Jaime Rogozinski, the guy of WallStreetBets, wasn’t particularly passionate about stock trading. not first, at least. Rogozinski had a side business in the middle of the 2000s that allowed him to invest about $1,000 in Google shares.
He had to pay $30 in commissions to purchase and $30 in commissions to sell, which amounted to costs eating up 6% of the deal. Rogozinski exclaims, “Wow, this is terrible. It is obvious that it works if you have a lot of money but fails if you only have $1,000.
He experimented with several trading tactics as a result. Example of a trade: Rogozinski may wager $100 on Microsoft (MSFT) in a low-probability wager with a $1,000 potential payout. Usually, these get lost. However, he once shorted Microsoft, left for lunch, and returned to his desk to see that he had made $2,000 that day.
“I made a lot of money, I thought. What in the world? It turned out that someone had hacked the Associated Press’s Twitter account and distributed a phony news report—literally, fake news—claiming that the White House had been bombed while then-President Barack Obama was inside. Markets collapsed. By pure luck, Rogozinski’s Microsoft short was a home run.
At the time, he thought, “Holy crap.” His viewpoint abruptly shifted. Traditional stock analysis based on “fundamentals” (such as earnings, expenses, and revenue) proved to be far less significant than chance occurrences like a Twitter attack, at least in the near run. How might he make use of this realization?
Rogozinski looked for an internet forum where people discussed this sort of thing. He failed to locate one. He founded WallStreetBets on Reddit after deciding on a moniker that acknowledged and even glorified the danger.
He had grown tired of hearing that stock trading is just like gambling and that Wall Street is like a casino. Rogozinski says, “Let’s just call it what it is.” Put that on our sleeves, please. The forum is kind of immunized by its name: The title clearly states the aggressive danger. Do not be misled.
We now find ourselves in the era of “yolo trades,” name-calling, and eventually, of course, the crazed madness of GameStop (GME) and AMC (AMC) and a retail trading army that would cost hedge firms $1 billion every day. According to Rogozinski, who saw the forum as a method to defend the underdog, “It was a broken system.”
After a dispute with moderators of spin-off chat rooms, Rogozinski left WallStreetBets in 2020 (“there were a handful of mods who were straight up white supremacists,” he told the Wall Street Journal). However, from his home in Mexico City, where he lives with his wife and two young children, he continues to criticize the system.
In an effort to imitate Nancy Pelosi, speaker of the House of Representatives, Rogozinski devised a humorous new fund. He wants to organize a sizable “eSports of day trading” event inside a stadium. He gladly gives novice traders advice, telling them to “get out there and lose money.” He then goes on to say why, despite not using it for trade, “I keep my money in crypto.”
If you are interested in more articles like this, here’s one about what is shorted stock.
