about growth and not about building a product that worked and the the Robin Hood product just broke over and over again when the customers needed it the most you know it was Robin Hood had this message that they were democratizing trading and making trading available and allowing you to trade any time and then it would just go down when you know you needed it most and so you you got this relationship in which the Wall Street guys both relied on Robin Hood and hated it and you know it just sort of fed on itself and it reached a culmination of course in in the GameStop moment when Robin Hood really shut the Whole Thing Down by sto being trading when just as the stock was hitting a peak and that that's sort of an interesting point in the story because in a funny way I feel I've seen someone else describe it as a a short squeeze that turned into a conspiracy theory and that that was really where that that was the moment and it almost seems that things like Wall Street bets fell apart at that point as well like there were spin-off forums that were either more Focus on on on the the meme stocks or that were angrier or that were you know you related even the ideas of sort of Q andon type conspiracy stuff sort of fed many uh members of the community too yeah I mean so much of this whole movement is about a sort of distrust of traditional culture traditional Finance you know so M so much of this is about saying you know smart people buy index funds smart people just you know Buy and Hold we don't you know we've lost confidence in that and you know there real parallels between that and the rise of trump who's this person who's saying you know you can't trust the government you can't trust and and and you know people trusted the only thing people trusted was that distrust and um and that fueled this this movement from the beginning this was all about you know doubting Wall Street being skeptical of the things that Wall Street was thinking you know seeing this power in the common man and you know at times it could lead to a new understanding of how Finance worked and that happened in GameStop but it could tip over into this sort of conspiracy theory uh kind of mindset and that's what happened after after Robin Hood shut down trading in GameStop you know it just be turned into a sort of movement of conspiracy theorists and that's not the only thing that happened I mean there was a lot of other trading that was opened up by this so I don't want to you know that wasn't the end of the story but it seems to be the way that so many stories in online culture go where you know it starts with sort of a reasonable distrust I mean Donald Trump was a a character who you could people imagine voting for but it's so easily tips over into pizzagate and qanon and you know the line between this is I think part of the issue with trolling where it's hard to tell when somebody's being serious and when they're uh when it's when it's meant to be a joke and when it's meant to be serious and that that interplay uh you know was really there with GameStop where it turned from this sort of you know popular excitement about this stock and tipped over into this strange online world of conspiracy theories yeah what one of the things that I found uh particularly unpleasant at the time was you you described the sort of influencers the uh David pornoy is that his name and there was sort of Elon and chamat and there were a bunch of other very wealthy people who kind of turned up I would sort of say late to the party and kind of cheered it on and I remember at the time feeling it was wrong of a sort of a billionaire to go on Twitter and tell people yeah pile into this thing and haha it's hilarious if you lose all of your money I'm still rich and I I felt that there was it's even interesting like a community of uh you know probably self-described underdogs who then look up to like a certain group of billionaires as kind of being like them even though um you know there there's no reason to believe that these uh you know people me many of them have sort of disgraced themselves since then but uh you know people who really you know these people felt possibly had their interests at heart yeah I mean there's there's a good online essay called uh the culture of grift and the way in which grifting became a sort of central part of the online world and I think you know there's a way in which uh Donald Trump is a part of that story you know this person who plays on the distrust of his audience to make them trust him but then sort of turns on their interest and I think you saw that in the financial world with Alan musk and chth I mean chth was selling spacks to this crowd and and you know pulling fees out as the money came in you know not worrying about what was going to happen to those stocks uh you know as as they yeah with no no for the people who might struggle to put food on the table because you know while he's uh you know in in his private jet kind of thing I mean I think there's there's an element of this that is you know inherent to the internet in this world in which you're an online avatar and you just see these crowds of people who are just sort of weird screen names and it's it's so easy to to sort of depersonalize the whole thing you know you go viral and you have 80,000 followers and yet they're not real humans and I think I think that that has happened and I think you've seen that with Alon musk and his willingness to pump you know Dogecoin I mean these these things that you know again it was always so it can be a joke to him but it's someone else's savings it's uh and and you know I think we haven't had the full Reckoning of what that cost people you know he Alon musk was always pumping it as it was near the peak and then he would just you know as it crashed he would just sort of laugh it off I mean it obviously didn't matter to him but it did matter to the people who had followed him yeah I mean I was surprised uh years ago when I read the SEC report that the average account size on Robin Hood was a couple of hundred bucks you know which of course you know you go back 10 years earlier if you you couldn't have opened a brokerage account with that much money but you know equally these are you know there were many people who were not in a secure financial situation and it's easy to say oh big deal they lost a hundred bucks but you know when all you have is $100 that that's a you know that's a big problem yeah I mean Wall Street bets one of the things that it turned into over time was this place where you could sort of seek emotional consolation and when you had just lost all your savings I mean you have some of these really sad stories you know sad moments in the book where people talk about how they had you know come to the markets in a sort of state of desperation thinking that this might be something that could bail them out you know their their lives they didn't see where they were going they couldn't imagine owning a house they had student debt and you know they made these big bets and they you know more than a few of them lost it all I mean you know this this story of of of a suicide in my book that I talk about and you know Wall Street bets I think part of the idea of the community and part of the idea of the moderators was often to try to get people I mean it was a place where you could find company in your loneliness and and your sadness but it was also a place where you could learn and realize what not to do and you know the moderators yeah one of the interesting I think one of the interesting elements of the moderators is they often saw this sort of you know the Lost porn as you know they they wanted to talk people out of it they wanted to help make people better at this and realize that there was a different way to do it and I mean I I'm not sure uh how well the Wall Street bets itself succeeded in that but but you did see over time that people people learn from their mistakes and they they you'd have these moments of sort of grp group hysteria but people would realize afterwards like that's not how you do it we have to there's a different way to do you know to play the markets and you know with my book I I think I I try to bring it around to this story where you know Meme stocks have faded in importance over time and yet you know this new generation of retail Traders is still very much in the market and and they seem to be doing relatively well as a group I mean there are these sad stories of loss that are you know throughout this whole thing and then there's this other thing that's happened which is that like young people now think markets are interesting towards the end of the book you pointed out that early on uh young people didn't own stocks and they didn't trust anything and today 57% of Americans own stocks and young people are almost did you say more likely than older people to own rate of growth of ownership among Young Americans is much faster than among older Americans I mean it's become this sort of popular preoccupation for Youth and in youth culture now tell me that there was one bit where you talked about sort of this idea that it was this great David and Goliath moment but then you question whether whether David or Goliath actually won and you know if if everything is counted up tell me tell me about thought um yeah I mean the the David and Goliath story is one of the most complicated pieces of the Wall Street bed story because you know the Wall Street B certainly saw itself as a David up against um these these hedge fund Goliath and I think the popular narrative I mean the the sort of mainstream understanding is that Goliath always wins you know Goliath always uh you know slaps down the little guy and the guy the little guy always ends up losing and I I think it is it is it is a more complicated story than that I mean I think if you just look at GameStop um I mean that this was a real this was a real moment of Reckoning for the hedge fund industry I mean they the the hedge fund industry in the months after GameStop and and still today has realized that this crowd there's a power there and there are certainly firms um you know the market making firms are uh making money from the retail Traders whether they make money or lose money and so there's a degree to which this has been good for Wall Street but it has really changed the markets I mean you know there's a sense in which hedge funds are now afraid to short stocks I mean that that the and overall short levels have gone down over time and you know I think to to some degree this crowd has the the The Davids have bought into the idea that the goliaths will always win but I think actually The Davids haven't realized their their their power I mean I I think part of what is in this story is that this crowd when it's mobilized has a lot more power than even the people in the crowd think it does yeah I think that's true today I think that this this retail crowd is still playing a very important role in markets that was not true you know 10 years ago even 5 years ago yeah I think I think that's the case um one of the things we saw like you know there's some sort of uh what can we call like screenshots of p&l and you see I think ruring Kitty started out with maybe like around a $50,000 account um he spun it up to I feel maybe close was it like 47 million and then right around 50 million yeah and then then it declined maybe to around 17 and you know there was all the sort of lure of diamond hands and everything else and there were other characters in in the book that you know I feel there was a guy who maybe made 200 million in the squeeze like there was there was big big money but did many of them walk away or are they so you know are the diamond hands still in place well I don't I don't think the diamond hands are generally in place with GameStop among those people who made the tens of millions of dollarss I mean roaring Kitty himself you know wisely wasn't wasn't much noticed at the time but wisely cashed out as it went out you know he he got out yeah for you know millions and millions of dollars um before you know it shot to the peak and then came back down I mean he didn't he didn't he didn't sell at the peak and and take all of his winnings home but he you know he he captured his his uh he he har Ed his gains as as it went up and that's true with a lot of these guys I mean I you know roaring Kitty is viewed as sort of the ordinary guy who won but there this community that was around him the you know this the gme owls I call him this this crowd of retail traders who have been following GameStop for a year I mean this spun off a lot of millionaires and I don't think that has fully been appreciated and and and some as mentioned who made you know over 200 million 300 million there were few people in this community who you know individuals who basically made as much as big hedge funds as the biggest hedge funds that that cashed in on this um so I think that's that is this has and and you've seen the same thing by the way in other related Realms with crypto I mean there's this this strange new world of young millionaires walking around you know most of whom didn't always cash out at exactly the the peak but it's created this you know new world of money that that did not exist before yeah well it's seems like the the gme owls were maybe I guess early to the game and understood what was going on and and to me I thought it was amazing uh that they they didn't uh sort of step out one you know at or near the peak cuz if you know usually if you're valuation driven you'll kind of go well now we've achieved my target I'm out um many of them you know did awfully well within the squeeze um I'm I'm trying to think Michael bur was an example of sort of probably a sensible person who bought and then when it looked like a bubble walked away and so he wouldn't have made nearly as much money as many of of these guys uh but yeah the the question I guess Still Remains like you know the the problem I guess with a win that comes from a gamble is do you learn your lesson and stop G Ling or do do do you just keep going and and grind yourself to zero yeah and and I I think that is where you know when I I talked to a lot of these owls who made millions and a lot of them you know they had been drawn to uh GameStop because of a very fundamental sort of value driven thesis and you know when it turned into a viral phenomenon a lot of them felt totally out of their de dep I think I think everybody in the Market's felt out of their depths nobody could figure out how to play this or what to do about it um but a lot of them did realize like this is a moment to cash out and a lot of them did cash out you know significantly I think royan Kitty actually is probably one of the people who held on the longest even though he did you know Harvest his gains on the way up um a lot of people did cash out and as I've tracked a lot of those guys they you know they are they are have applied a lot of them quit their jobs they made enough to to be able to quit their jobs and a lot of them are are have moved on from GameStop and are doing much more sort of sensible trading you know selling um you know selling covered calls realizing these little um sort of opportunities in the market that are not meme stocks you know they they didn't join GameStop because it was a meme stock um they joined it because it was something else at the beginning and they have adapted over time and a lot of them are are essentially professional you know prop Traders now with their own book and they're smart I mean that that is again the story so often the story in my book is that there is a lot more learning and growing and sort of people uh people becoming smarter in the course of that early on as well there was very much this feeling of people help helping people um I guess that's probably easier when the community is small uh you know there's points in there where you talk of I don't know like millions of people joining on a daily basis near near the the peak and and I guess even the moderators sort of spotting sharks in the water and trying to throw them out but to what extent like there there's something so fascinating about these communities that well even the the story of uh you know Jamie the founder of the community and he kind of walked away and then he noticed it was quite big and you know I think he's even there's a lawsuit right now where he's trying to regain sort of control but the the question even is like you know what what even it other than the name of the community like what what remains of you there and and you know how to to what extent like are the big moderators like many of the people from the book are they still there are they posting on a daily basis or What's happen I mean I think to some degree you know what you're pointing to is the fact that wall what this Wall Street bets almost became too big for its own good you know it grew from a community of you know initially a few dozen people to a community of 15 million people and um and at some point these these sort of these collectives become too large to govern um but I think part of what's happened is that this whole thing has become bigger than Wall Street bets I mean I think it Wall Street bets was at the center of it but what you have now is a bunch of spin-off both subreddits and Discord communities you know this has become a kind of new form of community and people are finding their way I mean I I talk in the end about the growth of Discord communities dedicated to investing and I think that a lot of the sort of action has gone back back to those smaller more intimate communities where people can actually know each other and talk to each other and Discord is a place where you know you can be there all day with your community and you know it's not just about writing a post and seeing people respond to it um it's a real sense of community and so I think uh in some ways things have evolved in that direction and you know it's still very much something that young people talk about and form community around but I think that Wall Street bets is no longer the center of the action in the way that it was even though the main moderators who I who I talk about in my book I I mean I still talk to them frequently and they're still in there they're still trying to figure out how this community grows I mean they have big Ambitions but the community sort of has a mind unto itself now I'm lucky cuz I got an early copy of the book when when does the book uh hit the bookshelf the book will be released on uh June 11th and uh you know I'll be doing other appearances around then this is one of the first conversations great great conversation but uh yeah the book will be hitting on June 11th and of course uh you know you can order in advance and you'll get it that day yeah I mean I I would strongly recommend it it's not as I said early on it's not just a book about Finance or a book about uh you know the gme short squeeze or anything like that it's it's very much a book of of this time and I I felt it sort of pulled together many threads that that you kind of go yeah like the world really changed around that time and it changed because of you know lockdowns and Co and cultural changes and working from home and changing expectations and E even the kind of um you know the friendships the online education aspect and I felt even like you know there were just some very interesting points in there about even the you know I guess sort of as Society became maybe more polite uh online discourse became Rudder almost as uh you know in a trolling way as you say but in a way like a reaction possibly against sort of what the uh you know what people's parents were telling them to do you know the the kind of woke mentality didn't really infiltrate uh well Street bets to a huge now I think that online trolling culture has become so powerful that it's spun out and is now sort of overwhelming the old sort of polite popular culture you know the mainstream media is sort of losing its hold to this world of online trolling which is where young people are living and increasingly sort of you know everybody else is getting pulled in as well it's just this sort of this Maelstrom yeah yeah well thank you very much for coming on the channel it's been a delight to have you on I really enjoyed the book and I I do strongly recommend it well thank you I really enjoyed this was a great conversation thank you for reading it so carefully and being such a great questioner and for you know really dig I mean as I mentioned to you I I learned so much early on from digging into your videos when this was happening so it's it's really that is so nice of you to say that so yeah okay enjoy okay talk to you later thank you B bye thank you guys for tuning in to today's Podcast I'll put a link to the book in the show notes if you wish to pre-order a copy