Every new forex trader has ‘that moment’. You know the one; you are scrolling through Instagram and there he is, some guy leaning out of a rented Lamborghini, sipping something neon from a champagne glass, and promising you can “retire by next Friday” if you just buy his $997, exclusive trading course. Of course, you’re sold, because who wouldn’t want to swap their rusty old Ford for a Lambo in just a few trading days? That’s the spark for most people: the promise of financial freedom. The idea that you can Walz into your boss’s office, hand in your resignation with a smug grin, and spend the rest of your life trading from a hammock while coconuts fall gracefully all around you. Forex is marketed as the adult version of winning the lottery, but with more charts and fewer losing tickets. There’s also the thrill factor. The forex market is the largest in the world — trillions of dollars changing hands every day. To a newbie, it feels like an exclusive VIP club where fortunes are made at the click of a button. And the entry fee? Just a couple hundred bucks and an internet connection. Sounds like a bargain compared to that yacht you’ll soon be ordering, right? Here’s the spoiler: the reality doesn’t usually involve champagne, yachts, or super cars. It involves charts, losses, and enough coffee to keep a bigfoot awake. The truth is that most of those “gurus” are making more money from selling you the idea of trading than from trading itself. Fact. Still, that said, without that spark — the dream of escaping the daily grind — most of us wouldn’t take the plunge. Just remember it’s OK to dream big but keep your expectations somewhere between “rich overnight” and “living in your mum’s spare room after blowing your first live account.” Okay, so now that I’ve crushed your Lamborghini dream, let’s talk about the positives, because there really are plenty. Forex trading isn’t all doom, gloom, and blown out accounts. If it is done right, it can be exciting, flexible, and (eventually) financially rewarding. First up, accessibility. Unlike some financial markets where you need to consider selling your left kidney to get started, forex is open to pretty much anyone with a computer, an internet connection, and a couple of spare dollars. You don’t need to be the Wolf of Wall Street or wear an Amarni suit. You can literally trade in your underpants while eating your cornflakes; and believe me, plenty of traders do just that. Then there’s the sheer size of the market. Forex is the biggest financial playground in the world, with trillions of dollars moving and changing hands every single day. That means there’s always opportunity. Stocks can go quiet, commodities can get boring, but currencies? They are like hyperactive kids after eating too much sugar; always bouncing around, giving you plenty of chances to make a move. And let’s not forget playing and learning with demo accounts. These are basically training wheels for trading. You get to practice with fake money, make every rookie mistake in the book, and still walk away with your dignity (and your actual bank balance) intact. It’s like playing a video game version of trading, except instead of shooting bad guys you’re learning why you shouldn’t put your entire account on going long on gold five minutes before a major news announcement. Forex trading is flexible. The market runs 24 hours a day, five days a week. Whether you’re a night owl, an early bird, or someone who just can’t sleep, there’s always a market open somewhere. Unlike your local bar, forex doesn’t shut at 11 p.m. So yes, there are plenty of good points. It’s accessible, it’s dynamic, and it’s always available. Just remember it’s not supposed to be easy money, but it is an opportunity if you approach it with the right mindset. Okay, so we’ve covered the warm and cosy positives. Now let’s talk about the bits nobody on Instagram likes to talk about, the dark side of forex trading. Spoiler alert: it’s not all yachts, Ferraris, and endless vacations. It’s more like caffeine-fuelled, long nights, emotional breakdowns, and wondering if you should have stuck with your steady 9-5. The first harsh reality? The learning curve is steep. Trading isn’t something you “get” overnight, no matter what that guy with the slick YouTube ad says. You can’t just watch three videos, memorize a candlestick pattern, and suddenly become Warren Buffett’s currency-trading long lost cousin. It takes time, mistakes, and more chart-watching than is healthy for your eyesight. Then there’s the emotional rollercoaster. Picture this: you’re up 50 bucks on a trade, you’re feeling like a genius, then — BOOM! — the market flips, and you’re suddenly down a $100. Your heart sinks, your palms sweat, and you start whispering sweet hail Mary’s to the trading gods. Reality check: the market doesn’t care about you or your prayers. Most new traders also learn the hard way that revenge trading is a thing. You lose money, you get mad, and you immediately jump back in with a bigger trade to “get it all back.” Reality check number two: this usually ends with you losing even faster. It’s like trying to put out a fire by throwing gasoline on it, super dramatic, but not at all very sensible. And let’s not forget the misinformation problem. Social media is full of self-proclaimed “gurus” flashing screenshots of their supposed $50,000 trades. Here’s the catch: a lot of them are making more money selling you a dream than trading themselves. If their real edge was that good, they’d be too busy compounding their millions to bother running a TikTok channel. There is an old saying; ‘do as I say, not as I do’. Most so-called gurus are fake. If you were making millions from trading, could you be that bothered to share you elite winning strategy with others? I will leave you to ponder on that one. So yes, forex has its dark side. The steep learning curve, the emotions, the misinformation — they’re all part of the package. The key isn’t avoiding these pitfalls (because you will trip over them at some point). The real key is surviving them long enough to and to learn from any mistakes you make along the way. If you’re new to forex, you’ll quickly discover the real challenge isn’t learning candlestick patterns or calculating pip values — it’s wading through the swamp of misinformation out there. The internet is bursting with self-proclaimed experts, all screaming for your attention, and most of them have the credibility of a used-car salesman with a fake Rolex. Let’s start with the obvious: The social media “gurus.” You have seen the type; they pose next to rented sports cars, flash screenshots of “$5,000 trades,” and sell you the dream of financial freedom, if you just buy their course, mentorship, or “exclusive signals.” Here’s a tip: if someone’s making more money from teaching you how to trade than from trading itself, you’re not looking at a guru, you’re looking at a marketer, and a clever one at that. Next, the signal sellers. These are the folks who promise to do all the thinking for you. Just pay them a monthly fee and they’ll tell you when to buy and when to sell. Sounds easy, right? Except most trading signals are about as reliable as the weather forecast in the UK. Sure, you might catch the occasional sunny day, but most of the time you’re left wet, cold, and wondering why you didn’t just look outside yourself. Often you have to join a private Telegram channel and sit and wait for the signals to drop in. By the time you have digested the information and put the trade on you have missed the suggested entry point and you sit and watch the trade lose. Then there’s the army of “get rich quick” content. You’ll see headlines like “Turn $100 into $10,000 in 30 Days!” and for a moment, you’ll think, “Hey, maybe that’s possible.” Trust me - It’s not. Not unless your definition of “possible” includes blowing up your account and begging your bank for forgiveness. So how do you navigate this mess? • Check credentials: Real traders don’t need to rent Lambos to prove they know what they’re doing.• Follow the money: If their income is coming from selling courses, not trading, that’s a definite red flag.• Use YOUR common sense: If it sounds too good to be true, it is. (Unless you believe in fairy’s and unicorns.)The truth is, there are legitimate sources of forex education out there; brokers’ educational hubs, established trading communities, and even boring old textbooks. They may not look as glamorous on Snapchat, but they’re far more valuable than any so-called guru promising instant riches. Here’s where most new traders get it wrong: they think “success” in forex means turning a $200 account into a private island by Christmas. Sorry to ruin the fantasy, but that’s not success, that is just a daydream. Real success in forex looks very different. It’s not about making a fortune overnight; it’s about building consistency over time. If you can grow your account steadily, month after month, without blowing it up in a moment of rage-trading, then congratulations, you are already way ahead of most newbie traders. Okay, let’s talk numbers for a second. Professional traders don’t aim for 100% returns in a week. They’re thrilled with 3–10% a month. Doesn’t sound sexy, does it? But compound that over a year, and suddenly you’re looking at serious growth. The difference is, they’re playing the long game while the Instagram guru is playing with make-believe. Success is also about risk management. A trader who makes 5% a month while sleeping soundly at night is more successful than someone doubling their account one week and wiping it out the next. If you’re constantly stressed, glued to your screen, and shouting at your laptop like it owes you money, you’re not succeeding - you are gambling! And here’s the kicker: success in forex isn’t just about money. It’s about developing the discipline to stick to your plan, the patience to wait for the right setups, and the humility to admit when you’re wrong. If you can do those three things, you’re already more “successful” than the majority of people who try trading and quit after their first blown account. So, what does success mean? Consistency, discipline, and realistic expectations. It might not look sexy on social media, but it looks fantastic in your bank account over the long term. By now you’ve probably realised that forex trading isn’t just pressing “buy” and waiting for your bank balance to explode. It takes time, practice, and a stubborn refusal to quit after the first disaster and one or after that. To help you on your way, here are some golden nuggets of wisdom, think of them as your survival kit for the wild world of forex: 1. Start small (like, really small). Don’t remortgage your house or drain your life savings for your “new trading empire.” Open a demo account, practice and then start with a micro account where you can trade tiny lot sizes. If you mess up, and you will, it’s better to lose coffee money rather than the family silver. 2. Keep a trading journal. Yes, it sounds boring, and it is. You’ll thank me later. Write down your trades, why you took them, and what happened. Over time, patterns will emerge, both in the market and in your own behaviour. Think of it as therapy, but cheaper. 3. Risk management is your best friend. Never risk more than you can afford to lose. A good rule of thumb? Risk 1–2% of your account per trade. Go past that, and you’re basically gambling with the enthusiasm of a casino regular on a losing streak. 4. Don’t copy other traders blindly. Following random signals or copying trades without understanding why is like cooking with your eyes closed. You might get something edible, but chances are it’ll be a disaster. Learn to make your own decisions. 5. Accept that losing is part of the game. Yes, you’ll lose trades. Everyone does. Even the best traders in the world take losses — the difference is, they don’t let one bad trade turn into a meltdown. Shrug it off, learn, and move on. 6. Protect your mental health. Trading can be stressful, especially if you’re staring at charts 18 hours a day. Take regular breaks. Go outside. Talk to an actual human being occasionally. The market will still be there when you get back. 7. Keep your expectations realistic. Aim for steady growth, not instant riches. Remember, doubling your account in a week usually means halving it the next.In short: be patient, be disciplined, and don’t take financial advice from someone who films TikTok’s memes in front of a rented Ferrari. So, there you have it — the good, the bad, and the occasionally ugly side of forex trading. It’s a world full of opportunity, but also full of pitfalls, myths, and far too many people praying on your hopes and dreams. If you’re starting out, the most important thing to remember is this: forex isn’t a shortcut to overnight wealth. It’s a skill. Like learning to play guitar or bake sourdough bread, it takes practice, mistakes, and probably a few embarrassing failures before you get good. The difference is, with forex the stakes are a bit higher than a badly played chord or a burnt loaf — your money is on the line. But don’t let that scare you. If you approach trading with curiosity, discipline, and a healthy sense of humour, you’ll already be ahead of most people who dive in expecting instant riches. You’ll learn to separate fact from fiction, spot the “gurus” from the marketers, and find your own rhythm in the market. And let’s be honest: it is exciting. The idea that you can sit at your desk, place a trade, and potentially profit from global events happening in real time? That is pretty amazing. But the real magic isn’t in chasing quick wins — it’s in building consistency, protecting your capital, and watching your skills improve over time. Yes, dream big but keep your feet firmly on the ground. Success in forex isn’t about buying a yacht or sipping cocktails on a beach (though hey, if you get there one day, send me a postcard). Success is about growth of your account, your mindset, and your patience. Now go on, rookie, get learning, get practising, and remember: the charts don’t lie, but social media often does.
We may be witnessing history in the making with regard to precious metals. The shocking rise in silver, platinum and palladium left many investors stunned last week, as all three metals continued their ascent, facing no resistance on their path higher. Silver closed last Friday’s session at $46 per ounce – $3 higher than the week prior – and is now up 60% since the start of the year. Meanwhile, platinum and palladium both achieved double-digit gains last week with the former now rising to prices not seen in over a decade. Precious metals are rising in unison once again this morning, with gold tapping $3,800 and silver striking $47 per ounce. A reminder that silver is now only $3 away from a new all-time high. The global pivot towards safe-haven assets is an increasingly popular trade, but only partially explains the rise in prices observed so far. On the other side of the equation, the supply side is struggling to keep up with the relentless demand. Gold and silver ETFs are soaking up huge inflows of cash from institutions and retail alike. Jewellers are reporting a scarcity of scrap gold because so few are selling in the current market. Mining companies around the world are having to increase output targets to cover the renewed demand, with many reporting record-high profits. The first Friday of the month lies ahead, but non-farm payrolls may have to wait. The US government is facing a possible shutdown unless funding legislation is passed before the end of the fiscal year on the 30th of September. As grateful as we are for the work carried out by the Bureau of Labor Statistics, its operations are considered non-essential and will therefore be affected by the shutdown unless such is averted. If NFPs are released as planned, forecasts are currently indicating 39,000 new jobs. A low figure on the face of it, but the labour force participation rate is shrinking rapidly due to huge numbers of workers reaching retirement age. Unemployment is expected to remain at 4.3%. Tomorrow’s JOLT survey on the other hand should be published in a timely manner with or without a government shutdown and may offer some emergency insights on the US labour market. Wednesday’s ADP employment change will likewise be unaffected by any disruption to federal operations. Wednesday also marks the start of China’s Golden Week, meaning Chinese markets will remain closed until the 8th of October. Beyond American employment figures, this week features a heavy dose of manufacturing and services PMIs from the four corners of the world, while the Reserve Bank of Australia convenes tomorrow to decide the interest rate on the Australian dollar. For now, all eyes are on precious metals. #Gold #Silver #Palladium
Investors shunned gold yesterday, turning instead towards the wider precious metals market. Industrial demand is driving the likes of silver, platinum, palladium and copper to highs not seen in months, or in some cases, years. Silver is an essential element for solar panels, batteries and other electronics, while platinum is crucial for systems such as catalytic converters, used to reduce emissions. Given their critical role in green energy technologies, both metals exploded to the upside yesterday following an announcement from Chinese Premier Xi Jinping, who pledged new green energy targets for the world’s second-largest economy. Silver pushed past $45 per ounce on Thursday, meaning it only has another $5 to go before setting a new, all-time record high. Meanwhile, platinum gained over 3% over the same time frame to close comfortably above $1,500 an ounce, matching prices from back in 2013. Palladium and copper are also on the front foot this week, with the former up 9% since Monday. Second-quarter GDP figures were revised to the upside yesterday, indicating that the US economy grew by 3.8% in Q2, surpassing initial estimates of just 3%. The correction was mostly due to a revision in consumer spending as opposed to any rebalancing of trade flows. Yesterday also revealed better-than-expected jobless claims, an improved trade balance and higher durable goods orders. Strong growth figures obviously counter the narrative of a troubled economy, which in turn temper the Fed’s willingness to intervene too drastically during the next couple of FOMC meetings. Interest rate traders are still leaning in favour of a further 50 basis points in cuts before the end of the year but FedWatch is currently only pointing to a 60% chance of that happening. The combined data led to a strong move in the dollar, which dragged the DXY back up to the mid-98 level by yesterday’s close. The shift in expectations contributed to a broad selloff in assets, with US and European indices ceding ground during yesterday’s session and Asian stock markets reacting poorly this morning. The selloff extended to cryptocurrencies, leading to Bitcoin falling below $110k and Ethereum losing $4,000. Expectations could shift again later today however, with the release of the latest PCE Price Index and Michigan Consumer Sentiment. The PCE data has long been held in high regard by the Fed and so any unexpected reading will have further consequences for interest rate predictions. Busy end to the week. #Silver #Platinum #USD
After hitting record intra-day highs on Tuesday, US indices were quickly brought back down to reality after Chairman Powell suggested that by many measures, equity prices were “fairly highly valued”. Not the harshest of judgements by any means, but stocks had been looking for an excuse to come down from recent highs and Powell’s speech seemed to fit the bill. The Fed Chairman hastened to add that this is "not a time of elevated financial stability risks". Futures contracts are marginally in the black going into today’s session. Powell’s words also reached the ears of precious metals traders, cutting short yesterday’s rallies in gold and silver. Gold came within $10 of $3,800 before giving up some of its gains, while silver closed the day almost flat, although crucially remained above $44 per ounce. With nowhere else to go, the recent gains in gold and silver are currently spilling over into other metals, namely platinum and palladium. Platinum rose over 4% yesterday to breach $1,500 for the first time since 2014 and both metals continued to surge in early morning trading in Asia. The current climate heavily favours precious metals as central banks around the world continue to move away from US treasuries. Given the lower rates on the USD, and the prospect of even lower rates in the near future, hoarding dollars now makes less sense than at previous times. With stock markets at record highs, precious metals are seen as the obvious play by many investors. Cryptocurrencies on the other hand are facing a bit of a conundrum. The massive liquidation event on Monday culminated in over $1.5 billion in bullish positions being wiped out, but despite the selloff, prices have shown surprising resilience. The larger caps have incurred only modest losses so far but the overall direction of travel remains unclear. The rise in prices seen across cryptocurrencies over the summer was fuelled in large part by firms publicly launching digital-asset treasuries. Michael Saylor’s Strategy acquired another 850 BTC on Monday, bumping the company’s holdings up to a colossal 640,000 BTC. Japan’s Metaplanet meanwhile purchased 5,419 BTC at the start of the week, making the company the fifth largest corporate Bitcoin holder with 25,555 BTC in its war chest. Funds far and wide continue to top up their stacks with various digital assets, the obvious question being how the sustained buying pressure will translate into price action. #Platinum #Crypto
The story of the beleaguered video game retailer is one for the history books. In many ways, the famous short squeeze that occurred back in early 2021 changed the game forever. A success story no doubt, but not one without its fallen victims. The GME squeeze unveils much about the shadowy nature of institutional finance, while the underlying movement betrays the darker side of investment psychology. What is GameStop? Under its current name, GameStop has been around since 1999. The company was ideally situated to capture the growth of the video games industry, expanding massively throughout the early 2000s. Hard to believe for the younger generations out there but back in the old days, if people wanted to buy a book, film or video game, they would actually have to walk into a shop and purchase a physical copy. In North America, GameStop became the go-to place for consoles, games and various collectables. It was also home to a thriving second-hand marketplace, from which the company profited enormously. It was nerd heaven. Alas, all good things must come to an end. As with many businesses that depended heavily on in-store traffic, the company suffered greatly from the advent of online commerce. Steam, the digital distributor for PC games, officially went live in 2003 and prompted the likes of Sony and Microsoft to open online stores of their own. It would take a while, but by around 2015, the scales would permanently tip in favour of digital sales and would never again favour physical media. The COVID years would accelerate the process even further and by 2023, it was estimated that over 80% of all video game sales were exclusively digital in nature. Just as Amazon crushed brick-and-mortar bookshops and online streaming services destroyed Blockbuster, digital video game sales had a disastrous impact on GameStop and other video game retailers. The setup In 2002, GameStop was listed on the New York Stock Exchange under the ticker GME. The stock fared well initially, but later on prices would start to reflect the company’s financial struggles, with shares falling to lows of $0.70 in 2020. Understandable, given the underlying fundamentals, but the price action was not entirely organic. By late 2020, GameStop was one of the most shorted stocks on the market, with over 100% of its float being shorted. This meant that more shares were being shorted than were actually available for trading – a particularly risky position for those who were short on the stock. This fact did not escape the attention of the subreddit /wallstreetbets, which discovered that investment firm Melvin Capital, among others, were heavily involved. The internet smelled blood. Our beloved video game store being exploited for financial gain by cold-hearted hedge funds? Not on our watch. Before long, a plan to force a short squeeze on the stock began to take shape. As a reminder, a short squeeze occurs when the price of an asset rises sharply, forcing those who are shorting to cover their positions in order to avoid getting margin called. This creates more buying pressure, which drives the price to higher levels still, forcing yet more parties to cover their shorts, and so on and so forth, culminating in a drastic increase in price. The squeeze The idea was an easy sell. Soon enough, investment communities from the four corners of the internet came together to stick it to the man. Users on Wall Street Bets and further afield started buying GME shares and call options in increasingly high volumes. The high short interest and low float made the stock ripe for the taking. Buy pressure began to mount. From a price perspective, things kicked off in earnest on Wednesday the 13th of January 2021. GME opened the day at $20.44 and peaked at an intra-day high of $38.64 per share. Commendable, but a mere taste of what was to come. By the 25th of January, GME had breached the $100 mark. Now people were really paying attention. Institutional money had a stake in this game and at this point, it was on the wrong side of the trade. Incredibly, hitting three figures was just the beginning. The buying pressure was relentless. The frenzy continued for another few days until the 28th of January, when GameStop hit $483 per share intra-day and even surpassed $500 in pre-market extended trading. A 2000% gain in a couple of weeks. It was a staggering achievement. Melvin Capital The short squeeze would ultimately be ruinous for Melvin Capital. The fund was forced to close its position and by the end of January, it had lost over 50% of its assets. Other hedge funds, including Citadel, would attempt to bail out the firm with a multi-billion-dollar injection of cash but the effort proved to be in vain. Melvin Capital lingered on for a couple more years, but the deathblow had been dealt. In 2022, the fund announced its permanent closure and returned all remaining funds to its investors. The battle was over and the underdog had won. A fairy-tale finish on the face of it, but there is much more to this story than meets the eye. Robinhood and the DTCC A major character in this story, not mentioned until now, is the trading platform Robinhood. With its wide array of commission-free trading options, Robinhood has grown massively over the years and played a pivotal role in the GameStop short squeeze. The platform was the perfect tool to attract retail interest to the movement and users flocked to it in droves to buy GME stock. The massive surge in buying pressure would not have been possible without Robinhood. With that said, the platform is equally responsible for the sharp decline in GME following the $483 peak. On the 28th of January, Robinhood restricted trading on GME and its customers were barred from buying any more shares. Users could only sell the shares already in their possession. The reason Robinhood did this is because they were facing a $3 billion margin call from the Depository Trust & Clearing Corporation (DTCC). When trading stocks, it is important to understand that simply hitting the buy or sell button does not result in an immediate swap of ownership. A better way of viewing the trade is that the broker, in this case Robinhood, temporarily attributes the stock to a new user and then passes this information on to the DTCC, which settles everything in the background. At the time of the GME squeeze, this process took two working days (as of last year, it now only takes one). This is an entirely standard practice and allows for a much more fluid user experience. The DTCC is a critical piece of settlement infrastructure, without which modern trading would look very different. Because of the lag between the broker and the DTCC, brokers have to meet certain margin requirements, as per financial regulations. During the time of the short squeeze, the extreme volatility in GME stock combined with unprecedented buying pressure created massive margin demands from the DTCC, which Robinhood was temporarily unable to match. To address this, Robinhood paused the buying of GME shares and drew on existing credit lines to raise billions in emergency funding. Such measures take time. The company would resume full trading a few days later, but by then the damage had been done. Without having access to Robinhood’s books, the justification given does in fact appear to be valid, but try telling that to those who bought at $400+. Many a bag holder was created that day. Things get even juicier when considering that Citadel Securities was acting as a market maker for Robinhood, handling a significant portion of the platform’s order flow. Does the name ring a bell? Citadel was one of the hedge funds that bailed out Melvin Capital to prevent it from defaulting following the squeeze. The waters become increasingly murky. Given the above, it is easy to see why the halt in trading was seen as a way of screwing over retail investors in favour of institutional hedge funds such as Melvin Capital and Citadel. As for why Citadel tried to bail out Melvin Capital, the explanation given essentially boils down to containment. As intertwined as such players are, stopping one domino from falling prevents wider contagion. So the story goes. An investigation was conducted, but to no one’s surprise, no evidence of wrongdoing was unearthed. A hundred arguments could be made either way on this case. Perhaps a more neutral way of looking at these events is that while the likes of Robinhood, Melvin and Citadel did nothing technically wrong, the opaque and incestuous nature of institutional finance leaves retail with an unwinnable battle. If only some kind of transparent blockchain-based clearing system could be implemented. Wouldn’t that be nice. Forgotten remnants The story should probably have ended there, but it did not. Despite the obvious success of the short squeeze, for some, it was not enough. For the die-hard enthusiasts, Robinhood’s controversial actions had doused the fire, which should have raged on to the destruction of far greater players. Justice had not been served. Almost five years after it all kicked off, there persists a community of investors resolutely committed to the movement. Many within this community believe that the real short squeeze has not yet occurred. The events of January 2021 were just a warm-up. The mother of all short squeezes, or MOASS as it is often called, patiently bides its time. It is certainly the case that the actions of Robinhood cut the run short. It is also true that short interest on the stock remains high – around 16% at the time of writing. Unfortunately, this is where the rational argument ends and the darker side of investment psychology takes over. The sad truth of the matter is that many GME investors are underwater and have been for some time, which inevitably promotes the deadly sunken cost fallacy. Investors continue to hold onto a losing position because they have already poured significant time, money and energy into it. With every passing day, it becomes harder to let go. Fear sets in but results in no action. Valid concerns are waved away. The communities persist, but the hype gradually fades. Those who remain become increasingly less vocal. An inconvenient truth is that over the last four years, most GME investors would have been better off parking their funds in the S&P 500. For some, commitment to the cause trumps any notion of financial gain. They are in the movement because they genuinely believe in the cause. The anti-establishment sentiment is more than enough for many people, which is absolutely fair enough. More generally, the online culture that has developed over the years now constitutes a familiar, meme-rich environment that investors far and wide proudly call home. GameStop is not alone in this regard. A number of other stocks have acquired devotees of their own, such as Bed Bath and Beyond (BBBY) and AMC Entertainment (AMC). GameStop’s legacy The events surrounding GameStop had a lasting impact on the financial world. In many ways, the GME short squeeze represented a shift in market power from traditional hedge funds to retail investors. Current situation aside, the fact remains that the GameStop community won and Melvin Capital lost. As retail investors gain ever more powerful tools and as markets become ever more transparent, one wonders how many more GME events we will see in the future. On a dourer note, dedication to a company and its stock price seems like light-hearted fun on the face of it, but runs the risk of turning into something far more worrisome. The biggest problem with remaining steadfastly committed to a given stock is the opportunity cost of doing so. Sticking to a singular asset cuts an investor off from every other opportunity. Unwavering devotion is a noble trait in many circles, but arguably not in financial ones. Do not marry your bags. Footnote: GameStop executed a 4-for-1 stock split in 2022, meaning all the prices discussed above would need to be divided by four to reach the current pricing.
Autumn is officially here and Q4 is just around the corner. The summer months have been undeniably kind to stock markets, particularly in the US and in Asia. Last Friday saw the Dow, S&P 500 and Nasdaq all close at record highs, with the latter in particular closing the week 2.2% in the black. The Nikkei 225 proved eager to preserve the momentum this morning in Japan, pumping over 1% before traders even had a chance to sit down for lunch. US futures markets fell slightly on Sunday night, but sentiment going into this week is largely neutral. Although last week’s Fed decision had been heavily priced in, markets were still grateful for the reassurance. By all accounts, rate cuts are set to continue at a slow and steady pace, which suits most investors just fine. Future rate cuts play into the hands of precious metals, which continued to exhibit strong buying pressure last Friday. Gold gained over 1% on the day to close the week at $3,684 per ounce, but the real action is currently unfolding in the silver markets. The white metal gained a massive 3% on Friday to break through $43 per ounce and wasted no time this morning in pushing even higher. Silver is already half way to $44 and is inching ever closer to a record high of its own. Unfortunately for crypto holders, the bullishness in precious metals is not spilling over into digital assets. Cryptocurrencies are currently undergoing massive liquidations across the board, with Bitcoin dipping below $112k as billions worth of positions are getting wiped out. An absolute bloodbath is unfolding in the broader altcoin market, with some projects boasting double-digit losses. Nothing to speak of on the economic calendar today, although a number of FOMC members are set to deliver speeches throughout the day, including newly-appointed board governor Stephen Miran. Tuesday brings us more Fed talk, this time from Chairman Powell himself, as well as manufacturing and services PMIs from Australia, Europe, the US and then Japan late at night. The Swiss National Bank is expected to hold rates steady on the Swiss Franc at 0% on Thursday before US GDP data drops later in the day. Finally, Friday will see the release of the latest PCE Price Index – a key marker for US inflation – followed by Michigan Consumer Sentiment to close out the week. #Silver #Crypto #StockMarket
