Trading Salience in a Hyperconnected Marketplace (Part 1)

A metaphor for my life sometimes.

The Shower Index

  1. It had to be truly random. This means, I would make sure that nothing conscious influenced my decision of a ticker. Usually this meant discarding obvious choices, and coming up with weird callouts ($TSN, $SWBI, $FNKO, $CAKE come to mind).
  2. It had to be in the shower. This was to clear my mind as much as possible, my own stress-free zone.

The Power of Narrative and the Meme

Will reach orbit faster than Virgin Galactic.
  1. A cataly-ish: This actually isn’t a required part of the narrative effect, but tends to help and provide a sense of urgency and organization. In general, humans prefer binary catalysts — events where there’s solely a positive or negative outcome. This tends to almost gamify the situation, including attracting risk-loving market participants (who tend to use the weaponized options discussed prior). However, in terms of constructing a narrative any catalyst will do, including minor (for instance, Microsoft’s supposed partnership with Gamestop — the initial catalyst for its meteoric rise) or completely fabricated ones will do.
  2. Salience: This is by far the most critical part of narrative assembly, given the force of meme as previously discussed. As an idea is rapidly transmitted through a medium and replicated, it tends to lose all but its most defining characteristics. This is why, for instance, in online echo chambers — Parler, for example — ideas tend to reduce to more extreme, basal forms, crystallizing on human emotion (in the case of conspiracy theories, distrust and anger) and captivating followers even against common sense. You don’t need rationale or evidence or even really strong due diligence if a ticker has enough salience. As a thought experiment, let’s look at the current zeitgeist (attacking stocks with high short interest).
Some random biotech company no one cares about.
That company that makes the Roombas.

Gilgamesh, Roaring Kitties, and Ryan Cohen

  • /u/DeepFuckingValue (DFV) (the Youtuber TheRoaringKitty)
  • Ryan Cohen (Former Chewy founder)
  • Melvin Capital (Long/Short Hedge Fund)
  • “Boomer” George Sherman (CEO of Gamestop)
  • The Hero: DFV, Ryan Cohen
  • The Villains: Melvin Capital, George Sherman

Assembling a Narrative

The original post from u/DeepFuckingValue, September 2019
October 2019.
April 2020.
2006 — PS3, 2014— PS4, 2016 — PS4 Pro, 2020 — PS5

--

--

--

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Making Money in the Stock Market Isn’t a Right. It’s a Skill.

Make A Long Term Commitment To Forex Trading

Make A Long Term Commitment To Forex Trading

Investing for a greater return

Finance 101 - The Ultimate Edition

Financial IQ?

Brooklynn Chandler Willy on How Covid Could Affect Retirement Planning

On Financial Literacy — A Personal Experience

Will online payday loan companies put your advance on prepaid card if your direct deposit goes…

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Nope, it's Lily

Nope, it's Lily

More from Medium

ZENITH TALKS: Crypto Volatility and Financial Management

Crypto Volatility and Financial Management

Liquid.Financial -All in One DeFi

Sol SOL Lending/Borrowing

State of Affairs: Algorithmic Trading and Retail Investors (1/2)