Don't Fight The Thread: A $YOLO Vs Wall Street Story
In late January, a coordinated effort by amateur investors on the subreddit r/WallStreetBets sent stock prices of GameStop soaring. That meant huge losses for hedge funds like Melvin Capital, which had bet against the fortunes of the video game retailer. “Gamestonk,” as the whole affair became known, exploded conventional wisdom about how investing works and left the media struggling to make sense of what exactly had happened. Guest contributor Jey Van-Sharp, a business consultant with a strong affinity for and understanding of youth and creative culture, says Gamestonk wasn’t an outlier. Instead, he believes it was the first round in a knockdown fight between financial elites and a rising young contender: $YOLO investors.
There is an expression on Wall Street: "Don't fight the Fed." It reflects an investment strategy that investors should align their choices with the actions of the Federal Reserve System, or Fed. Aligning with the Fed generally means buying stocks when interest rates are low, and avoiding stocks when interest rates are high. Blah blah blah. This is boomer talk and elitist talk that hides the scam of them giving free government money to bail out their Wall Street friends. The real advice should be “place your bet wherever the bailout money goes.” Cool?
Hi, I'm Jey. I'm a business consultant that builds companies, and I teach creatives how to build businesses. I love culture, and I know culture is smarter than me. And in my line of work, I get paid to know shit. So, I’m going to take this “shit” that I know and talk about an important cultural moment that happened last week in the stock market, and talk about something that often gets lost in business jargon: the business of stocks and short squeezes.
We all know that Wall Street is corrupt and a scam, and we know the Wall Street titans win and we get scraps. And yes, it sucks to see crude bros win, but whatevs. Some of us have friends or lames who work at hedge funds, and we tolerate them because they buy the bottles and the drugs, right? For some of us, maybe we think if we hang out with them, we’ll get rich too? We all think these (mostly white) guys are super smart, and we are too dumb to learn how it all works, right?
This was how it worked for most of our lives until COVID. COVID... Jeeeez and wtf. COVID made us stay home because the world was ending, but what we did not realize is that out of this evil, came good. Spending all this time at home, life began to make some shit clear. What was actually true, versus what we thought was true, became even more clear. For example, there is no more club, and thus, no more reason for us to pretend we are friends with the ‘bro banker.’ Turns out a lot of what we were doing with our time was wack and burned cash, but we were moving so fast and were so distracted that we didn’t realize it. With the stay-at-home order, we had to become friends with our 789 square foot NYC apartments that, all of sudden, felt like 100 square feet, while the emotions in our heads felt like 18,756 square feet.
We were all educating ourselves, one Instagram post and TikTok twerk at time. We were getting smarter—for real. This was the first time in the history of our species that we were able to just sit there and go wherever the internet took us. No office. No club. No tequila. Just you in 789 square feet of you.
We had to get to know ourselves like never before—all while battling through propaganda, misinformation, unemployment, furloughs, police killings, protests, elections, more propaganda, a coup, and toilet paper lines. The clubs, the bros, the chicks, the “I got to go there's” and all that other toxic shit went away in a snap. The world was “over,” and we were (and basically still are) living in a pandemic movie. But months passed, and we found a routine. And something was happening in the background of all that—we were all learning. We were all educating ourselves, one Instagram post and TikTok twerk at time. We were getting smarter—for real. This was the first time in the history of our species that we were able to just sit there and go wherever the internet took us. No office. No club. No tequila (well, maybe there was some tequila for a few of us). Just you in 789 square feet of you. Keep walking with me, I’m still turning the corner here on my point.
The 789 square feet phenomenon: neuroscientists identified something called “dynamic coupling,” where the brain activations of different people doing the same task converge, firing in sync, motivated by the same interest, peeve, or passion. It goes something like, “I’m shaping the way you behave, and you’re shaping the way I behave.” And this coordinated behavior was happening across the world. This is where many individuals can generate dynamics that are larger than anything they could produce on their own.
We were all getting smarter at lightning speed - if you were in tune and on that ‘timing,’ you were making leaps. Whether it was learning stock trading, virology, watching Versuz, baking bread, or decluttering rooms, we were making moves inside, because we were not OUTSIDE. If you got the “WE OUTSIDE” reference, then you are experiencing dynamic coupling with me. The culture is allowing us to say “hi” to each other, and converse around a meme. “We Outside” is a small piece of a culture that signals membership from one anonymous group member to another using the culture piece as a kind of binding agent.
Culture is a syringe that injects information passively into us, and diffuses that information en masse—the internet is the crack in the syringe. Raise your hand if you lowkey learned something new this year? Like, how not to be racist or sexist, or toxic, or how the Electoral College works. See, that was all culture teaching us and shaping us. Ok, back to the money convo and dynamic coupling stuff. I promise, the corner has been turned, and now I’m walking down the block.
People started to learn and ask the only question in the stock game that matters: How do I make money? They started to dig for money knowledge, but the books, the words, the lingo, the jargon, and the Ivy League condescension was not helping them make more money. What did? Memes and FOMO.
Something else was happening as a result of COVID-19—the stock market crashed. This was the moment when we realized that ‘pain was our friend.’ The rumors of companies’ stock falling by 60% were all around the inner circles of Wall Street and the financial ‘gram (money talk on Instagram). A lot of people were scared, but a lot of people were also excited to get deep discounts, following an investment philosophy to buy during dips (sharp drops) in the market. Imagine the world's biggest sample sale; you go YOLO because you see deals. March 2020 was like this in the financial world. This financial sample sale brought new people in who, because they were home, had time to get into the mix buying stocks, and with the help of brokerage apps like Robinhood, started to learn how to do it fast.
Being at home with Robinhood made it simple for Millennials and Gen Zers to put money into stocks—like mad simple. The Robinhood app is like a video game, whereas the traditional brokerage firms are full of ‘Brioni-Suit-and-Few-Cool-Slim-Suits-Scammers’ who made things purposely complicated to keep people out, while forcing us to pay fees if we wanted in—a scam. So, with us at home with a cultural syringe in our arms and a game called Robinhood at our fingertips, we started buying and people started seeing the money flow. Nothing like money to get people interested in shit, right?. People started to learn and ask the only question in the stock game that matters: How do I make money? They started to dig for money knowledge, but the books, the words, the lingo, the jargon, and the Ivy League condescension was not helping them make more money. What did? Memes and FOMO. Nothing teaches us more easily than culture, and nothing is harder than learning from a big boring boomer book.
$YOLO is the money version of ‘YOLO!’ It manifests itself on the surface as taking big bets on stocks, while under the surface reinforcing a sentiment of nihilism and rebellion against oppression. The group rallied around that $YOLO energy, and that created a culture so strong that they started learning, digging, connecting, hacking, but mostly laughing at the sadness of boomer life and the death of the 'American Dream' the boomers still believe exists.
Unbeknownst to a lot of new stock people, all their searching and fucking around created a dynamic coupling with another underground group called Wall St Bets that lives on Reddit and within memes. The group was filled with all the things that eventually form a culture: lingo, codes, symbols, goals, and an enemy, but most of all, it had an energy. The energy was $YOLO. ‘You Only Fucking Live Once Risk It All The World Is On Fucking Fire The Old White Men Fucked Us and Our Parents Who Told Us to Color Within The Lines Failed So Fuk It,’ type of YOLO energy. “We $YOLO!” That is the energy of Wall St Bets.
$YOLO is the money version of ‘YOLO!’ It manifests itself on the surface as taking big bets on stocks, while under the surface reinforcing a sentiment of nihilism and rebellion against oppression. The group rallied around that $YOLO energy, and that created a culture so strong that they started learning, digging, connecting, hacking, but mostly laughing at the sadness of boomer life and the death of the 'American Dream' that boomers still believe exists. What this energy created was a mega brain made up of millions of smaller brains working together, both unknowingly and knowingly, saying, “fuck it, let’s beat the game.” A boomer may look at the group and see frivolous stupidity, but if you look more closely you will see lean data sets providing insight and, most of all, enthusiasm—a thing you need to play the high risk/reward game of the stock market. What became clear was that the whole is greater than the sum of its parts. What eventually came out of this grand $YOLO energy was the ‘play of all plays’ to fuck the enemy, the old hedge funds who legally scam in the name of the Lord and free markets.
What did the $YOLO group find? They found something called a short squeeze. I explained it to a friend who owns a fashion brand like this: A short squeeze is like if you let a person watch your store for a week while you were on vacay. You hired this person to watch your store because they were a professional. But while you were away, they sold all your inventory at full retail price and took the money, hoping they could find the same designs in China for a cheaper price, and fill back your stock before you got back from your vacay. They do this so they can keep the profit between selling your shit and then buying it back cheaper and pocketing the cash—all without you knowing. They have been doing this to all the stores for years. They call it short selling.
But here’s is what is different this time. All your customers found out what was going on and were like fuck that, and bought up all the inventory from China themselves, forcing the professional to outbid them, and ultimately pay more than your original retail prices. Then the customers took it even further, $YOLOing and counterbidding back and forth, driving the cost of the good up even higher than what you originally paid. This is called a squeeze. And now you are coming back from vacay tomorrow and the professional is freaking out. They have no more money to beat out the $YOLO swarm. The shit is crazy. The $YOLO Group created an ecosystem of anonymous strangers on Reddit that passed around genius interlinked through their cultural memetics aka memes in a laughable form. But as Shakespeare once said, “there is truth in jest.”
This has been building for years, and last week it came to a head where the squeeze took form. It was genius, pure genius. This was such a win for the $YOLO culture that Wall Street boomers are angry, or, worse, in denial. I've been listening, reading, watching, and receiving opinions from boomers & elitists all week and they are completely missing what this is. They think this is about one or some combination of the following narratives:
Kids don't know what they are doing.
This squeeze was about taking down Wall Street specifically.
This is about kids’ get-rich-quick schemes.
They used these three narratives all week to feel in control and judge—a natural reaction to a paradigm shift. What the boomers and elitists fail to see is that this dynamic coupling was just the round one demonstration.
The boomers are obsessed with stability, and elitists are obsessed with logic. The youth are not obsessed with either because there is no stability for them - they are a gaming community trolling the seriousness of it all. They know it's all a scam and a lie.
These elitists have convinced themselves that this was a fluke, because “how can $YOLO memes take down a billion-dollar firm of geniuses in suits?” The $YOLO kids having a moment triggers the shit out of boomers and elitists because it destroys their illusions of superiority. It makes them angry that $YOLO hacked the scam.
What boomers and elitists are missing is that this is not about a particular narrative. It’s all three of the narratives mentioned earlier and none of them at the same time. It’s postmodern meta shit. It's about millions of different rationales and emotional impulses. It’s ‘NIHILISM PUNK, phuck you, YOLO, let’s watch it burn but make some bank at the same time.’ In the end, what it's really about is community and comradery. The boomers are obsessed with stability, and elitists are obsessed with logic. The youth are not obsessed with either because there is no stability for them - they are a gaming community trolling the seriousness of it all. They know it's all a scam and a lie. They have no reason to buy into the lie like some of the boomers and elitists, hence the joke. For $YOLOs, losing money is as much a status symbol as winning money. Both results receive group praise, expressed through emojis and memes.
The boomers and elitists are using the wrong frame to analyze what happened (and still is happening). They are using an old-world lens and an oversimplified binary. This $YOLO squeeze is just a symbol of something bigger. If you spend time on Reddit, these “kids” are on several different exchanges; Wall Street is seen as just one game. The $YOLOs have already driven up the price of Dogecoin (a cryptocurrency that was invented as a joke), dumped it (sold their holdings), and driven it back down. $YOLOs are also investing in silver, and they are sharing and learning new hacks instantly—all crowd-sourced. This is a casino, a game, and the final boss is ‘The Establishment.’ It's not Keanu vs The Machine. It’s a million (and counting) Keanus against The Machine. This is just the beginning. The elitist is using the wrong frame of reference to understand what is happening; that the GameStop squeeze was about populism, gains, etc. It’s not. This is nihilism, laugh therapy, and ‘beating the bully boss.’
Elitists are locked into the practice of perfectionism. These $YOLOs have no problem failing fast and pushing forward. They are not playing the markets in order to confirm the institutional math. What the elitists are missing is that the $YOLO’s approach to Wall Street is like that of a ‘good time’ gambler on a fun trip to the casino. The casino gambler places a million bets on the same slot, and even if they lose, they still had a good time. This is Vegas baby! YOLO!
The reality is this: amateur investors have always had certain advantages over professionals. They can invest for the long run and ignore the short term since they can’t get fired for underperformance, and they don’t have to answer to clients who give them money (or take it away) at the worst time. However, now amateur traders are asserting new advantages. Using forums like Reddit, they can communicate instantaneously, band together by the thousands—millions, perhaps—and buy or sell commission-free en masse. What does this all mean? Fundamentals matter, but don't use them to condescend a cultural moment. Some things are bigger than money, gains, and profit/loss.
It is such a common practice of men to ignore the emotions and sentiments of culture. It is also such a common practice of elitists to hide their rage and prejudice towards the common people in logic and rationalizations, expressed through "why the youth and common man will fail” rants. The establishment is quick to call something outside of their benefit "ghetto" or "vulgar" as means to discredit it. But these new approaches are far from stupid. Generally elitists go from criticizing and dismissing the ghetto to co-opting the ghetto. Ask jazz, rock & roll, hip-hop, and TikTok dances.
You could make the argument our entire existence is a scam. Why? Because the universe is chaos, and the mathematical attempts we use to try to explain it are mostly a scam. I've found that most logics are used to create a classist hierarchical structure where the person on the bottom is told thousands of rules as to why they can not do something, while the man on top can pick and choose what rules apply to him.
One thing my team & I know at MyUberLife Management Consulting is that culture always beats strategy. If you ignore the people, all your math will be wrong. There is always The Second Law of Thermodynamics at play—aka entropy, aka muda fuking chaos.
What did we learn? The fuck do I know! But for sure, what Wall Street hedge funds found out was, ‘Don't fight the thread'—the Reddit r/WallStBets thread that is. Long live the YOUTHQUAKE.
Jey Van-Sharp is a founding partner of @MyUberLife Consulting Group based in NYC. MUL offers business solutions to 'bad-ass' entrepreneurs, crazy creatives, and 'cutting-edge' companies hunting greatness & cultural impact. An Afro-Latino born in Venezuela who has spent half his life in NYC, Jey is concerned with the relation between culture, community, customer, and commerce and how that impacts business. Jey is also a founding partner and educator at WÜLF University, educating young students with business knowledge that goes beyond the classroom.