The Return of Meme Stock Investing | Spencer Jakab & Andrew Left

Hidden Forces

In Episode 367 of Hidden Forces, Demetri Kofinas speaks with Spencer Jakab and Andrew Left. Jakab is an award-winning financial journalist who edits the Wall Street Journal’s “Heard on the Street” column. He is also the author of “The Revolution That Wasn't,” a book about the meme stock craze that overtook the video game retailer GameStop in 2021 and the heroes and villains, like activist short-seller Andrew Left, who made that story so captivating and powerful.

As the founder of Citron Research, Andrew famously bet against GameStop during the mania of 2021, only to get squeezed out of his position as the stock rallied to the unimaginable heights of $483 per share. Last week, amidst the excitement and uproar of Keith Gill’s anticipated return as ‘Roaring Kitty,’ the hero of Wall Street Bets and the face of the GameStop meme craze, Andrew announced that he was at it again, taking a new short position in the video game retailer, albeit at a significantly reduced size from the one he was forced to close three years ago.

Demetri devotes the episode’s first hour to recapping the GameStop meme craze and how it relates to the concept of Financial Nihilism that he developed in 2019 and about which he began publishing episodes in early 2020. He, Andrew, and Spencer discuss the role of narrative investing, the characters that make up a good financial story, and how those character archetypes come together to generate interest and excitement around a given company’s stock or crypto token in the hopes that it could lead to life-changing profits, a communal sense of belonging, and a whole lot of fun.

In the second hour, Demetri asks Andrew and Spencer if they think that this latest resurgence in the price of GameStop is a late aftershock to the 2021 meme stock mania or if it is a sign of things to come as liquidity ramps higher ahead of the 2024 election. Kofinas also asks Left about how this investment philosophy of financial nihilism has impacted the ability of activist short-sellers like him to operate, what he thinks explains this change in attitude towards the stock market among Millennials and Zoomers, and how the forces driving it are impacting our politics and society at large.

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Producer & Host: Demetri Kofinas

Editor & Engineer: Stylianos Nicolaou

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Episode Recorded on 06/12/2024