YouSaid · the spoken record

Spencer Jakab

lines on the record: 135
first: 2022-07-08
most recent: 2022-07-08
sittings or episodes: 1
sources: podcast

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“But at the same time, as we'll see later, he's got that, you know, he's cool and young and used 33, 34 during this episode. And the point at which he became really super influential, the one of the most followed people on the planet, basically, for a couple of weeks, he wasn't posting any kind of analysis. He was like, he became the hero briefly of this whole movement.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“Totally. And I think I would not be surprised if this guy shows up one day, five years, ten years, maybe not even that long, you know, managing some kind of value fund, just sort of like a kind of a hip. Warren Buffett or something because he really has that way of thinking. First of all, obviously, he has analytical chops by having had a CFA, not maybe not Buffett-like, but he certainly knows what he's talking about. But he just has that kind of unusual way of looking at things and inverting things that you need for success.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“Totally. And so people are like, what's wrong with you? Like, you should sell. This is like a stroke of luck. And it's not how he viewed it at all, which is a very rare form of thinking. So he, I think, like.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“He thought Right. And most people, I mean, 99.9% of people on this board would be like, I bought these options. And now I've doubled my money because the stock went up because Michael Burry shows up, who was played by Christian Bale. That's what most people think of Christian picture of Christian Bale instead of Michael Burry himself. At the drum set in”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I'll tell you, this is interesting too because I won't say the entire name, but it's DFV, is deep effing value. So value is part of his moniker. And he was upset. He said, thanks a lot, Burry, for jacking up my cost bases. Because, well, he said, now it's going to be more expensive to buy more.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, exactly the valuation guru at NYU. No, these kids know who that was or cared, you know, right? I mean, and so he was just basically sort of, you know, it was like a tree falling in the woods. I mean, some people were like, you know, sometimes he would make money and they'd say, hey, you should sell. I'm like, no, no, no. And then he'd lose half of it. And people were following. I said, wow, what an idiot. For the money that you lost, I could have done this and that. You could have bought a GameStop franchise. Yeah, so he invested $53,000 of his money. He's not a rich guy at all. He was working. He didn't say anything about himself, by the way. And I think had he said this, he probably would have had less influence. He's a charter financial analyst, which was a difficult qualification to get sure.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“You want a textbook example of not how not to influence people online. And that's it because he was cerebral, he was polite. People would kind of make fun of him. He said, Well, that's not the way I think about it because behavioral finance dictates that blah, blah, blah. And as I follow the teachings of Aswwatha Madarana and whatever. Stuff like that. Now, no one knows who he is.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“Yep, YOLO. You only live once. So he is a really, really fascinating character, an unusual character. And one of the interesting things is, let me tell you that, I mean, of course, his whole history is there to be seen. But for 90% of this story, he's there in the background doing these videos, four-hour, five-hour long videos talking about the stock and talking about investing, making these posts, responding to people who mainly made fun of him on this message board. Like a lot, he took a lot of heat. And he was unusual in a lot of ways on this forum, Wall Street bets. One thing is he wrote in complete sentences. The other is like he was... I mean, you might not think it's”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“Of make themselves look good basically. It wasn't to get new customers. Their ads were all touchy feely. You were born an investor. I never thought I could do this. And the people they show in their ads were not the typical lucrative customers they had either. They were mainly female, a few older people. It was young males primarily. And the thing is most of their customers, they don't make money on, but there's a subset on which they make a lot of money. And so those are the people they're trying to get. It was young risk-seeking maybe not too wise men. And as a father of three young men, I can, I know what I'm talking about. And so that's when you had the explosion during the pandemic. And you had all this volatility, which was just addictive. It was like crack cocaine. You couldn't stop. And then in the year from the pandemic bear market bottom to a year after,”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“All told the average payback period was five months for that investment. That's amazing. So they didn't really need to have advertisements and their advertisements were really kind of to.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and if you were 23 years old and you had been, let's say, working maybe. You're sitting there looking at your phone for 12 hours a day, and you're looking at social media. All of a sudden, all these new social media people are popping up talking about stocks, the stock market. There's this whole rise of influencers. And so you go and, you know, your buddy tells you to open up a Robinhood account. And you open up a Robinhood account because he already has a Robinhood account and he'll got a free share of stock when he opened it and he'll get another free share of stock mystery. It's like a sweepstakes because it could be a $2 stock, but it could possibly be a $50 stock, right? You don't know. It's like a, you know. I mean, it's like a”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“And they were like, why do we wait so long to do this? This is great. They were all just gushing about how smart they were to do this, even though they had held off on doing it for a while. And then that was late 2019. Then what happened in early 2020 is you had the pandemic. And the pandemic was just the perfect thing to kick off the speculative excess. Of course, you'd had free money for many years, basically. You'd had zero cost.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“Totally. And it's the same thing as think about when you're a few years old in the mean so you'll remember like if you had to call somebody long distance. I mean my family my parents are immigrants and we had relatives far away and I remember like you know the very rare occasion they would spring for a phone call like everyone had to be lined up next to the phone and you got your you know your one minute on the phone and then hand the phone to the next person and then it was like oh they're tearing their hair out about how much it would cost now calling anyone in the world anywhere is free and so people do it all the time you know they do it way way way more than if it just costs a tiny amount of money because there's no cost to it there's no incremental cost to it right and”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“People will go crazy. It'll explode. And that's specifically fun things. And so you don't think about buying a stock as a fun thing. But Robinhood made it fun.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“Only up to a point, but there's a special kind of product where people, once you go from costing something, doesn't matter how little to nothing.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“And they thought that it would cost them money, and it made them money because you had an explosion in trading activity as a result of everyone going to zero. And so there's a psychological concept that's not appreciated. I mean, you have you learn all about elasticity of demand and you learn that when things get cheaper, people will desire more of it, but it depends what kind of thing it is.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. Yeah. That would be the smarter thing to do. Not that their customers always did the smarter thing, but we'll get into that later. But yeah, so in late 2019, every other broker said, well, screw this. If you can't beat them, then join them. And for a Schwab or a fidelity that has much wealthier customers, they sell all kinds of services that Robinhood doesn't, they're like, well, we're going to lose some money on this, but we have to match them. And it shows you how dumb they were because they all were wringing their hands about cutting their commissions to zero. It was no longer the bulk of the money they made anyway. But it was still a pretty nice chunk of change for them.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“And your first brokerage account, and it costs $75 to get out, to sort of move your account to somewhere else. Well, you don't do $41.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“Howard will have video. He was kind of a dummy about it too because he was smart enough to invest. But then he was dumb enough to say, guys, this is a great app. You should charge like a dollar or two dollars for it. Like people will pay that, which was totally wrong. Because the fact that, and so”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, not in dollar value because they were tinies. The median value of those accounts was two hundred forty one dollars, which is peanuts But the number of accounts, that's something I would love to go into what made Robin Hood possible, okay? Because there are some changes there.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“Playing Daily Fantasy Sports. They had the apps already, the fan duel, DraftKings, and what have you on their phones? And all of a sudden they were actually gambling. There's a legal distinction between daily fantasy sports and gambling gambling. It's the only type of sports that negatively correlates with age. Is sports gambling? Then, totally, everything else is the older you are, the more likely you are to play slots and things like that, but not this. Then you had in late 2019, so you had a five-year period when half of the new brokerage accounts opened in the US were opened by Robin Hood, which is a tiny broker. Even then that point.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, it's so interesting because several things had to happen really all at once for this to happen. And so I trace that and I explained the social forces because I think that's, I mean, that's how you tell the whole story. And it's very interesting. But it's also how you understand what it means going forward. And I want, and I hope that there are lessons in the book for people who invest, people who invest their own money. people on Wall Street to take away from this, to understand how it happened. Not that it's going to happen exactly this way again because, as I said, it was a perfect storm. But you have to go back to 2018 when you had sports gambling legalized outside of Vegas in most of the US. And so you had all these young, mainly men.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“The difference is that private companies understand psychology too. They have psychologists who work for them. They have social psychologists to work for them. And the same people who go into a Vegas casino and there are no clocks on the wall. There are no windows. People are bringing you drinks. The same people who designed sports gambling apps and things like that designed social media and designed the brokerage apps that these young people were using to access this. And they induced all kinds of, they just put these speculative tendencies on steroids basically is what they did. Social media and the investing apps together on the same device, on your smartphone, being used by the same people.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“Totally. And I went into this with that echoing in my head. I go into everything with that echoing in my head whenever there's a crash or mania or panic that people, human psychology is basically unchanged since Paleolithic times. And so the way that we react to something financially is never good, but it's always very similar. So history rhymes. Doesn't repeat, but it rhymes. That's the reason. It's the way that our brains are wired. But this was different. And tell us, tell us.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“So you've heard it, it's a cliche by now, but it is true, more or less, that the foremost dangerous words in investing are this time as different, right? And that's something I'm a real student of financial history. John Temple.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, it's a gamma squeeze. And most of these kids, well, very few of these kids know what a gamma squeeze was, but it was all explained there. I was reading all about it on the board. I don't think they were breaking the law because they're talking about it openly.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. And if you take at that point there were about 1.9 million people on the forum by the end of the next month there were 11 million people so they quadrupled in four days the number of people in this forum because it just became people got so excited by it and so that though Those people individually may not have had a lot of money, but they did two things. First of all, there are a lot of them and they all rushed in in the same way into the same stocks, especially GameStop. And also people were telling them, hey, if you want to get real bang for your buck, Don't even buy the stock, buy way out of the money call options on the stock. And then the options dealers will have to basically, as it goes up, they'll have to buy and they'll buy a lot more than the money that you put down.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“And not sell and then buy options too, which forces further buying buy options dealers. So it was this trap. There's this thing that you can't really do, as you know, Barry. Like you can't legally. Not legally, right?”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“They're talking about it on Wall Street bets, and I've seen this dozens of times before it's a kind of a flash in the pan, and I really wouldn't hang on to long. And what kind of got my attention was he said, No, he's not going to sell. He can't sell. So, what do you mean he can't sell? And so I started reading the board, and I was like, oh my God, they're executing a corner on this stock. So they all sort of agreed online to buy as much as they could.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“This kid who I've known since he was as tall as my knee had bought it and I took a look and said, well, he's doubled his money in the last two days. Maybe he should sell.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“Totally, totally. And that's the problem. That's why it had been losing money for years. That's why it found itself at the center of the story. The book is not really about GameStop, and people always ask me about don't you think this, don't you think that about GameStop? Like, I can talk to you about GameStop, but that's not really the interesting thing here. The interesting thing is this unprecedented thing that made it the most traded security in the world for a while, the most search term in the world for a while, and from just total obscurity. And I said, no, why? And a friend of mine.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“You're going to write something about GameStop. And, you know, so GameStop, they're all into video games. I've driven them there lots of times. They were going there less and less over time, which is a problem with GameStop as a business. Right, it's in a moral.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“It's like jackass for finance. That's what it is. It's like, you know, you do crazy stuff on there and you show off crazy stuff. And I don't know if a lot of the crazy stuff actually ever happens because you can't tell. People are using pseudonyms, but they were all over that. And my oldest boy, he's not 23, he was a college senior when this happened, came over and he said, dad.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“So I have three sons, and two of them are very online. They're all online, but two of them are very online. They are on Reddit all the time. And they were on this forum on Reddit called Wall Street Bets, which was at the epicenter of this story. And the people on this forum, it's an investing forum, but not really an investing forum. There's a different investing forum on Reddit called R Investing. This is our Wall Street Betts. Which is an entirely different speculation.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source
“It's crazy, right? It lends itself to a book. And I knew that right away when the story began to unfold. I sent an email. I had a three-quarters written book proposal about something else, sitting at home during the pandemic, and wrote an email to the acquisitions editor at Penguin Random House, person I don't even know or didn't know then. And when I saw this story begin to unfold, I first article had not been written about it. One of my sons brought it to my attention.”
2022-07-08 · Masters in Business · Spencer Jakab on the Death of Meme Stocks · IDENTIFIED FROM THE TRANSCRIPT · source