I'm not proud to admit this, but I know virtually nothing about the stock market. I mean, I know what it is and on a very, very basic level know how it works. Kinda. Maybe. I don't even know.
That's a problem when some huge news about the stock market comes along. While clearly a big deal, this news about GameStop stock skyrocketing because a bunch of Reddit users did something and a bunch of billionaire hedge funders got screwed over by it has been a little lost of me.
I'm sure I'm not alone in this. In fact, I know I'm not, based on the virality of this "normal person" explainer video shared on Twitter. Prior to two days ago, this is pretty much exactly how I would have explained what's going on:
There are a whole lot of us who don't understand the stock market and usually don't care that we don't understand it. Then a big, important David and Goliath story like this comes along, making it clear we should know more than we do.
Part of the problem is that there's so much "inside baseball" terminology to wade through when you dive in. I graduated from college with honors, for the love, but every time I try to read a news story about this GameStop thing, I have to stop every other sentence to look up words that financial writers assume we all know and understand. (I still don't even get what a hedge fund is, much less how short selling would affect one. And WTF is a "position" in a stock market context? Zero idea.)
What I need is someone to translate all that finance-speak into layman's terms, super simply, like I'm in kindergarten. I don't need all the nitty-gritty details of exactly how it all works, I just need enough so that I "get it." I read a bunch of posts and explainer articles, some more helpful than others, but nothing has synopsized it all quite as concisely and clearly as this 3-minute video shared by Now This. Enjoy:
Okay, so I still don't know exactly what a position is, but I get the gist.
Not only does this story explain a bit about how the game of Wall Street is played, but it also helps explain how the filthy rich have managed to get filthy richer during a pandemic when millions are struggling. On one level, businesses struggling is actually good for investors as they can take advantage of the falling prices.
Pretty gross to purposefully profit off of pandemic fallout, if you ask me. But what do I know? Like I said, not much. I will say, this whole thing is a good incentive to learn more about how that part of the U.S. economic system works. Knowing that it's actually not untouchable, that it's not just elite economic geniuses who know what they're doing, that there are ways for the average person to influence wealth distribution is intriguing to say the least. And anything that makes predatory billionaires shake in their boots is good fun.
We could all benefit from greater financial literacy, especially when it's clear that the rules of the game are in flux. We'll see how it all shakes out in the end, but it seems that these Redditors may prove that David has a chance against Goliath after all.
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