Bursasells: Malaysian Gamestop Story

How did the nerds created a revolution?

Stole the photo from New Straits Times Malaysia…

To those that are interested in finance, trading, stock exchanges or general knowledge about the economy and business, would have come across the story of the nerds whipping the wolves of the wall street and teaching them invaluable lesson, people’s power can over “throne” (punt intended) the kings.

On the wave of the Wallstreetsell local Malaysians have gathered just about 5k traders in support of the local businesses and “teach” a lesson to foreign investors on shorting Malaysian companies.

I love the story and that they got the 5k people to start buying rubber glove producing companies as they saw the stock was plummeting at the back of the vaccine news, meaning less gloves would be bought out.

I applaud them for their initiative and love and support for their country and fellow businesses, ofcourse, the short gain in shares of those companies have shown but the overall exposure of the national stock exchange has still fallen.

The problem that I see here, the people just act upon the fun stories from other places and without understanding of what the mechanism are and how it actually works, also the largest difference is that on the American Stock Exchanges the day traders are sitting from all around the world and when there is a wave it could become a tsunami, where in the likes of Malaysian Stock Exchanges it is barely exposed across South East Asia let alone the world.

The other point to make here, the misunderstanding of the “news” and the reality, the news makes the money on the back of the traffic which is usually made of click-bait stories with no real consequences for what they tell, and the unfortunate reality, people may act or trade based on this news.

There is an old saying, buy on rumours sell on facts, where here the news does not necessarily represents the facts just a mere never ending chase of “ratings” against their rivals.

Going back to the point of BursaSells, the guys have shown great initiative and have probably made a bit of money but if they really want to make an impact they should educate themselves further on how to the proper trading and make themselves and their friends and families more aware of the financial structure, how the mechanics work and the impacts that they may have.

At the end of the day, whatever the share price of the company may be, since it is the secondary trading, it does not actually matter to the bottom of the companies income as the trading on the exchange is determined by the market value in the eyes of the traders rather than what the underlying income is…

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