Wall Street will be Wall Street

I’m finishing Liar’s Poker by Michael Lewis finally. It’s a book that’s been on my read list for sometime and it’s as good as advertised. For those not familiar, it’s a book about Wall Street antics particularly at Salomon Brothers in the 1980s. The book is centered about Michael’s experience as a bond trader at Salomon Brothers during the peak of money making and the eventual downfall of the firm. As you can guess, it’s an inside look into how Wall Street firms such as Salmon prioritized firm and individual profits over their clients’ needs.

The viral talk of the day on FinTwit, ahem X-Twit(?), is on Chamath’s defense of his SPACs. He’s been fairly vocal in defending himself despite nearly all his positions losing the majority of their market cap since they’ve started trading publicly. In one Tweet today, he even mentioned that he didn’t lose money and blamed another individual for losing money for not selling when he did.

On one hand, I suppose you can say that Chamath was trying to do something different and in the age of social media and was a lot more public about things to do some good. You can even say he was trying to do the right thing. On the other hand, it’s hard not to see the similarities between most/all of Chamath’s SPAC deals and a simple pump and dump scheme. One in which retail investors are almost always left holding the bag.

As I see what’s happening today, unfortunately it’s blatantly obvious to me that nothing has changed in today’s Wall Street compared to Michael Lewis’ Wall Street in the 1980s. Institutional investors such as Chamath will always hold the upper hand in these situations. They’ll create or revitalize investment vehicles such as SPACs to line their pockets, and then be able to get out of them ahead of the average retail investor.

It’s not a fair situation and it’s never been a fair situation. Wall Street will always be Wall Street.