The MOASS Preparation Guide
reddit: the front page of the internet 2021-04-07
Please read though this and possibly sticky this because I think it is very important that we all have an understanding on the game plan 🚀
- Brokers preparation - i think everyone should take the time to understand the nuances and rules that the broker applies on trading. Some brokers may have some sneaky fine prints. So you should make sure that nothing can get in the way of you and your tendies. Take note of the brokers that previously blocked trading. If you have all your shares one of these brokers and can't transfer, don't sweat it too much. DO NOT SELL YOUR SHARES. The message was clear as crystal in January: if they prevent free trade like Robinhood did then that means they will lose customers, so i hope they have prepared for this. It also wouldn't hurt to email your brokers customer service and ask them "will you prevent me from selling if the price goes to XXX amount?". It's good to create a paper trail just incase you need to bring them to court.
- Back up broker - If you can, open up an account as soon as possible on a reputable broker and buy at least 1 share. Don't aim to maximize gains but to minimize the regret of missing out just in case your broker decides to f*ck you. The rule of thumb is usually that commission based boomer brokers with horrible user interfaces are the most trustworthy. See the "good brokers" in the link above.
Diversify Brokers - if you can, spread out your holdings across brokers. Also take note of what clearing house they use. You don't want to be caught up in some f*ckery where both brokers wont let you sell because they share the same clearing house. A solution to this could be to transfer shares. Some brokers allow you to transfer shares to others, but small "shit" brokers like eToro for example, do not. If thats the case then hold tight and buy on a different broker.
- Here is a list of brokerages and the respective clearing houses they use.
- Cash account, not margin - if you haven't already, request your broker to change your account from a margin account to a cash account. This way your shares are entirely your own and aren't being lent out to short sellers. Note that you need to have no options or short positions active with your account before you do this.
Online Security - If you have learned anything from all this it's that you should not trust anyone. Take the time to enable two-factor authentication on your bank/broker accounts. Also you should have a different password for each account, preferably more than 20 characters with a mixture of alphanumeric characters and symbols.
- edit: If you are a big name in the GME movement, like a DD contributor or well known in this space, i suggest to use a VPN and delete all social media. Sorry if i sound like a tinfoil hatter but your should protect yourself just incase the suits try to come after your legally/physically. They will try anything to discredit you and try all sorts of defamation.
Taxes - It is crucial that you learn about your countries capital gains taxes. Remember to calculate what you need to set aside to pay the tax man. ELI5:
profit / 100 x CGT = Amount you need to pay in taxes.
- Prepare a personal balance sheet - It may be a good idea to prepare a balance sheet. A balance sheet is a snapshot of net worth and lists all your assets, liabilities, cash etc. This will make your life (and your accountants life) easier when you need an accountant. If you need a better understanding of balance sheets see this video here
- Mental preparation - This one isn't so obvious, but please prepare yourself for seeing life changing money in your possession. Have a long think what you are going to do with this money. And as a side note: try to not tell too people you're invested, the less people know the easier your life will be.
- Take care of your health - Firstly, on the day of lift off you will definitely feel overwhelmed with emotions and anxiety. You're probably going to feel a little dizzy seeing the price increase exponentially. Please sit down when you are checking the price. The last thing i want to hear is that a fellow ape fainted and cracked their head because of being overwhelmed with emotions. In my opinion, deep slow diaphragmatic breathing really helps to slow down your heart rate and reduce anxiety.
- Expect Trading Halts - The NYSE may stop trading if the price rises to quickly. This is usually done to prevent massive impulse waves and let people calm down for a few minutes. But this is futile in the setting of a short squeeze, because all shorts must cover regardless. You can also check when GME is halted here. Do not freak out if the graph flatlines.
- BOTS, BOTS EVERYWHERE - This could go two ways: either the shorts don't have anymore money to pay shills or we will have a massive influx of bots/shills on here and r/GME trying to nudge people to sell. They will say something like "wow i sold my 3 shares for 30K" and try to create a narrative that below 100K is the peak. 100K is not the peak. don't listen to it. If it isn't already, i would formally like to request the mods to ban gain porn from being posted here.
During the MOASS
Diamond hands - This one i cannot stress enough, the mantra is clear: HOLD! If you sell early you creating downward pressure against the MOASS. If the short position is in the billions of shares (which has been speculated before) then this shouldn't be too much of a problem, but regardless - KEEP THOSE HANDS DIAMOND! The squeeze could last a few days, week or indefinitely. At this point no one knows. Don't feel pressure to sell as soon as it gets to 100K.
- HFT computers will keep bidding until someone makes a sell, to which ever price that person asks because they will be programmed to cover at any price during a margin call. The stock price = the last price it sold for. If the only sells available were asking for 1 million, then that means the price will be 1 million. And since there is not enough shares in existence to cover the amount of shorting that went on then theoretically this ape filled rocket could blast through the moon and land on alpha centauri B
Whats an exit strategy? - This one isn't so obvious because the we don't know what the peak will be, but you should have an exit strategy: All i can say on this matter is do not sell on the way up as it's a bad idea. u/WardenElite explains here that you should:
- sell on the way down
- don't sell everything at once
- scale out slowly.
- Sit down when you decide to take gains - when the dust has settled and you decide to take gains, again, sit down and drink some water and breath.. because you may faint or possibly get sick from seeing that you have sold a single share for a 7 figure price.
- Don't publish your realised gains publicly - obvious one, don't be that person who flaunts the gains online. You are going to cause a lot of fairweather friends and family to crawl out of the woodwork trying to get their hands on you tendies. It may be tempting to rub it in the faces of the people who doubted you, but just don't. It's not worth it.
Inform your bank about large deposits incoming - this one may not apply to everyone~~, but make sure you bank is aware that you will be depositing a large sum of money into your account (most likely in multiple withdrawals) and explain why. This will prevent them from contacting the authorities in fears that you're up to illegal activities.~~
- Congratulations, you just joined the big-boys table: I did some pro google investigating and found out you actually need a special bank account for rich people. I never actually knew rich people had separate bank accounts to use. anyways, lookup how to do one of these when the time comes.
Assemble a team of legal and financial advisers:
- Get an accountant - Get certified public accountant who helps wealthy families organize their finances and guide you through your finances.
- Lawyer up - Hire a tax attorney to deal with any problems that may arise from all of this. Hire a family law or estate planning attorney that can arrange a Will for your family immediately.
- Financial advisor - Make sure you hire a financial advisor that is sworn to act as a fiduciary (acting in your best financial interests, not theirs), preferably with experience managing significant wealth. Make sure you check their certifications and that they aren't trying to push you to buy some insurance policy. The requirements to be a FA aren't concrete so there are a lot of snake oil salesmen that really don't have your best interests at heart.
side note: do NOT sign anything, from your broker/bank/crayon dealer or anyone if you do not understand it. Make sure you have an attorney read anything you may or may not be asked to sign.
Apart-Seesaw-6047 - "Financial advisor here: I can’t emphasize enough to work with an advisor that is a FIDUCIARY! I’ve worked at both “fiduciary” and true fiduciary firms and they aren’t even comparable. One is just trying to make a commission (salesmen) while the other acts more as an educator. Most fiduciaries are in the form of a Registered Investment Advisor (RIA) working as a Series 65 certified financial advisor. DOMO Capital is an RIA l, for example. Avoid annuities at all costs unless your completely risk adverse (but you’re not since you own GME). Minimum advisor fees based on AUM should not be over 1% unless they can justify historical returns like DOMO. To put it in perspective my firm charges .65% for accounts over 1 million. Do not let an advisor, especially one that is a family or friend, take your hard earned (not really) gme gains away from you."
- Expect to vilified some more - you will most likely see news about a financial system crashing. And i can nearly guarantee that they will try to blame us rather than the hedgies and regulators who caused it. Pay no mind to mainstream media and stand your ground. If people try to paint you as the "bad guy" just ignore them.
- Do nothing with the money - this kind of piggy backs off the first point about assembling a team of advisors, but please don't just cash out and go crazy with the money. Sit and think about it for some time. Let reality settle in and decide how are you going to use this money to help yourself and the people around you. Lambos are great but they won't bring you happiness forever. Don't blow that money down the drain. Educate yourself on how wealthy people maintain their wealth.
Longer Term aftermath
- Expect turbulence in the economy - this wont be just contained to the world of GME. This is going to have a ripple affect across the world economy as the powers-that-be, who have been taking advantage of the system loops holes, finally pay their debt. If you want to learn more about this i suggest that you read The Everything Short by u/atobitt.
Hedge against hyper-inflation - if you haven't been paying attention, there are fears of hyperinflation of the US dollar. This is due to JPOW printing money like there is no tomorrow. Learn how to protect yourself from inflation so your tendies don't lose all their value.
- Edit: people are asking me how do you protect yourself from hyper-inflation: this isn't financial advice, but what i would do is invest in precious metals, Treasury Inflation-Protected Securities (TIPS), real estate and crypto stable coins or bitcoin, but no one knows exactly how crypto would react against inflation. I need to reiterate: i'm not an expert on this topic so don't listen to me.
If there is anything else you think should be in here let me know in the comments. This is just my opinion and not financial advice. I am just an ape who eats crayons for fun. Before I finish i will just leave you with this image (above ^). Remember what happened in 2008 and don't show any mercy. HOLD
- Socrates ( ͡° ͜ʖ ͡°)
TLDR: no tldr you lazy ape, go read it. Its important