GM. This is Dumb Money, the only financial newsletter with a 100% loss rate.
Today's damage was distributed across three asset classes, three forums, and one shared delusion that earnings season is free money.
One guy averaged down on a cruise stock for three months and got force-liquidated on earnings day. One bought weekly calls on a server company already up 70%. One went 30x long on the Australian dollar because a YouTuber in a garage said China was about to stimulate.
Here's what we've got today:
🏆 A Carnival cruise straight to a margin call. $76K overboard.
📉 SMCI weekly calls. The AI thesis that expired worthless.
⚡ 30x long AUD/USD on a stimulus rumor. Liquidated in 94 minutes.
🤣 Dumb memes from the trenches.
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| TODAY'S DAMAGE REPORT 📊 | |||||
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LOSS OF THE DAY 🏆
Every day we crown one person who made the worst financial decision on the internet.
Today's winner spent three months catching a falling knife. By the time he realized it was a knife, his broker had already sold everything.
Here's the setup. A trader on r/wallstreetbets started buying Carnival stock in June at $19.40. The thesis: cruise bookings were at record highs. The stock was "oversold." Q3 earnings on September 29 would be "the catalyst."
He kept averaging down. July at $16.80. August at $15.10. September at $14.20.
By September 28, he owned 12,000 shares at an average cost of $16.82. Total position: $201,840. Half of it on margin.
He took out a $98,000 margin loan to buy a cruise stock that was already down 25% on the year.
September 29 arrived. Carnival reported. Revenue missed by $340 million. The CEO used the word "headwinds" eleven times. Forward bookings softened.
The stock opened at $10.84. A 23.7% gap down.
His broker didn't call. They just sold. Force-liquidated at the open. Total loss: $76,140, including $4,380 in margin interest he'd been paying since June.
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TOTAL RETURN -$76,140.00 ▼ $201,840.00 (-37.72%) All Time 1D 1W 1M 3M ALL | ||||||||||||||||||||||||
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"Carnival just sank my portfolio faster than the Titanic" Averaged down for 3 months on CCL. June at $19.40, July at $16.80, August at $15.10, September at $14.20. 12,000 shares on margin. Earnings hit. Stock gapped 24%. Broker force-liquidated at the open. Top comment: "The only thing transitory was your money."
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| Quick math on margin for non-stock people: When you buy on margin, your broker lends you money to buy more shares. If the stock drops far enough, they sell everything automatically to get their money back. You eat the loss. They eat lunch. |
The cruise industry is dealing with $95 oil, a slowing consumer, and rising port fees. This wasn't hidden information. It was on the first page of every analyst note he didn't read.
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TODAY'S CASUALTIES 💀
Not everybody can be Loss of the Day. But these two gave it a real shot.
Let's run through the tape.
Casualty #1: The AI Hardware True Believer
Super Micro Computer has been ripping for months. From $25 in July to $43 in September. Never mind the past accounting restatements. The audit resignations. The Nasdaq delisting warnings.
None of that caution mattered to u/ai_chips_only. He found a YouTube video titled "SMCI: The Most Undervalued AI Stock on Earth." Twelve minutes long. The host had a whiteboard. That was the entire thesis.
He bought 400 SMCI $50 call contracts expiring September 26. Premium: $1.18 per share. Total cost: $47,200.
One problem. The stock didn't keep running. It rose another 10.7% that week but never touched $50.
All 400 contracts expired worthless. $47,200 vaporized on a YouTube recommendation.
The video has since been deleted. The host's channel now posts crypto content.
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POSITION VALUE -$47,200.00 ▼ 400x SMCI $50C (-100%) EXP 9/26 1H 4H 1W 1M ALL | ||||||||||||||||||||||||
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"generational buying opportunity" - the video I can no longer find Bought 400 SMCI $50 calls expiring 9/26 based on a YouTube video. Stock rose 10.7% that week but never reached $50. All 400 expired worthless. The video has been deleted. Top comment: "The generation was the Lost Generation."
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| Weekly options for non-options people: Weekly contracts expire in days, not months. If the stock doesn't move your way fast, your entire premium evaporates. Buying far-OTM weeklies on a stock that just ran 70% is paying full price for a lottery ticket in a town where nobody has ever won. |
Casualty #2: The Stimulus Whisperer
This one came from the forex trenches. It was fast.
A trader went long AUD/USD at 0.6380 with 30x leverage. Notional position: $1,002,000. His actual margin: $33,400.
His thesis: China was about to announce a massive stimulus package. The Aussie dollar, which tracks Chinese commodity demand, would rip.
Where did he get this thesis? A YouTube livestream. The host had 847 followers. He was streaming from what appeared to be a garage. There was a dog in the background.
The stimulus never came. China's September PMI printed at 49.1 - contraction territory.
AUD/USD dropped 1.2% in 90 minutes. At 30x leverage, that's a 36% margin hit. His liquidation price was 0.6347. The pair hit it in 94 minutes.
$33,400. Gone. The trade lasted less time than a lunch break.
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MARGIN P&L -$33,400.00 ▼ LIQUIDATED - 94 MIN HELD 15M 1H 4H 1D ALL | ||||||||||||||||||||||||
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He is now commenting on other people's forex losses with "should have used a stop loss." He did not use a stop loss.
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DUMB MEMES 🤣
Every newsletter needs a meme section. Ours just hits different when you're reading it from a portfolio that's down 42%.
🚢💰→📉→📉→📉→🚢💀 (the averaging down never averaged up) |
🎥→🧠→💸→📉→🎥❌ (YouTube thesis → conviction → loss → video deleted) |
If you laughed, you're coping. If you didn't laugh, you're probably in the screenshots.
See you tomorrow. Same losses. Different people. Exact same mistakes.
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