For a long time, the theory of investing was “buy what you know.” You’d go to the mall, notice a massive line at the pretzel stand, and think, "Ah, people are buying pretzels, I should buy their stock." Or, your neighbour would say they were working him to the bone at the widget factory, and you’d think, bullish for widgets, and buy widget stock. It was a simpler time. You were doing research, but, mostly by accident.

Then the finance industry arrived with mutual funds. This was basically a guy in a nice suit saying, “I am much smarter than you. Give me your money, and I’ll pick stocks better than you can, for a 2% fee.” And for a while, people were like, sure, because suits were expensive and their office had frosted glass.

But, through time, people started realizing that the mutual fund guy was basically just buying a handful of well known top stocks, but charging you 2% for the privilege. To solve this, ETFs (which did the same thing for less fees) were invented and trillions of dollars fled to them. This undercut the value of paying a guy in a suit to guess which stocks would go up. Rude!

Over time, buying and holding ETFs became deeply boring for the modern investor. Your portfolio crept up in a slow, responsible way with nothing exciting ever happening. No drama. No story. No “I knew it.” Just… slow compounding.

Buying an ETF and not looking at it for thirty years was the mathematically correct way to live your life, but it denied people a core psychological need: the deep, burning desire to feel something. The thrill of knowing a secret. The rush of being the person who “saw it coming.” The smug little warmth of thinking, “I know a guy at the widget factory.”

Alas, around 2020, we entered the era of hyper-empowered self-directed trading: zero-commission apps, confetti animations, Twitter, and a firehose of professional-grade market data that made normal people think, “Why would I pay an expert when I can do this myself?” Investors started to realize they could find the secrets themselves.

The Bots Are Here

And that carries on to today, but now we’re seeing the start of the next shift: AI-enabled trading.

Academics recently1 fed 33 years of trading data into AI, and it successfully predicted 71% of human portfolio managers’ trades.

This is kind of..offensive? Imagine finding out your well-researched trade ideas backed by years of education are now largely replicated by a free ChatGPT subscription.

This is pointing to what will happen in the very near future. Soon, you’ll open a chat window and say,

“I want to take on a terrifying amount of risk to capture a tiny profit, please trade for me.”

And the AI will do it. Instantly. Cheaply. Possibly for free.

This will result in a market made of millions of AI robots instantly pricing in everything: earnings, rate hikes, geopolitics, weather, politics. If an earthquake hits Chile, four milliseconds later a million AI models will quietly adjust the price of copper by exactly $0.0143.

The market will become flawlessly efficient. Probably too efficient.

But the academics noted a funny twist. What about the 29% of trades the AI couldn’t predict? Those were the ones that actually generated the outperformance. The edge on these? It wasn’t in the math, it was the mysterious edge of a human having a “weird feeling” and trading entirely on a hunch.

So, if machines are perfectly optimizing the math, maybe the only remaining edge is doing something that makes absolutely no mathematical sense: driving out to the local shopping mall, looking around to see which stores are busy, noticing a massive line at the pretzel stand, and thinking, “Ah, people are buying pretzels.”

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Nobody comes to the stock market to be average. They come to beat it. And to beat it, investors are always searching for an Edge.

Which is why, if you want to commit crimes against investors, the first thing you do is sell them an Edge. You can’t promise “market returns” because market returns are boring and available to everyone for free. Scammers have to sell the idea that the rules apply to everyone else, but not to you.

If you’re buying a sketchy token called “SuperMoonRocket,” you understand—or should understand—that you’re in the Wild West. Losing everything is a real possibility.

Scammers know this. So their problem is not the scam, it’s the venue. To really sell the scam, you need a place that implies safety. You need a boutique. You need the NASDAQ.

A Short Theory on Expensive Signals

If you buy a watch at a certified Rolex boutique, you pay a bit extra. You are not just paying for the watch. You are paying for the assurance that the watch is real. The boutique has high rent and fancy lighting and staff who judge your shoes. All of this is an expensive signal that they are not going to sell you a fake watch.

The stock market is supposed to be that boutique. Specifically, the NASDAQ is supposed to be a very nice boutique.

When a company lists on the NASDAQ, the market assumes that because the company went through the NASDAQ listing process, sent paperwork to the SEC, and hired an underwriter, it likely (1) exists, (2) has real money, and (3) is not a fraud.

The most efficient scam, then, is to rent the NASDAQ’s reputation so your fake feels real.

The Modern Pump-and-Dump

The classic “pump-and-dump” has migrated from the penny stock back alleys to the NASDAQ. The playbook is simple. Scammers take a tiny, often foreign-based company, find a small US underwriter willing to take it public. They list it. And once it has that magical ticker symbol, they unleash the promotions.

But, instead of getting old school cold calls from a boiler room, you get added to a WhatsApp group.

The scammers send out innocuous and generic investing wisdom full of profound Warren Buffet quotes, building trust over time. Eventually, they drop the pitch: “Are you ready for the Edge?”

The companies they do this with are delightful:

• Cuprina Holdings: A Singaporean firm with $76,000 in revenue that treats chronic wounds using medical leeches and maggots.

• Charming Medical: A Hong Kong company specializing in “womb warming and pelvic detoxes.”

• CCH Holdings: A Malaysian chain of chicken claypot restaurants.

I want to be clear that I am not an expert in the valuation of medical leeches. Perhaps “womb warming” is the next AI? Either way, CCH Holdings was valued at $5 million and briefly hit a $300 million valuation during a WhatsApp promotion before collapsing more than 80% the next day. Charming Medical surged from $4 to $29, then crashed.

The Psychology of the Edge

These companies are not the next Google. But they don’t have to be. They just need to be on the NASDAQ, which signals: “It’s okay, the adults have checked the paperwork.”

The "adults," however, have an incentive problem. NASDAQ collects listing fees. The underwriter can earn hundreds of thousands of dollars to conduct "due diligence," which in this world means "checking that the staples are in the correct corner and that the fee has cleared."

These works because the stock is real. You can look these companies up on your phone and trade them how you trade everything else. No back alley.

In the last two years, about $16 billion has vaporized in these schemes. The SEC is suspending stocks, FINRA is investigating underwriters, and NASDAQ wants them out. But enforcement is hard. The scammers are anonymous and overseas, the companies move jurisdictions, and the money is moved before anyone notices.

The scam isn’t that these companies are hiding their secrets. The filings you will definitely not read are right there! The companies will tell you that they have zero revenue, a questionable relationship with a maggot farm, and a high probability of going to zero.

None of that matters. The scammers are betting on two pillars of human nature that have worked for the last 100 years:

1. Your trust in "The System" is stronger than your ability to read a balance sheet. The scam is the realization that regulators don't actually stop companies from being a disaster; they just require them to disclose that they are a disaster.

2. Your desire to be “in on it” overrides the part of your brain that knows chicken-pot restaurants shouldn't be worth $300 million.

The Edge is not informational or financial; it’s emotional. You are not buying a stock. You are buying the brief, intoxicating belief that the market has finally made room for your exceptionalism.

One way to do this is to sell more Things. But that is hard because it requires finding customers who want your Things. The easier way is to just spend less money making those Things.

If a public company says, “We have found a way to save $80 million per year,” that is considered good. Maybe the stock price goes up and everyone sends each other congratulatory emails that say things like “nice execution” and “strong discipline.”

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This is all very normal. Shareholders love savings. Especially from boring, abstract places, like renegotiating cloud contracts or switching from La Croix to tap water or cancelling the company pickleball league.

But sometimes you save the money by firing humans.

Usually, companies use a specific cursed dialect of Corporate English to obscure this. They talk about “headcount efficiencies” or “macro headwinds,” framing layoffs as a weather event that sadly struck the office rather than a choice they made. This language is designed to 1) annoy me, and 2) allow shareholders to enjoy the $80 million without thinking too hard about the people who can no longer afford their mortgage.

And then there is Angi Inc. ($ANGI).

Last week, ANGI basically said:

we fired people because AI made them unnecessary, and we’re saving $80 million a year because of it.

This announcement hit harder than most. ‘We replaced people with machines’ forced shareholders to awkwardly confront capitalism in a way that “macroeconomic headwinds” does not.

ANGI’s move was a product decision. Someone bought AI. Someone ran a pilot and said, “Yeah, this works, we can fire Dave.”

As a proponent of plain-language disclosures, I applaud the bluntness. But it puts shareholders in a weird spot.

On one hand, deleting 350 salaries is an excellent way to maximize profits. On the other, shareholders hate feeling like villains. They want the "efficiency," but they want it wrapped in an abstract narrative about "global synergies."

So now companies are in a strange PR position where they have to explain that the layoffs are, actually, good news, and very cool for profits, and also totally aligned with long-term growth, and also we deeply value our people, many of whom we just fired.

Which is not an easy narrative to land.

Because in pure finance terms, $80 million in savings is extremely bullish.
Cutting hundreds of high-salary roles and replacing them with cheaper robots is the dream scenario for shareholder returns.

And we are going to keep doing this. A lot.

Not because companies are evil, but because companies are really good at doing things that make them more profitable.

And investors are incapable of not rewarding that behaviour.

But culturally, we have not quite figured out how to emotionally process the idea that “great quarter” and “hundreds of people lost their jobs to machines” can now be the same sentence.

What now? Well, we’ll spend a few quarters wringing our hands about the ethics of AI-related unemployment, while simultaneously bidding up the companies that are best at it.

This is how economic revolutions usually happen. When cars replaced horses, no one held a press conference to apologize to the stable hands. The new system was cheaper, faster, and scaled better—so it won.

Anyway, congrats on the profits.

Sorry about the humans.

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And the fantasy is very important, because without it you are just a normal person buying ETFs and replying ‘sounds good!’ to emails that do not, in fact, sound good.

And so people keep trying to find that fantasy. Usually, that means scrolling the internet to find other people’s guesses about other people’s guesses, and buying stocks based on that.

Sometimes it works and you feel like a professional trader for a day. Often it does not, and you lose a little money. But the fantasy survives, because the fantasy is more fun than the math.

Most of the market is just people guessing and calling it strategy. But occasionally the market produces trades that are so specific, so timed, and so concentrated that they don’t feel like people chasing a fantasy. This is where watching weird options trades starts getting interesting.

First, a short lesson on what options are.

Options: Using Taylor Swift Instead of Math

Think of a stock like a Taylor Swift ticket. You can buy it. You can sell it. It just sits there being a thing you own.

An option is not the ticket. An option is a digital contract that says, “Later, if you feel like it, you can buy this ticket for a price we agree on now.” You are not committing to buying the ticket (yet). You are committing to the right to decide whether you want to later on.

So, suppose tickets are $100 today. You think they might be $200 later, because everything involving Taylor Swift eventually becomes chaos. But you also think she might add more shows and prices might fall and then you will feel extremely silly paying $100 for something everyone else is buying for $60.

Instead of buying the ticket, you pay someone $10 for the option to buy it for $100 anytime this month. They are thrilled. If you don’t want the ticket, they keep the $10. If you buy, they get $100 plus your $10 fee.

You are also thrilled, because now you get to wait and see. If tickets go to $200, great, you buy for $100, sell for $200, and your $10 gamble turns into profit. If prices drop, you shrug, don’t buy the ticket, and you are only out the $10.

Three Mostly Legal Reasons People Trade Options

Options exist because the future is annoying and people would like to have opinions about it without putting all their money behind those opinions.

Broadly, there are three types of people who trade options:

• Maybe you are an airline or a pension fund or a very serious institution with a spreadsheet and you own a lot of stock. You buy options as insurance so one bad headline does not ruin your whole month. This is not sexy, but it is how you stay in business.

• Retail traders like options because they are cheap in a very psychologically dangerous way: instead of needing thousands of dollars to buy stock, you can spend a few hundred dollars for a chance at a very large payoff.

• And then there are people who actually do know what will happen to a stock very soon, in the extremely illegal sense. Options are great for that, because they turn inside information into profits with very little upfront cash.

Which is why, when you see a big options trade appear out of nowhere, it’s worth looking at.

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Minutes before the market closed on January 6, someone made a very confident bet on Monte Rosa Therapeutics, a small biotech company that you have definitely never heard of.

They spent about $200,000 on options that expired in 11 days, which is not a “long-term believer in science” trade so much as a “something is happening ASAP” trade.

This was several times more activity than the stock usually sees, all piled in at once, right before the bell, near when the company said it was about to release drug trial results. Which is, as coincidences go, extremely convenient.

Hours later, the company reported positive data showing its inflammation-targeting drug candidate produced strong early results. The next morning, the stock jumped 45%.

And that $200,000 bet very quickly turned into over a million dollars, overnight. The kind of fantasy return that makes people briefly believe in destiny, manifestation, and possibly scoring an Eras Tour ticket.

When Guessing Starts Looking Like Knowing

Now, does this prove someone committed extremely ambitious and maybe obvious securities fraud? No. Markets are weird, and sometimes people guess right in extremely dramatic fashion.

Most of the time, there is no Someone™. There are just a lot of people buying Taylor Swift tickets and hoping resale prices go up.

But every now and then, Someone™ buys a very specific ticket to a very specific show right before the curtain goes up.

And that is when the whole fantasy stops being cute and starts being useful. Because instead of chasing rumours, you can just look at the trades themselves.

Options data is public. And because of that, the market is occasionally telling you exactly where the loudest, most confident bets are being placed. Next time, instead of doomscrolling Twitter or watching some analyst on TV, pay attention to the easily overlooked options trade that could actually mean something.

You probably won't ever meet that Someone™. But you do not actually need to find them. You just need to notice when someone suddenly bought front-row Taylor Swift tickets before Ticketmaster even listed the tickets.

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Young people are reckless. They’re day-trading. They’re buying options. They’re gambling on crypto. They’re treating the stock market like a casino.

That take usually comes from people who grew up in a very different system.

In that system, wealth accumulation was slow, boring, and—crucially—predictable.

You worked.
You saved a little.
You bought a house and invested some money.
Your company maybe gave you a pension.
Your house appreciated while you slept.
Your retirement grew at the same pace as time itself.

Stock-market “investing” mostly meant owning mutual funds. Mutual funds meant not thinking very hard. If you were feeling adventurous, you bought a blue-chip company you recognized from a television commercial and checked the price twice a year.

That generation didn’t exactly participate in markets. They stood near them.

And it worked.

Not perfectly. Not brilliantly. But adequately.

Then We Changed the System

Quietly, things changed.

Wages decoupled from expenses. Housing became affordable only for those who already had houses. Savings accounts became something you used to avoid falling behind, not to get ahead.

At the same time, the culture of work changed.

Jobs used to move on tracks. You joined, you learned, you advanced. Loyalty meant something because time itself did some of the work. Tenure and pensions were everything.

Careers no longer move on tracks. They move in episodes. Projects replace paths. Tenure is no longer rewarded by default. In fact, staying at the same company for a lifetime is now viewed as risky.

Doing everything “right” no longer leads to gradual progress. It leads to treading water.

Everyone still knows the rules.
They just no longer lead where they used to.

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The Timeline Problem

If you are 27, the problem isn’t a lack of discipline, it’s a lack of a viable timeline.

The “sensible” long-term plan—investing in 5% compounding dividend stocks—might buy you a condo at 55 if everything goes perfectly.

So, the question has shifted from “What is the optimal 40-year strategy?” to “Where do my decisions show up on a timeline I can actually see?”

In this new reality, waiting is the greatest risk:

• Waiting for a promotion that may never come.

• Waiting for savings to grow while prices sprint away.

• Waiting for AI to potentially replace your role.

Immediate Feedback Beats Uncertain Promises

Young people are doing something that looks reckless if you’re still living in the old system: they’re participating.

• They pour money into the markets.

• They day trade.

• They speculate.

• They buy options.

Participation, it turns out, is highly motivating when other paths offer a “reward” that is no longer rewarding.

This is why young people aren’t “investing” in the passive, set-and-forget sense.

In markets, you make a decision, you take risk, and you get feedback. Quickly. Sometimes brutally. Even if the odds are bad. Even if the house has an edge. Even if most people lose.

But the feedback is real, and it is yours. You aren’t waiting for a middle manager to approve your promotion or hoping the housing market cools off before you’re 60.

Young people aren’t rejecting patience. They’re responding to a world where patience no longer guarantees progress.

Why This Isn’t Gambling

Social media will tell you young people are chasing Lambos. They’re not.

They’re chasing access.

To housing.
To time.
To something that feels like forward motion.

If you grew up in the old system, this behaviour looks irrational.

Why take high-risk bets?
Why risk losing money you “should” be investing responsibly?

If the reward for decades of discipline is maybe being comfortable at 65, it’s not hard to see why young people would rather take a small chance at changing their situation sooner.

From the outside, this looks speculative. From the inside, it’s about agency: choosing a chance of moving forward over the certainty of standing still.

Young people aren’t confused about the odds.
They’re confused about the point of waiting.

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Ownership was personal. It came with familiarity and a feeling of involvement.

Then the world went digital, and everything went public.

The stock market stopped being a small club and became a giant machine that sells fractional ownership in tens of thousands of companies you will never use, never visit, and cannot pronounce.

You can now accumulate a meaningful interest in Apple between sips of coffee and a stake in Caterpillar without a clue what Caterpillar actually does.

And so, owning stock is now frictionless, and so is ignoring what that ownership is supposed to involve. Your voting rights are still there. They’re just buried under convenience, index funds, and the collective understanding that someone else will handle it.

So, if you’re not voting, who is?

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It is technically, legally, spiritually true-ish that corporations are “owned” by their shareholders.

In practice, people are busy.

Managers work for the shareholders, shareholders can theoretically vote to hire and fire the managers, approve mergers, veto the CEO’s trillion-dollar pay package, etc. That’s the story we all agree to tell.

And all of this sounds great until you meet an actual shareholder.

Most modern shareholders are normal people with jobs and families. Absolutely none of them wake up thinking, “Today I must research the Netflix merger to properly cast my vote.”

NFLX is 0.016% of your portfolio. You own approximately 0.00000000003% of it.

If you own shares, you are legally entitled to vote on things like mergers. But common sense and history tells us you will definitely not.

These people vote your shares:

You don’t want a world where managers run around enriching themselves. So someone has to watch them. And because you can’t, and won’t, this gets automatically delegated to a few groups whose entire job is to care on your behalf:

1. Boards of Directors

The board is supposed to hire and fire the CEO, approve mergers, and occasionally ask shareholders, “You cool with this?”

In theory, you elect them. In practice, the board elects itself. Board seats run unopposed 99% of the time.

Board members usually get paid in stock and like being rich. So they, like you, would also prefer the share price to go up.

2. Fund Managers

Most trading volume comes from things like indexes and pension funds. This means even if you don’t own Netflix directly, your index fund does.

Which means someone like Vanguard owns Netflix for you.

Vanguard is run by very nice people in very nice offices who have probably never set foot inside Netflix’s offices. But they will vote your shares without asking what you think.

You’re delighted to outsource this. You are paying them not to bother you.

And they actually care, sort of, because you are kind of their customer, and they want to look professional.

3. Proxy Advisors

But what about the little funds? The ones who can’t hire a dozen analysts to ponder Netflix’s next merger.

They can’t not read the voting package. So, they outsource their outsourcing to companies like ISS and Glass Lewis: the proxy-advisory duopoly.

These companies get paid to probably skim every shareholder vote and issue recommendations that your investment manager’s fund adopts without blinking.

ISS says, “yeah, this merger is fine,” and suddenly millions of votes fall into line.

These advisories don’t own stock, so they don’t get richer if the company does better. They get paid to…have opinions? Sometimes these opinions are about corporate governance; sometimes these opinions are about how deeply offended they are by the number of commas in the merger agreement.

You want returns, not homework.

After all this outsourcing, your vote1 on the Netflix merger ends up travelling more than you did this year. You’re cool with letting your microscopic vote venture off into the hands of others because you were busy doing literally anything else.

By the time your vote is cast, it still counts as your vote. Almost like you spent your evenings weighing the strategic merits of a multibillion-dollar merger instead of watching Netflix.

But this is the beauty of the system: it spares you. It knows you have a life.

So the system quietly appoints caretakers—boards, big investment firms, proxy advisers—whose entire job is to pretend you’re deeply engaged, even though you absolutely are not.

And honestly? That’s fine. You wanted to buy a stock, not a second job. The pros can handle the voting. You’ve got shows to watch.

Companies are supposed to tell investors when something important happens: big mergers, big financial events, big “our office got raided by the FBI” type things.

The law says: “Please announce the big thing immediately so the market can do market things.”

So, companies nod and say “yes, of course, absolutely,” the way you nod at your dentist when she asks if you floss.

The Bad-News Dilemma

Imagine you are a public company.
You have bad news.

Not world-ending bad, but definitely “our CEO is with the lawyers right now, and no one is making eye contact” bad.

Something you absolutely, definitely, totally have to disclose.

You now face three classic options:

Option 1: Don’t disclose it.

Congratulations, you have chosen crime.

Not like fun stealing a yacht crime. The crime where your lawyer begins drafting memos titled Potential Exposure.

You choose a different path.

Option 2: Disclose it.

In daylight.

Like an adult.

This is the responsible option.

You file at 10:03 a.m. on a Wednesday. By lunch, your stock is down 16%, and CNBC’s headline says:

“COMPANY REVEALS BAD THING; INVESTORS SAD.”

Accurate, yes.

Pleasant? No.

You have fulfilled your obligations.
You have also ruined the day of every person who owns your stock.
Mixed results.

Option 3: Friday Night File It

Ah yes.
The third way.

There’s a delightful quirk available to public companies:

• The stock market closes at 4:00 p.m. on Friday.

• Most humans also emotionally close at 4:00 p.m. on Friday.

• But the SEC accepts filings until 5:30 p.m.

And thus emerges a beautifully terrible 90-minute window where:

You can disclose something extremely embarrassing, extremely inconvenient, or extremely “Our CFO is doing improv with federal agents,” and the market will not react because the market is already at a bar ordering small plates.

Why the Friday Night Filing Exists

A Friday night filing is the black hole of disclosure.

A black hole where:

• The information is public

• Nobody is looking

• The few people who are looking are already dead inside

The law requires you to disclose.
But it does not require anyone to notice.

And if you’re a company choosing between:

• a brutal mid-week stock drop, and

• a quiet little confession released into the void,

well… welcome to the 5:12 p.m. Friday club.

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Case Study: RICK’s Friday Night Surprise

Which brings us to RCI Hospitality Holdings Inc. Its ticker is and its business is adult entertainment facilities in Vegas and Miami. Yes: those ones.

RICK recently executed a textbook Friday night filing.

Here’s the sequence:

1. Last year, the feds raided them.

   Always an encouraging start.

2. The company said everything was fine.

3. Last week, RICK bought back 10% of its shares from a U.S. Senator’s son.
   At a 50% premium.
   Totally normal if your business model includes paying extra so people stop asking questions.

4. Then, on Friday night, their CEO and CFO resigned using a Friday night filing.

RICK couldn’t not disclose it (see Option 1: crime).

They didn’t want to disclose it in broad daylight.

So they chose the black hole.

Drop the release on a Friday night.
Hope investors are already two Negronis in.
Let the weekend absorb some of the panic.
Maybe by Monday, people will forget it all happened.

The Moral (There Isn’t One)

In the grand tradition of stock market laws, Friday night filings achieve something remarkable: they allow everyone to tell themselves a soothing little lie.

• Executives tell themselves: “We were transparent.”

• Lawyers tell themselves: “We met the legal requirements.”

• Regulators tell themselves: “The system works.”

• Investors tell themselves: “I will read that release first thing Monday.” (They will not.)

Alas, if you build a disclosure system with a 90-minute loophole on a Friday, people will absolutely use it to do weird things.

And as long as the system keeps this twilight zone open, companies will keep doing what companies do:

Tell the truth…
just not when anyone is looking.

A warehouse worker kicked a bag labelled “millions of dollars of nickel” and discovered it was full of rocks. This briefly became one of the most important events in the metals market.

To understand why, you first need to understand how futures actually work.

A futures contract is a simple promise wrapped in extremely complicated plumbing.

It says:

“On a certain date in the future, I will buy or sell a specific thing at a price we agree on right now.”

The thing is usually a commodity: oil, nickel, gold, corn, wheat etc...

Commodities are fungible: one tonne of nickel is the same as any other. One barrel of oil is the same as the next. Nobody cares whose it is.

This boring-sounding concept quietly stabilizes fuel prices, food prices, and whether actual companies survive.

Two kinds of people trade futures:

Hedgers:
Real businesses trying not to go bankrupt by surprise. Airlines lock in fuel costs. Farmers lock in crop prices. They want peace.

Speculators:
People who don’t need the thing, but would like to turn their opinions into money.

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Commodities Never Leave the Basement

There are giant vaults underground stuffed with commodities.

Take nickel, for example. Not theoretical nickel.
Real, heavy, miserable nickel.

If you buy nickel futures, you don’t immediately get a box of nickel at your door.

You receive a contract that gives you a fancy legal right to request physical delivery of nickel at a later date.

Almost nobody does.

Instead, people just trade database entries that represent the promise. People don’t trade the thing—they trade the price. Any profit or loss just shows up as numbers in an account, not a truck in your driveway.

So, the nickel stays exactly where it is:
In the dark.
Underground.

It does not move through the system.
The system moves around it.

Its job is not to be used.
Its job is to sit still while people argue about its price.

The Warehouses That Make Everyone Feel Better

There are warehouses around the world approved by the London Metal Exchange (LME). These warehouses store real, physical metals—nickel, copper, gold—which backstop futures contracts.

These metals don’t move much. They sit there so that when someone trades a futures contract, there is something tangible behind it.

JPMorgan had ownership over some nickel stored in one of these LME-approved warehouses. This nickel supported real trades. Real risk. Huge positions.

Very nice. Very cool.

Then One Bag Got Kicked

At some point, workers at a warehouse in Rotterdam were doing a routine check.

Someone physically kicked a large bag labelled something like: $2 million worth of nickel.

They noticed its sound wasn’t right. Instead of feeling like solid, dense nickel, it felt… wrong.

Inside the bags? Rocks.

Investigators believe one of two things happened:

Theory 1: They were always rocks.
Someone delivered bags of stones into the warehouse instead of nickel, and nobody noticed for years.

Theory 2: Someone swapped them.
The bags originally contained real nickel, and someone later broke in, stole the metal, and replaced it with rocks.

High Finance, Low-Tech

This is kind of funny. Not because money was lost.
But because of the contrast.

On paper, the global commodities system is incredibly sophisticated. Elaborate systems model supply, demand, weather patterns, shipping bottlenecks and geopolitical risk.

And then there are….bags in a warehouse.

And the weakest link in the chain wasn’t a global market event; it was that nobody kicked the bag earlier.

The Actual Point

Despite how ridiculous this all sounds, commodity futures are a quiet miracle of modern finance.

They let farmers survive weather, airlines survive oil prices, and speculators survive boredom. And they keep global supply chains functioning.

But every once in a while, someone should probably go downstairs and check the bags. Because sometimes the market needs sophisticated computer models, and other times it needs a kick.

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It’s great. It’s earnest. It is working hard. But it cannot do much.

It cannot buy a warehouse, or a copper mine, or an early-stage startup. It also cannot hire a brilliant financial analyst who lists ‘machine learning’ as a hobby.

Most importantly: your $5,000 does not unlock any of the secret doors in finance.

And so a workaround was invented:

What if we smushed a bunch of these tiny $5,000s together?

What if we created one giant blob of money, and then put someone in charge of deploying it in ways none of the individual $5,000s ever could?

That is a fund.

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Why Funds Exist (The Nice Version)

A fund gathers pockets of money from lots of people and puts them into bigger, better, more powerful opportunities. Investors get scale, buying power, access, and diversification. The fund gets some fees and the occasional Forbes article.

If you’re a normal person, you do not have the resources, time, or professional-grade boredom tolerance required to read through 400 pages of bond covenants. A fund does that for you.

This is the polite version.

Why Funds Exist (The Real Version)

The real version is:

“Look, we are smarter than you.”

That is the unsaid pitch of every fund.

They hire very smart people, put them in glass-and-steel offices, feed them kombucha, and ask them to find the tiny cracks in the financial universe where money leaks out.

You, meanwhile, are at home Googling “what to watch tonight.”

And that’s fine!

Because the entire financial system rests on a polite handshake: You give us money; we make more money than you can on your own.

The Boredom Problem

Here’s the issue:

Humans are not very rational.
We like returns.
But we love stories.

A boring, reliable 5% compounding stock?
Beautiful. Sensible. Diligent.
Also: deeply unsexy.

Most people like predictable returns.
But they crave returns with adventure attached.

Humans want new, because “new” feels like edge.

So an entire universe of alternative investments has emerged:

Private credit, rare wine, farmland, baseball cards, cat bonds, crypto .jpgs. Basically anything that is shiny, scarce, and narratively satisfying.

Enter, Hermès Bags

And so, naturally, we arrive at the most logical outcome of this psychology:

A hedge fund dedicated entirely to Hermès Birkin bags.

Seriously, it’s real. And it’s backed by Christie’s and run by an ex-Blackstone executive.

The first fund raised about $1 million, bought and sold some Birkins, and reported strong returns. Demand was high enough that they launched a second fund.

Of course someone did this.

How the Hermès Fund Works

Investors put money in. The fund takes that money and buys scarce, authenticated Birkin bags from the secondary market.

The bags get inspected, tagged, wrapped back up, and placed in a vault like tiny leather treasure bars. They don’t get worn or shown off.

The logic is straightforward: not many Birkins exist. The fund buys from people doing spring cleaning and sells to people doing emotional spending.

While one person needs money, another needs a Birkin.

The Real Lesson

If you wonder why a Birkin hedge fund exists, it’s simple: traditional assets get boring, and finance hates being bored.

Every few years, finance picks a new Thing™ and decides it’s investable.

Tulips.
Railroads.
Baseball cards.
Crypto kittens.
Now: Hermès bags.

It’s not absurd. It’s inevitable.

So yes, a Birkin hedge fund exists because finance hates boredom. But the deeper truth is that investors hate feeling ordinary.

Behind it is the same human impulse that has driven every bubble, boom, and bizarre investment fad for 400 years: the desire to believe you’ve found something special.

Investors don’t want merely to make money; they want to feel like they’ve discovered a secret door.

The reason: a report that a private-equity firm was buying the company for $65 a share, or about $2.7 billion.

That’s exciting because Papa John’s shares were trading around $40, and 65 is, well, more than 40. That’s a $15-per-share difference; free money, if the deal is real.

But there was no press release from Papa John’s. No SEC filings. No quote from the company.

Just…internet headlines, which is kind of how rumours start these days anyway. So, people started buying.

Step 1: Cement the Headline

The story began on a British website called BusinessMole, which cited another site, NewsReleases.co.uk—a place where you can “get featured” by, well, paying them.

Then ABC Money ran with it.

ABC Money, as you might guess, is definitely not ABC News. It is a small, possibly-bankrupt UK company whose logo looks suspiciously like ABC News’s logo, and whose “journalists” have headshots that are stock images.

Step 2: Feed The Internet

Meanwhile, another site, “Backyard Garden Lover” (yes, a gardening blog) ran the same headline about Papa John’s buyout.

That post then got scraped, cached, and re-shared across more than 100 other sites.

Why? Because suspicious news aggregators auto-syndicate and republish content in their networks. The more times a headline appears on the internet, the more likely Google search will index it.

Before long, a few legitimate financial outlets, like Bloomberg, noticed “multiple reports” of a Papa John’s buyout and wrote stories citing ABC Money as the source.

And suddenly, the stock was up 13%.

Step 3: Rumourville

The funny part is that sometimes real buyout rumours do start this way.

Rumours don’t need to be true. They just need to sound like something that could be true.

When that rumour reaches the right audience, especially traders, algorithms, or journalists, it starts behaving like information.

And if enough people trade it, it becomes true, at least temporarily.

Trading on rumours can be very profitable. That’s why a new rumour just has to look similar to things that were true in the past.

Rumour trading is not “rational” in the fundamentals sense.
It’s rational in the “I’ve seen this movie before” sense.

Step 4: Reality Intrudes

A few hours later, Papa John’s issued a statement: they had not received any buyout offer.

No deal. No bidder. No $2.7 billion.

But for a few hours, someone managed to make the rumour look just plausible enough.

Step 5: Let the Machines Cook

When a story like this breaks, two types of readers see it.

First, the humans. They read “Papa John’s” and “buyout” and think, “Huh, that’s interesting. I like pizza.”

Then, the machines see it. And the machines don’t think at all.

Most trading desks subscribe to automated headline feeds. Tools that scan financial news sites for words that historically move prices: acquisition, merger, bid.

When one of these bots spots “Papa John’s” and “$65 per share,” it doesn’t stop to ask why the scoop came from a gardening blog.

It just knows that “company + buyout + price” almost always = “stock goes up.”

So it buys.

That buying triggers a cascade—each new trader assuming the previous one must have known something real.

Don’t Eat the Clickbait

The moral isn’t “don’t believe what you read on the internet.” It’s maybe “don’t trade on what you read on Backyard Garden Lover.”

I’ve talked before about how attention flow is sometimes better than cash flow. Today, the easiest way to move a stock isn’t to change the fundamentals: it’s to simulate the news cycle for 15 minutes.

And for a few hours on Monday, that was enough to make Papa John’s worth hundreds of millions more.

Which tells you less about pizza and more about markets: markets will eat anything, especially when it’s served fast and looks kind of like a deal.

Hunterbook Media was the first to report this.

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You start a business. Maybe you make car parts, or coffee, or microchips that teach computers how to think.

To grow, you sell little pieces of your business. Investors buy those pieces—shares—because they think your company will make money, and some of that money will eventually make its way back to them.

Share Disclosable

In theory, this is a wonderful little feedback loop. Investors give you cash, you use it to build factories and hire people, those people earn wages and spend them in the economy. Your stocks go up, and, well, everyone gets a little richer.

That’s the theory.

The S&P Shortcut

If you don’t want to pick individual stocks, you buy something that tracks them all: an index.

Buying an index is the same as saying: I think, generally, stocks will go up over time.

The most popular example is the S&P 500—a list of the 500 biggest public companies. Airlines, banks, soda, software, sneakers. A little bit of everything.

You can’t buy the S&P 500 itself—it’s just a list—but you can buy an index ETF like SPY or VOO that copies it.

These are supposed to represent the whole economy.

But they don’t.

How It Actually Works

The S&P is weighted by market cap, which means the bigger your company, the more of the index you represent.

If Apple’s stock doubles, it becomes twice as important to “the economy,” at least as far as the S&P 500 is concerned.

So when people say “the S&P 500 went up today,” what they really mean is “Apple and Microsoft went up.” The other 490 companies are decorations.

That, historically, hasn’t been a bad thing. But something recently changed.

You used to buy the S&P 500 and owned a diversified slice of 500 businesses.
Now you buy it and mostly own Apple, Microsoft, Nvidia, Amazon, Google, and Meta.

In 1990, the ten largest companies made up 15% of the S&P 500. Today, they make up more than 40%.

It’s like calling your diet “diverse” because you rotate between three brands of protein bars.

The Narrative Loop

These companies are trading higher than ever for one reason: AI.

Arguably, the S&P 500 (our entire economy) relies on a single narrative: “AI changes everything.”

Nvidia builds the chips.
Microsoft sells the cloud.
Apple promises the hardware.

So the loop goes like this:

1. Tech stocks go up →

2. You feel richer →

3. You buy more stuff →

4. Tech stocks go up again.

But, when that AI story eventually cracks—and all stories do—it won’t just be AI stocks that fall. It will be the economy.

The economy now depends on a few companies, and those companies depend on a single story.

The risk isn’t that AI breaks; it’s that the story does.

Because once people stop believing, everything built on that belief has to come down too.

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You have to say what you do, how much you make, if you owe the Brazilian government $600 million, and what might eventually kill your company.

You have to do this in a very specific way.

Using the right fonts, the right headings, the right disclaimers. And then you have to upload it to the SEC’s giant online filing cabinet, called EDGAR.

EDGAR is a wonderful name because it sounds like a person. It’s not. It’s a website that looks like it was designed by a government agency in 1998, because it was. Every filing ever made lives there, waiting patiently to be read by someone. Anyone.

The beauty of EDGAR is that everything’s there. The curse of EDGAR is that everything’s there.

Maybe these filings were never meant to be read by everyone? But they were meant, at least, to be read by someone. Analysts, institutions, journalists, hedge funds, people who get paid to read things?

The rest of us just benefit from the idea that Those People™ exist.

Here’s the problem. This isn’t tap water, where you expect the city to test for lead. This is the financial market where others will gladly take your slightly misinvested money.

What retail investors actually do before they trade

A new study just tracked what retail investors actually do before trading. What websites they visit, what they click, how long they research, what they read.

The answer was: not much, not for long, and definitely not the filings.

The median investor spent six minutes researching a stock before trading it. Not six minutes in the 10-K, six minutes total.

And what were they doing in those six minutes? The study found most of that time was looking at price charts. Most of that happens immediately before the trade; like glancing at instructions mid-assembly.

The rest was spent reading a Yahoo Finance summary, maybe glancing at an analyst rating, or a Reddit post that said “To the moon.” Almost none of them—0.002% to be exact—actually opened a filing.

But surely, institutions read filings?

On October 22, 2025, Netflix announced earnings. Its share price dropped because the company reported a $619 million tax bill in Brazil.

Here’s the thing: this wasn’t some buried secret. In June—four months prior—Netflix told everyone about the Brazil tax issue:

…the Company is involved …with [the] Brazilian tax authorities regarding…tax assessments…The…exposure…is estimated to be approximately $600 million, and is expected to increase over time. (July 18, 2025)

It was right there, in plain English, for anyone to see.

But when the expense showed up, everyone acted surprised, the headlines said “unexpected,” and the stock fell. This tells you something important: it’s not just retail investors who don’t read the filings. Maybe…nobody does?

If you are a regulator, this is interesting. The whole theory of efficient markets depends on the idea that investors read the filings.

And technically, they can. They just don’t.

If you are a securities lawyer, this is….kind of funny? It shows your clients’ footnotes are invisible, which is good for them, but also that you spend your weekends producing, um, unread documents.

In the end, there’s always someone who read the filings; that’s who’s selling Netflix to you.

So, if you don’t read filings, the system works—just not for you.

But if you buy Apple shares because you noticed iPhone cases selling out at the mall, that’s fine. That’s public information, even if you’re the only one who paid attention.

The distinction is weird: see it in the wild, you’re a genius; hear it in a boardroom, you’re a felon.

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Enter: prediction markets.

Prediction markets are where you go to bet on things you normally can’t bet on—like who’ll win the Nobel Peace Prize, or whether aliens exist, or if it will rain tomorrow.

Prediction markets operate almost entirely in that second, informed category. There are no CFOs, no confidential boardroom meetings. Just people looking for clues. And if you find one? You get rewarded for being the first to know things that are knowable but not yet known.

It’s finance’s purest form of gossip monetization.

The Nobel Market That Knew Too Much

In prediction markets, prices = probabilities. If María Machado’s Nobel Peace Prize odds are trading at 60 cents, the market thinks she has a 60% chance of winning.

Last week, a few hours before the official Nobel Peace Prize announcement, a trader on Polymarket started buying shares of María Machado to win. The price spiked, fast.

The internet screamed inside job. Norway opened an investigation.

Naturally, people wondered: did the trader have inside information? Was there a leak?

Maybe? Or maybe a trader noticed something the rest of us didn’t.

The Nobel website runs on WordPress. Like most WordPress websites, it has a sitemap: a small text file that lists every page on the website. Sometimes, even ones not yet officially “live.”

Sometime before the announcement, a new entry appeared:

https://nobelprize.org/prizes/peace/2025/machado/facts/

It turns out: the official portrait of Machado (machado.jpg) was uploaded to the Nobel site at 07:18 GMT, more than an hour before the announcement. That someone noticed that and made a big bet.

It’s not exactly insider information; it’s…enthusiasm? That’s the fun part of prediction markets: you can profit by being a little bit better at knowing things before other people do.

Efficiency, Not Espionage

So no, an insider didn’t front-run the Nobel Committee. The system just rewarded someone for paying attention. That’s the point. They’re incentivized to.

In prediction markets, you can make money by being slightly more right, slightly earlier. It’s like the stock market, except instead of trading companies, you’re trading confidence. The underlying asset isn’t cash flow; it’s conviction, measured in cents.

This is an example of a marketplace working—dumbly and beautifully. Not in a grand, philosophical way. Just in the small, hilarious way where someone got rich because a webmaster hit “publish” too early.

You just want the car. Now.

Unfortunately, nobody is standing in your driveway yelling, “Hey! I have the exact Honda Accord you want.” You have money, someone else has the car, but the odds you both show up at the same time with the same price are basically zero.

So, into this mess steps the market maker. She says, “I’ll buy the Accord from whoever wants to sell, and sell it to whoever wants to buy, for a small fee.”

She doesn’t particularly care about Honda Accords. She just cares that other people do. In theory, the market maker’s goal is to have no opinion about the car. She’s not betting on whether the price will rise or fall.

She’s betting on flow: for every person who wants to buy, there’s another who wants to sell.

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The Spread: Where the Magic Happens

Our market maker posts two prices. She’ll buy your Accord for $9,995, and sell it for $10,005.

That tiny $10 difference is called the spread, and it’s how she makes money.

She’s not trying to get rich off one trade; she’s trying to get rich off a million trades where nothing bad happens. If she’s lucky, she owns the Accord for seconds before someone else wants it. If she’s unlucky, she owns 1,000 Accords just as gas prices spike and everyone decides they only drive Teslas now.

To you, it looks like there’s a constant, infinite supply of Accords available for purchase and sale. You can click a button and get one instantly. That illusion of liquidity (that there’s always a car, always a price, always a market) exists because someone like our market maker is willing to take that risk for a tiny fee.

What Happens When the Lot Burns Down

When markets are calm, it feels like magic — instant prices, instant trades. But when panic hits and everyone rushes to sell their Accord now, the market maker quietly disappears. If you want $10,000 for your car and buyers only offer $5,000, the math stops working. The spread widens, profit turns to risk, and the market maker steps aside.

That’s when markets realize the “liquidity” you thought you had was just one very tired market maker saying “sure” all day.

On October 10th, That Happened

Binance, the world’s biggest crypto exchange, lets people use stablecoins like USDe as collateral to trade with margin. $5,000 of collateral might get you $10,000 of margin. Normally, this is fine. Binance charges interest, everyone’s happy, and the occasional default gets smoothed out across thousands of profitable customers.

Until it doesn’t.

Usually, lenders use independent oracles: data feeds that tell you what something is worth across multiple markets. It’s like checking the Blue Book for the Honda Accord, instead of assuming that whatever Randy is charging must be correct. Market makers use this oracle to ensure they are pricing their thing correctly.

But Binance didn’t do that. Binance used its own order book as the oracle, meaning it valued collateral based only on prices inside its own parking lot.

The Exploit

A few weeks ago, Binance announced it would soon switch to independent oracles. But it hadn’t yet. Someone noticed.

That someone, on October 10, 2025, dumped upwards of $90 million worth of USDe on Binance, driving USDe’s price from $1.00 to $0.65 on Binance only. Everywhere else, it was still $1.

Inside Binance’s system, this looked catastrophic. Everyone who had borrowed money using USDe as collateral was suddenly underwater. The platform’s auto-liquidation engines kicked in, dumping their holdings—Bitcoin, Ethereum, everything—to cover the losses. A mass margin call.

That selling pressure spread across exchanges, crushing crypto prices globally. It looked, algorithmically at least, like everyone was selling.

Market makers suddenly found themselves long on one exchange, short on another, and wrong everywhere. They pulled out. Liquidity evaporated.

Meanwhile, someone had placed massive short positions on Bitcoin and Ethereum right before the crash, reportedly netting around $192 million in profit.

The Lesson

This was an exploit, yes. But it was also a reminder that markets don’t make themselves.

Liquidity is a feature of human confidence. It exists because someone stands in the middle, taking risk, believing that tomorrow will look roughly like today.

When that belief cracks, when the prices stop making sense, or when the lot starts burning, the market maker stops answering the phone.

And suddenly, Randy’s $10,000 Honda Accord isn’t a “liquid asset” anymore. It’s just a car in his driveway, waiting for you to call him back.

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There was a time when buying a stock meant believing something about a business. You’d think: This company makes things people want, and will therefore earn money that eventually flows to me.

That time is over.

The main reason people buy stocks now isn’t because of a revolutionary business idea that will generate cash flows. It’s “other people are going to buy this stock, so it will go up.”

When everyone has to buy something—because Twitter says so, or FOMO says so, or because their friend said “it’s up 8% today”—the only thing that matters is participation.

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You can see this in the numbers: markets have record-high volumes, record-high retail participation, and record-high valuations. All at the same time corporate earnings growth is flat and debt is expensive.

But that’s fine. You don’t need profits if you have buyers.

You no longer need to convince people you have a brilliant product. You just need to convince them that other people think you have a brilliant product. The goal isn’t cash flow, it’s attention flow.

And attention is beautifully circular. People buy because it’s going up, and it goes up because people buy.

The Regulator Conundrum

Market manipulators used to have to wash-trade with offshore brokers; now they can just influencer-post to look hot.

Regulators are stuck in an awkward spot: the tools we have are designed to stop lies, not momentum. We can catch someone saying the wrong thing, but not everyone believing the wrong thing.

Regulators can’t stop people from chasing momentum any more than lifeguards can stop tides. Their job is to make sure the frenzy doesn’t turn into a feeding.

Because in 2025, the business of being a business is mostly about making sure people keep buying the stock.

And that, unlike profits, is surprisingly easy to do.

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It’s a generation deciding, all at once, that if they can’t afford real estate, they might as well buy the stock market.

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Call it substitution, not mania. Young people are moving from granite countertops to call options. And honestly, it’s worked. The S&P is up 150% the last five years. Try getting that from your high-interest savings account.

There’s also a social shift happening. Investing used to be something your dad did through a financial advisor; now it’s part of your feed and your group chat. Markets are no longer financial ecosystems; they’re cultural ones.

But it also means the line between participation and speculation is thinning.

Why does this matter for regulators?

When $100 billion of fresh, mostly inexperienced capital floods into the market, the sharks start circling. Fraud loves enthusiasm. It thrives on the same dopamine that fuels bull runs.

Today’s retail investor is younger, self-directed, and learning from Reddit threads and YouTube channels. Regulations were built for a world where the problem was access. Now the problem is influence.

1. We need to think less about who’s giving advice, and more about how advice travels. We need to think of social platforms as financial intermediaries—not in a punitive way—but in recognition that’s where investors actually learn.

2. The traditional model assumes people read things. They don’t. We’re not reading prospectuses, we’re reading comment sections.

More money and less experience is a dangerous combination. Every increase in new retail participation brings with it a wave of opportunists: pump-and-dumps, AI trading bots, and Discord servers offering pre-IPO shares in imaginary companies.

A Reality Check

The $100 billion month is a turning point.

The role of regulations is not to stop people from investing when things are risky. It’s to ensure the guardrails are ready for a world where participation happens differently: faster, riskier, and more social than we ever planned for.

In the old system, investors needed protection from dirty brokers.

In this one, they need protection from belief.

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