Empathy For Roaring Kitty

Was I a Degen?

Roaring Kitty is the rage in trading circles. He is “back in” Gamestop ($GME). There are people I follow on Twitter who are intelligent, and very good traders. They don’t respect Roaring Kitty and think he is bunk.

@CliffordAsness of AQR. He is a U of Chicago PhD, was wildly successful at Goldman before starting a more wildly successful hedge fund. I agree with him A LOT on markets and politics because we tend to view things from the same perspective. He is tight with Eugene Fama.

Pathetic attempt of a grifter who has never ever said anything useful about the actual value of the junk he touts trying to extend his 15 minutes of ill gotten fame instead of running and hiding with the gains he doesn’t deserve.

Early on it was possible to believe this ignorant fool wasn’t consciously milking it.

He’s now quite clearly and quite publicly leaning into his grift.

And you meme cultists will fall for it again. Enjoy the bag and the holding of it thereof.

And:

I don’t make one day forecasts, or even have strong opinions about single stocks, but I will still take a moment to note that one day after the below tweet we are -40% following earnings, the company saying “hey we need to sell a ton at these prices!”, and the ridiculous grifter roaring kitty roaring rather pathetically. Nice #moass you got there #apes.

Tim Knight of Slope of Hope is a permabear. His acid commentary on single stocks and markets is ironic and funny if you understand what’s going on. To say Tim is a cynic about everything except dogs is an understatement.

I feel myself getting stupider watching this Kitty broadcast.

So this guy is managing a half billion dollar stock position with Yahoo Finance? GME 0.00%↑

K, seriously, this guy seems like a moron.

I get it. I understand where they are coming from. At the same time, there is a part of me that will always be from the trading floor. Talk about Roaring Kitty degenerates. Bill Sheperd didn’t have a college degree, but he was the largest British Pound speculator in the world. He beat Goldman and Soros regularly.

He was and is incredibly intelligent.

Ray Cahnman had a degree from DePaul and played tennis there. He was the biggest bond spreader in the world and regularly beat all the big smart intellectually famous and pedigreed Wall Streeters who competed with him in the bond market. Tom Baldwin was the largest bond trader in the world. At least he had a graduate degree in agribusiness. There are too many to name that beat them in the S+P’s.

I saw guys who were butchers at independent grocery stores go into pits and make millions. I saw guys who were electricians, bodymen, guys who never graduated from high school go into pits and make millions of dollars.

Speak with anyone who was on any trading floor in Chicago at the three exchanges. You can hear stories about people who would be considered degenerates by polite society who traded and crushed it.

I have seen it over and over and over again. You don’t have to be a computer programmer to have success in the market these days but it helps. As a matter of fact, having an Ivy League degree is probably a hindrance to being a terrific floor trader.

The guys I know that were great were able to eliminate confirmation bias from their systems and they had no “fear gene”. Their brains were wired differently. They were like that guy who climbs mountains without a rope.

Certainly, the game has changed. On the SEC side of the market the entire playing field has been slanted to the big boys on Wall Street. Cliff would disagree with me but the way the game is played advantages the big guys.

The big guys will tell you, “We only make a penny or less per trade.” Except they do it millions and millions of times per day. It’s not charity. I was at a Stigler Center conference once and heard the chief economist of Google say that “search was really a crappy business”. Google only makes a few pennies per search. The big traders on Wall Street aren’t any different.

Sure, I think Roaring Kitty is a pump-and-dump guy. It doesn’t matter what I think. I can choose to play or not. I saw lots of pump and dumps in my day. You can trade them if you know when to get off the roller coaster. The problem is, few understand how to get on and off.

But, I have empathy for the “degens” because they weren’t invited to the white cloth table. They are sticking it in the eye of the pinstripe suit guys. Most if not all of them are trading their own money, not other people’s money. They aren’t at fancy dinners trying to get the business of some fund of funds or endowment that they went to prep school and college with.

I don’t really care that Roaring Kitty can’t make a mathematical case or even an accounting case for Gamestop. You choose to play or not to play. There are plenty of rules in the SEC rulebook already. We don’t need Congressional Hearings or new rules.

When I was standing in the pit one day and Merrill Lynch hit me on 2000 cars in the Eurodollars, then a news story was released that they found Osama Bin Laden and the market moved 10 points against me faster than you can blink your eye, should I have gotten a Congressional hearing? Of course, five minutes later, which is an eternity in the market, the Osama rumor was denied and the market rallied back and assumed it’s bullish direction. The damage to my account was done. But, I didn’t have to buy them either.

I have written this here before. When CME was going public, we interviewed bookrunners. I listened to the pitches. After one, I spoke with Bill Sheperd. I said, “All these years I thought Wall Street guys were so much smarter than me because they had these Ivy degrees and MBAs. Now I realize they are just salesmen.” Shep looked at me and said, “You are right.”

The jamokes on Wall Street that get on TV every day aren’t any smarter. They are only on TV because the station is in New York and not somewhere else. Few get on television altruistically with nothing to peddle. The dialogues remind me of the scriptwriting in the show Succession. What a totally shitty show though the acting is good because the writing is horrible.

If you want to sell on Wall Street, learn the cadence of Wall Street, dress the part, and then drop a bunch of MBA bombs into your vocabulary.

You cannot believe how hard it was to put on your trading jacket and compete against the big boys each and every day with your own money. They had millions for research. They could call up central bankers and talk to them about their golf games and whether they thought the Yen might move one way or another. Yet, thousands of guys did it on the floors of Chicago. Today, the floor is the computer and the computer is everywhere.

I’d like to see a million kitty’s roar. I’d like to see the starch come out of the collars of the Wall Streeters. They are a bit full of themselves and they give money to shit I don’t like anyway.

Free markets will take care of themselves. They are messy. They go up and down on information that gets priced in immediately. At the end of the day, they are right and the central planners are wrong.