Hey everybody. Through a friend of a friend, I had the chance to speak with one of the moderators of WallStreetBets subreddit on Sunday evening. I was able to verify his identity, but for privacy reasons I only refer to him as WallStreetBets Mod in this interview.
Instead of writing up a nice neat summary, and taking more time in getting the info out there, I figured, screw it, lets just get it out.
So here she be in audio form and transcribed if you hate yourself and want to read it all ;) Enjoy.
@Vaughan: [00:00:00] WallStreetBets Mod, thanks for joining me today. My understanding is there are multiple moderators over at WallStreetBets. Well, my question is, how did you become a moderator of WallStreetBets?
WSB Mod: [00:00:12] So I started going on Reddit maybe about a year ago or so.
Originally it was just because I'd like to talk about stocks and I think my friends had enough of it. They were tired of hearing about it. I really got into dollar cost averaging and really trying to understand how you can utilize that to the full advantage. I wanted to see what other people said. You can go on the Internet and Google search all you want, but I mean, interacting with someone, you get a much more in-depth answer.
I believe that no matter what you think, if you have a thought that comes into your mind, there's no way you're the first person. I believe that's impossible. You can't be the first person to ever think of something. I took that thought and I was like, OK, well, if I'm thinking this, there has to be probably potentially lots of other people thinking that. And of course, there are.
First, I was going on the stocks Reddit page and just asking questions, answering people's questions. So I just kept going on and on and on every day like I was just check. And I noticed there was a lot of newer people and they were kind of looking for something that was fairly simple to do but that had structure behind it. I was mostly focused around dollar cost averaging, but that was kind of like just the back of it.
WSB eventually just saw me commenting on all the stuff and giving people real advice rather than just saying buy the stock was like giving a real structured strategy kind of approach. And I think the person who invited me and they asked me a question, I just said I'm just doing this because I care. I have nothing to gain from this. I don't care to sell anything to anyone. I find I learn more when I talk to somebody, even for myself. That's kind of how that started. then I made a new username and and then from then I just been the one of the moderators.
There's about 50 mods. So unlike your site, where it seems like you're the only one which that could be a lot of work because it's actually very difficult to sift through, especially when you have a live chat.
@Vaughan: [00:02:07] Moderating CEO.CA Is a big task, but luckily the community helps me by flagging offensive posts and anything that I should be paying attention to. With 50 moderators of the WallStreetBets subreddit that celebrated. Is it difficult to manage moderation tasks?
WSB Mod: [00:02:24] For WallStreetBets, what I really liked about it, is that it's the whole, like, central idea that no one's really like above anybody else. I think we all follow the exact same rules which are on the Reddit page. If you were to go to the Reddit page and just leave out, there's a bunch of rules. There's content guidelines, no market manipulation, no poppadoms schemes, crypto, no political stuff.no SPACs,
People for the most part, follow that. We don't really get very often someone trying to say some nonsense.
@Vaughan: [00:02:54] This leads me to my next question being let's talk about mainstream media and how they're covering you guys. They're describing us essentially stimulus check wielding amateur investors trading out of their parents basements. Just speaking to you for a couple of minutes so far, I get the impression that that is not the actual makeup of your community.
So as far as you can tell, what is the actual makeup?
WSB Mod: [00:03:20] The media is right and wrong. Like if you went on the page maybe about two or three months ago, it was just kids losing like 20 grand on a trade. And it's like I'm buying an option trade that's going to expire in four days. Let's just see what happens. This is so dumb. It might just work. And sometimes it does work and people hit a four hundred percent gain and no time. And for the most part, it was just kids lose a lot of money and maybe not even stimulus checks.
The stimulus check obviously helped write that kind of change that people got a little bit smarter. I saw a lot of a lot of kids, 18, 19, come on on there. They're like, I haven't even started college yet. I took my stimy check in paying for college through it.
WSB Mod: [00:03:58] Just like this nonsense right now is a lot of the traders. And I kind of like that. That was kind of something I really enjoyed about it. Maybe you're taking a bit of a risk, but a lot of people have a fear to that. I mean, at a very young age to be able to break out of that and say, you know what, this is just money. I'm not going to treat it like it's more than that. This is a tool that I can use. And if I lose it all, I understand that. But some people are willing to go against the odds. Right.
@Vaughan: [00:04:21] But what did it evolve into?
WSB Mod: [00:04:23] It seems like now that it's like just a fucking city of people and it does have a mob feel like everybody's like we are not selling GME, which I agree with. But I also like to hear new ideas. Actually, today, someone brought up a pretty good point about Bed, Bath and Beyond. And also, you know what? I agree with you. And then a lot of people are downvoting this guy. Just because he's not talking about GameStop doesn't mean it's a bad idea. Right like that. That's beyond would be the next shorted business. And I understand why he's looking at it.
@Vaughan: [00:04:50] Yeah, I would suggest that the mob mentality isn't unique to your site. Any time you get a critical mass of people online, especially if there's money involved that things can get out of hand pretty quick.
WSB Mod: [00:05:03] 100% Yeah, and I noticed a lot of people don't want to lose any money, which obviously I respect and understand. But that has taken away a little bit. A lot of people are like, this is a Yodle play. And even if you look at the fucking value, I think one day he lost 14 million and everyone's thinking this guy had to be selling and also that he's still sticking it out. And I think that's what everybody's like "This is diamond hands.
WSB Mod: [00:05:23] I'm not fucking selling!" Like a lot of people say, if you sell it, I'm still in.
WSB Mod: [00:05:28] And which is good or bad. I like the community, but it also has made basically a mob.
@Vaughan: [00:05:33] Yeah, that's something to keep an eye on for sure. Naysayers have been pointing out that at some point the GME short squeeze trade will need to unwind, causing a rush to the exits and a bunch of regular people holding the deflated GME bag.
@Vaughan: [00:05:47] Have users been sharing their take on this issue? And if it comes to pass as being described by the mainstream media, do you think the Wall Street community will survive it?
WSB Mod: [00:05:58] I think for the most part, everybody thinks there's going to be some sort of like buyout since the short position is over one hundred percent, which I'm not sure how that would work, actually, because I've never really heard of that. This is a very unique situation that I feel like there's a lot of underlying players don't really understand why someone would ever open a short position over one hundred percent. I don't get why someone would put that vulnerability on themselves.
WSB Mod: [00:06:22] I think everyone is just kind of banking on that. Personally, I'm waiting to see if it happens. I'm an O.G. WallStreetBet, I'll fucking lose my annual salary on this shit. I don't give a fuck, but I know a lot of other people will.
WSB Mod: [00:06:33] And yeah, there's a potential of lots of people becoming a bag holder to a buyout, which a lot of people are kind of betting on.
WSB Mod: [00:06:40] And there's seems to be a lot of overoptimism. Pretty much everyone on there saying do not buy this with money you're not willing to fully lose. If you aren't willing to go down one hundred percent, then what are you really doing? Like go to something smart. Don't be like this.
WSB Mod: [00:06:55] With any squeeze that's ever happened, the price goes back to normal and everything returns. Whether or not if that's going to be a buyout of some sort where the hedge fund actually does go bankrupt and they need to pay back these shares to people that are holding or whether or not there was some illegal activity where there was fake shares created. And then again, you would be able to sue and get some sort of buyout. Those have been fantastic. If not, I mean, it's been a whirlwind.
@Vaughan: [00:07:20] So I gotta ask you, have you taken any risk off the table?
WSB Mod: [00:07:25] Nah man.
@Vaughan: [00:07:25] So you put money in and it's all still riding?!
WSB Mod: [00:07:28] Yeah. Yeah, of course. AMC, BlackBerry. I'm deep in this shit.
@Vaughan: [00:07:32] Right on.
WSB Mod: [00:07:33] I'm not a complete smooth brained idiot that's running around that just happened to win a few times. And I'm like "A Ha Ha Ha!", like a crazy lunatic.
WSB Mod: [00:07:40] I mean, my original buys were all profits anyway, so.
@Vaughan: [00:07:42] Well if you were around for the twenty seventeen crypto madness...
WSB Mod: [00:07:45] Yeah. For sure.Even the weed stocks, you know, a lot of people are hitting for like a month straight.
@Vaughan: [00:07:52] So CEO.CA users Look at all these types of stocks. When I first found the site back in 2016. I bought shares in Canopy Growth for around two dollars and that stock rocketed to eighty dollars plus I believe. Those are the types of high risk, high reward stocks we cover over at the CEO.CA And the investors over my way to live by the mantra "If you can't afford to lose it, don't put it in". When gains like that materialize, I can understand that emotions get the better of investors and it can become quite overwhelming.
WSB Mod: [00:08:27] Yeah, for a lot of people. A lot of people don't come from very wealthy backgrounds, which I'm very proud of. I don't really come from a very wealthy background. I had kind of a hard time, and especially at first when you first start winning. I remember with these weed stocks, I took my account - It was near canopy growth and all those stocks - I took my account from about five hundred bucks and I think within the year I grew to about thirteen grand. And then from there you really start getting this confidence, which I believe obviously helps. But it could be to a downfall because I ended up losing all that thirteen grand eventually.
@Vaughan: [00:09:00] Yeah. You caught the bug.
WSB Mod: [00:09:01] Yeah.
@Vaughan: [00:09:01] You caught the speculation bug. That's what happened to me.
WSB Mod: [00:09:05] But I don't just stick with the small caps. I mean, I can clearly understand why someone would. That is very interesting. I like to look for value. You brought up the Covid thing before, thing and I was actually thinking of tech at the time. I remember I was looking into Microsoft in 2018 and I thought based on the other tech companies, Microsoft, probably one of the most heavily watched companies, was actually undervalued. From there I believe I'm up somewhere near 75% on that.Obviously it's not the small cap kind of gains...
@Vaughan: [00:09:33] Well it's Microsoft. Many people would say that's real value you're holding there. So it makes sense.
WSB Mod: [00:09:38] Yeah. And so that's kind of what I look for. It makes it a lot harder because then you're looking at a very broad market.
@Vaughan: [00:09:43] For sure. Over a CEO.CA Where I'm the moderator. Our community focuses mostly on micro-cap stocks based in Canada, like I said, such as metal exploration and mining companies. Sites like Zerohedge who have been following the WallStreetBets story in detail are suggesting that the community may turn its sights on the silver market. CEO.CA users are well familiar with the proven manipulation that takes place in the silver market, and it's been perpetrated by some of the biggest banks around the world. Have you been seeing a lot of chatter about a silver trade, or is it really taboo to be talking about other things outside of GME at the moment?
WSB Mod: [00:10:22] So on the actual page, I haven't seen a lot, but there is a Discord chat for people who are a little bit more interested and there's been a lot of silver talk, which actually has been pretty much the whole weekend looking into. Personally, if someone brought up silver about a month ago, I probably would have just ignored it, wouldn't be interested in something like that.But then I started looking into it. I did notice that I saw somewhere they're talking about they do have to cover some sort of production numbers, which would be different than the short squeeze. I don't really, I need to look into it a lot more to really fully grasp it.
WSB Mod: [00:10:53] But I have seen a fair amount of talk about it and people are fairly confident. And then I started checking the charts. I mean, it looks like there's a wedge and you guys are basically just sitting right above resistance. And Monday would be the back test day. I'll probably buy if it stays above. I'm looking at that. Twenty four. Ninety nine will do a little bit more research obviously before just buying something. But based on the chart that looks pretty good. Obviously you like to see hype and volume.
@Vaughan: [00:11:22] Silver is a very small market, if you look at its total market cap. I just read an article from a bullion dealer who was saying they aren't taking any more orders and that they're going to have a backlog in filling the orders they already do have.
WSB Mod: [00:11:37] And I notice that that you have the hashtag silver going. In my personal opinion you could be just some guy on the street, butif you got an idea, I'm going to probably listen to it right now. I don't really care where someone comes from. If you have something wrong with it. I really like that.
@Vaughan: [00:11:52] Well, if your users are interested in knowing more about silver and silver trade, my guys are fanatic's. Come on over, there are an open book to tell you all about it. Now, some of our users are silver bugs, so silver can never do wrong in their books, but we do have a lot of other investors from big fund managers to company CEOs right down to little guys. But they're all fairly educated on this matter.
@Vaughan: [00:12:22] Some of these guys make some pretty compelling arguments for what could happen if we see a true silver squeeze. But of course, we need to see the follow through, and that's what we're all waiting for, I guess. If generalist investors joined the investors on my site in the trade, it could become something to behold.
WSB Mod: [00:12:42] For sure. Well, there's the initial thought that "this is this", we have this based on this idea. Then there's a tick to actually bring in some people and say, OK, well, "that is right". And then you need a wave, just a volume wave to actually really spike it like you want if you want to squeeze.
WSB Mod: [00:12:58] I have a question, though. I'm assuming you have a slightly older target market. How do you get that older generation on the Internet like that?
@Vaughan: [00:13:04] Well, yeah, that's the story of CEO.CA, essentially. I'll give props to Tommy Humphries, the site owner and creator, right off the top. He recognised about a decade ago now that there was already a community of investors who were interested in the space, many of whom were older. That's just the nature of the space. He decided to create a platform online for these guys to communicate and share their information and their thoughts on different ideas.
@Vaughan: [00:13:39] When he created it, it was really at the bottom of the market, so originally it was very smart peopl talking to each other and keeping each other company in the bottom of a bear market in commodities. But as commodities started getting more exciting and as marijuana stocks started taking off, crypto stocks, etc, the community kept growing and growing and getting younger and younger. We find ourselves today breaking records every month in terms of growth. But the older cohort of our user base, we're already there because they were interested in the market.
WSB Mod: [00:14:19] That's probably the hardest people to get online and actually give their real opinion. Younger guys are happy to tell all the info they know. Older people keep that to the chest.That's pretty impressive.
@Vaughan: [00:14:30] Where I'm allowed. I do point out to the community who people are, as long as the users are OK with it. Sometimes you have people badmouthing a user because of his opinion and they don't realize that the guy behind the handle is probably one of the leading specialists on that issue in the world. So they should probably consider what he's saying.
WSB Mod: [00:14:55] This is the same with the WallStreetBets. at first it would be some guy saying his opinion and he's like, you know what, I'm giving my opinion based on what I know from before. WallStreetBets style is I give my opinion based on where I put my money! I may not know if I'm right but that's where my money is.
WSB Mod: [00:15:10] Before all this hype, it used to be everyone showed holdings or you were banned. You were gone. Now it's not like that anymore. Everybody is just saying "Oh I've made a million dollars", but originally people had to post their buys and their current holdings.
@Vaughan: [00:15:27] Well, that's an issue that all social media sites are dealing with, especially when they're dealing with money. The potential for boiler room activity is real, and so people have to come into it with a certain healthy dose of skepticism. There are of course limits on what we can ask of our users in terms of personal information and we take privacy very seriously over at our site.
@Vaughan: [00:15:55] How many users are you guys now over WallStreetBets? I think I heard a number around eight million?
WSB Mod: [00:16:02] I think seven. I'm not too sure, to be honest.
@Vaughan: [00:16:05] Well, either way, many millions of people. So people need to understand what that means.
WSB Mod: [00:16:11] I understand there's a level of security, too, right? Once there was a New York Times article where they mentioned by a username, and once that kind of happened, I started getting some fairly sketchy messages, just people proving they know who I am. And I mean, there's nothing you can do with that info. So, congratulations. But when you said "hey, I've made X amount of dollars, here it is my bank account", and here's a photo to prove that. That might have not been the best idea in hindsight.
@Vaughan: [00:16:38] Yeah, I hear you. The vitriol that flows online is impressive. It's like drinking water from a fire hose when you find yourself in its path. So I fully understand your desire to keep your identity private.
WSB Mod: [00:16:56] I mean, you hit the money there. I mean, that the perfect way to put it. Try to drink water from a firehose. Its just a wave of people. You're like " oh, my goodness, oh, no. What did I say?" ha.
@Vaughan: [00:17:08] What did I do? What did I say? I'm going to get cancelled!
WSB Mod: [00:17:11] When this first started happening. That's what we are worried about. We were like "oh, shit, what did we just do?" We were right about GME. That was a fact. We thought the media was going to hate us. I was about to sell my shares and basically hold it, so that if I got sued, I would have money to pay my lawyer. That's what I was thinking.
WSB Mod: [00:17:31] I don't know why for some reason the media decided they liked Reddit. And that was that was a pretty big shock.
@Vaughan: [00:17:36] Right. That actually leads me to an interesting question. Someone was asking me earlier where I think the line is between sharing ideas and actual collusion. Are you guys worried that someone might try to come after you and claim that there was some type of collusion?
WSB Mod: [00:17:54] I don't think anymore. I think we were more concerned because we didn't really know what we were doing on the back end. When you get into SEC, that's a whole different world that a lot of people never bothered looking into it all. So, to answer your first question there: There is a lot of transparency on this site. I don't really know of any secret talks that are like "hey, we're doing this and we're not going to tell people until we are all in it... and THEN we're going to tell people" There's nothing like that. At least that I know of.
WSB Mod: [00:18:21] I would hope there's nothing like that because I really like that idea of an open concept free market that everybody can access and understand. I really like that and I would hate to see that idea just disappear.
@Vaughan: [00:18:35] How did your users live the whole trading restrictions issue with all these brokerages restricting trading of GME and other stocks that you guys were interested in? Robin Hood being the one that was talked about most in the media, but other trading houses were doing it as well is my understanding.
WSB Mod: [00:18:53] With the Robin Hood thing, to be honest, it hurt the price that one day. But I think that actually really helped us out in the long run because that there was a second level of this whole thing that I think if that didn't happen, this would have been dead by now. But since that controversy came in, it just brought it where to where this is about making money. Some people are like "No, this is what's sticking it to the man now, we got demand. People learned who was behind RobinHood. Why it was free. A lot of people didn't really understand how they just be selling stocks for free, and now they know.
WSB Mod: [00:19:27] To me it's worth paying the ten bucks a trade, I don't want my info to get out.
@Vaughan: [00:19:34] Well, most people don't realize the. Robin Hood is a data broker. The service that they provide users to be able to trade online is only a way to entice them to the platform to get their data. I cracked a joke on the site the other day about RobinHood and in their goal of democratizing financial markets, they take away free choice of the users of their platform.
WSB Mod: [00:19:57] I would agree with that. I don't know if you ever used it or bought shares on it. When you buy on there, it has like little confetti that pops up. Why make this seem like a casino?
WSB Mod: [00:20:06] They're like, "Congratulations!". If you're a long term investor. Yes, congratulations on taking that step and investing. But most people using Robinhood are there because it's free, so I'm going to guarantee you're not holding that for more than a year.
WSB Mod: [00:20:22] I think RobinHood only really helps us actually. That was our saving grace where you had this flood of people that concluded this is bad and this is real, and there's a lot of bad people behind it that are very sketchy. Some are just after them, a lot of people don't really care about the money . A lot of people do care about money, but a lot care about this too.
@Vaughan: [00:20:38] It's almost a movement that's been born from it.
WSB Mod: [00:20:43] I told that to my parents. I remember talking it near Christmas time. I told them I'm moderating this page on Reddit and right now we're currently the fifth largest holder of GameStop. One one person there said "GameStop: that's a stupid idea".
WSB Mod: [00:21:08] Then maybe about a month later I told them "by the way, that that paid off very well". I was up fairly large, about maybe 2200%. They were saying "you've got to sell this." Like I said before, this is all profit that I made from some other trades, so I'm gonna let this ride. I can't really be suggesting to other people to not sell their trades either and saying no, hold, hold and then sell myself. I think that would be really shitty to do.
WSB Mod: [00:21:38] So I thought to myself, when everyone started telling people to hold on I asked myself what am I going to do? Am I going to sell or am I going to go with this? I decided I'm going to run with it. The worst thing happens, its just money. The best thing happens, we change the way Wall Street is run. I feel like that might be a small price to pay.
@Vaughan: [00:21:57] One thing I see a lot of is people asking the question "what are the reforms that WallStreetBets are looking for?" "Are they trying to ban short selling from the market entirely?"
[00:22:11] There are people pointing out it's a it's a valid tool in the price discovery of any stock or commodity that we have out there.
WSB Mod: [00:22:19] Short selling was the problem. I believe the problem was massive short selling to the point where you're just intentionally driving a business out of business, not to correct the price. You're taking these massive positions, hoping the company is going to go flat under. Then on top of that, you're creating news stories and actively going out there to diminish these businesses.
@Vaughan: [00:22:41] Just going out there and doing whatever it takes to make money, legit or not.
WSB Mod: [00:22:46] I think with this GameStop situation, that was the case. Obviously not every short selling situation in that case. I think Covid may not have helped either. If you were a short seller, covid was the golden opportunity, which also kind of backfired on the tech shorts. I know a lot of people who are short on tech at that time that really backfired there.
WSB Mod: [00:23:03] But I think you're right. I don't think anyone thought they would ever get this far. So there was never like, OK, well, what do we do now? And I, I remember on Friday, everyone said "OK, well, what are we doing? Everyone thinks we're about to change everything. Someone needs to take charge of this". But then that would defer from the idea that no one is in charge.
@Vaughan: [00:23:21] Right.
WSB Mod: [00:23:23] With every single movement there's been, like if you look at every recent social movement, its very similar. I like the idea that no one's taking charge, but eventually someone needs to say, "hey, this is a decentralized area, Run free" I guess, I don't know ...
@Vaughan: [00:23:37] To be continued, right?
WSB Mod: [00:23:38] Yeah, yeah, yeah.
@Vaughan: [00:23:40] Well, if nothing else, I can say everybody over at my site will be following along and watching the progress if they're not in the trade alongside with you. It's not just people who are interested in financial markets who are watching this stuff either. I've had at least four conversations with regular people who don't really care about financial markets, and they're all talking about GameStop and what you guys are doing over there now.
@Vaughan: [00:24:05] The conclusion they all seem to come to is "Well, it's always been this way. It's always been a rigged system." What they find funny is that when the hedge funds do it, it's business as usual, but when WallStreetBets does it, everybody starts freaking out and the system shuts down.
WSB Mod: [00:24:25] I couldn't agree more. There was a guy and he started posting about it. I know for a fact, at least when I knew him, I don't think he really cared about the stuff. I mean that as no disrespect to this guy but I love the fact that he's going out there and he was trying to show other people what is going on. So not only a few captivated the mind of someone who didn't really care at first, but he's also trying to do that. And there's a compounding effect, which I think is the greatest possible thing.
WSB Mod: [00:24:55] My personal belief is that every person in the economy or whatever economy you're in should be invested in the economy as well. I don't think it should be just for wealthier people. I think even if, say, one hundred bucks, you're still in it. And that starts with education. I think that's probably the best thing that's come from it.
@Vaughan: [00:25:13] Well, it's been a crazy ride to watch so far. And if you don't mind, I'm going to reach back out to you in a month or so or whenever it is that this story kind of comes to a head. Find out how you did? What you did with your money? If you still have it? If you got more of it? What's the deal?
WSB Mod: [00:25:29] Yeah by then, I'll probably have a lot more sleep, so I'll be able to give you a smarter answer than just "fuck it" ha. For right now. I'm with you too, see where it goes.
WSB Mod: [00:25:44] If in a month we're talking and I say "hey, I lost my money" you know, so be it. The market's changed somehow. Beautiful. So be it.
@Vaughan: [00:25:55] Again, thanks for doing this, man, and good luck with the trade. Yeah, of course. Yeah, no problem. Any time.