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The Last Shall Be First

January 27th, 2021 Leave a comment Go to comments

source: GameStop: History Points To A Share Price In The Thousands (NYSE:GME) | Seeking Alpha

The stock market has been on an unprecedented run to the upside over the past 4 years and it looks easy; but people should not be misled; it’s not a place for sissies. Logic doesn’t always play the most important role in determining price movements and there is no such thing as “it should go up” or “it should go down”. I won’t go into the whys and wherefores of market dynamics here; that’s a subject more suitable for people suffering from insomnia.  But there is an interesting drama being played out as we write and that is the activity surrounding a listed company named Gamestop.

Gamestop is a company whose business model is apparently going the way of the former behemoth, Blockbuster Entertainment.  It is a video game retailer which is losing money by the bucket-load due to the proliferation of online video game distribution.  Over the past while, ‘savvy’ traders, attracted by the deteriorating fundamental outlook have been shorting the stock as if the company was going to zero.  As recently as this past August, the stock was treading water at under $4 a share and seemingly destined to collapse as all the smart guys complacently anticipated their imminent demise.

Well whaddya know, due to some arcane mechanics tied to a huge short positon and the actions of some smart traders, the stock recently traded as high as $350 a share! Nothing has changed in the company, the fundamental circumstances are the same, which is to say bleak.  But….with the revived stock price, the company all of a sudden has a life due to forces beyond any internal change.

What does this remind us of?

The political version of Gamestop is Joe Biden.  Consider the fundamentals, and these are facts, not opinion:

Was caught cheating on his grades in Law school

Lied about his scholarships

Plagiarized speeches

Has been on the wrong side of every foreign policy issue in almost 50 years of being in government

Collaborated with foreign governments including China and the Ukraine

Provided cover for and exerted influence for his drug addled son.

Cannot make a coherent speech without a teleprompter

Cannot attract enough people to fill a Volkswagen van for his speeches

And….BECOMES PRESIDENT OF THE US! Joe Biden is Gamestop personified.  Some clever people have managed to take this disaster of a candidate and place him into the highest office in the world.  If nothing else, Joe Biden is a grotesque Horatio Alger story and is an inspiration for all those that have never achieved anything in their lives and have botched up everything that they’ve attempted.  In the most perverse way, Gamestop and Joe Biden demonstrate why the allure of America is so great.

The logic of both Gamestop and Joe Biden are stupefying on the surface, but as we know, process trumps logic. The takeaway from these two events is that in life, playing the game is more important than having the best cards.


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