Paired with the echo chamber effect voting systems create. Anything that affirms the biases of a majority of upvoters gets elevated, anything that contradicts it gets hidden, and so you not infrequently end up with ubiquitous nonsense that then further reinforces the echo chamber as they become self assured. Then real life intervenes, completely goes against the online zeitgeist, and they're all confused.
Not necessarily. WSB users are trying to make it big, which means betting on long shots. This could be penny stocks, companies on the verge of bankruptcy, or ones with more sentimental value than fundamentals.
Betting against these companies is obvious and expected, so the cost of shorting might be high enough that even if you’re correct (stock goes down, the opposition of what WSB said), paying the cost of the short (the fee to borrow the stock from someone else) is high enough that you still lose money.
Also:
1. shorting stocks can be quite dangerous. Your downside is, well, not infinite but it can easily wipe you out.
2. You might be correct that the stock goes down, but over what time frame? Again, you have to pay money to hold a short. Or you’re using a different financial instrument that has a specific timeline. If the market does move in your direction but too late, you still lose.
Just because one action is demonstrably harmful does not mean its negation is automatically beneficial.
Or, formally, my claim is A implies B. The only logical contrapositive is non B implies non A. (not losing money means not following advices on r/wallstreetbets)
But you say: non A implies non B, which is the fallacy of denying the antecedent.
The truth was so obvious I didn't bother to find data before doing the opposite: most of their posts are: "I'm going/went all-in, high-leverage on this moonshot! And...its gone." I've successfully applied the opposite approach and invested safe amounts in a broad portfolio and it is going pretty well (or was before this whole Iran thing).
