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Superstonks, Crypto, And Discord: The Age Of “Gamified” Investment – Forbes

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A remarkable amount of focus has been injected into the world of investment through “gamification.” We witnessed the rise of “meme stocks” late in 2020, starting with GameStop (GME), which was famously driven by a swarm of daily investors found in an online Reddit forum and using the Robinhood trading platform. Holders that had short sale positions in this company felt the short squeeze as the situation dominated headlines. To the dismay of many, viral investments have not diminished as the GameStop saga continues and other financial vehicles have begun to see gamification push the boundaries of economic traditions. 

We have recently witnessed enthusiasm for GameStop surge again, especially in Discord chats and Reddit forums. The company has helped this surge with a bevy of tweets supporting the movement and teases regarding upcoming activities, allowing them to cash in on the frenzy. The crew decides whether to move towards a short squeeze and push the stock value as high as possible, and they speculate on when to do it. 

Since the initial run late last year, the share price was roughly $350 in January. By March, it was around $100, and most recently, the price has been around $200. It has been quite the rollercoaster ride. Showing no signs of slowing down, the video game retailer has benefited from some recent renewed positive news—the announcement of new managers, celebrity investors, corporate news and tons of press never hurts. 

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AMC

The Reddit Revolution turned its attention to AMC Entertainment Holdings, Inc. (AMC), with small retail investors pouring into the stock. The stock surged nearly 100% in trading on one day alone, and it’s now up a whopping 2,650% year-to-date. The Reddit and Robinhood crowd has figured out how to overpower the algorithms on Wall Street through gamification. The Citadel algorithms control most of stock trading, and they have struggled to handle the thousands of orders that pour into select stocks from the Reddit and Robinhood crowds. Shamelessly, the AMC CEO sent an email to customers encouraging this frenzy by offering AMC stockholder free popcorn when they visit an AMC theater. 

Dogecoin

GameStop and AMC were not the only seemingly farcical force of alternative investments to witness gamification. Ample interest in the cryptocurrency Dogecoin has been propelled by forces in the Reddit sphere, including activity involving Tesla billionaire Elon Musk. “Superstonk” is the word in this world, alluding to inside efforts to corner and create gamified runs on favorite stocks. Dogecoin has this same sort of momentum, with investors coming out of multiple walks of life. Superstonks rank big on social media engagement, including other crypto topics such as NFTs, Bitcoin, and other alternative coins. 

FOMO in Effect

The Fear of Missing Out, referred to as FOMO, is one of the predominant effects felt in these markets. The direction of the wind carries early and active investors into profitable territory and there appears to be no end in sight. It seems nobody wants to be on the sidelines without making some profit, and the entire channels are heavily in the space of gamified investment. However, if you have been sitting on the sidelines, it is hard to blame you. These are perilous, very real investment situations that have true financial implications. Turning that over to the impetus of an online mob can be very disconcerting. Even worse if that mob is nothing but a zombie army of fake accounts and bots. The power of these investments and the future of these investors is in many ways in the hands of a mobile base of users. Faceless and difficult to quantify, the audience that participates in these investments is somewhere active in the game or on the sideline, waiting for the right time to make their next move. Some investors appear to be fearful of massive pump-and-dump operations and others cannot help themselves, they jump right in. 

The Dark Side

I have delved into the dangers that can come from losing touch with reality. While there is nothing wrong with gamifying stocks and investments, there are inauthentic actors out there attempting to manipulate these volatile markets. Not only are individuals seeking to manipulate in order to gain financially, but automated bots from international and domestic sources are orchestrating fake emotions in any number of pop-investment vehicles. It’s a massive vulnerability. 

Time to Bring Lack of Authenticity into Check

It is difficult to ascertain safety and authenticity when engagements on many platforms are completely anonymous and unauthenticated. Bots and bot-based activity are a significant threat to not only the personal privacy and security of the average person, but also the valuation of well-known companies like GameStop and AMC. There seems to be a lack of will by companies like Facebook, Twitter, and Reddit to put a firm stop to the ability of creating numerous anonymous accounts for the sole purpose of creating a false frenzy, and biasing the “game.”

The impact of an inauthentic audience can be minimized by implementing strict multi-factor authentication and stricter policies that are focused on implementing one identity per validated user. While gamification is a welcome and entertaining notion even in the realm of online investment, there is an opportunity for responsible applications in the marketplace that do a better job of vetting individual accounts and incentivize behaviors in other veins of gamification such as rewards programs, loyalty and social credit.

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Amazon Adds $2.75 Billion To Anthropic Investment, Sora Goes To Hollywood – Forbes

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Amazon invests $2.75 billion in Anthropic. This brings Amazon’s investment to $4 billion, as it follows its previous investment of $1.25 billion, which gave the company the option to invest the additional funds. This comes as Anthropic’s new Claude-3 chatbot outperforms ChatGPT- 4 in recent tests. Amazon has unique insight into Anthropic’s performance as it is one of the suite of AI models offered by AWS, which include most of Claude’s competitors.

Sora Goes To Hollywood. Everyone is reacting to a Bloomberg report that OpenAI will soon be meeting with studios and other Hollywood stakeholders to demonstrate the capabilities of the text-to-video generator and explore partnerships. OpenAI says unnamed “A list” directors are already using it.

Based in Toronto, shy kids are a multimedia production company who utilized Sora for the above short film about a man “who is literally filled with hot air.” His head, as you can see, is a yellow balloon. “We now have the ability to expand on stories we once thought impossible,” shares the trio made up of Walter Woodman, Sidney Leeder and Patrick Cederberg. Walter, who directed Air Head, said as great as Sora is at generating things that appear real, what excites us is its ability to make things that are totally surreal.

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Neuralink Shows Paralyzed Patient Playing Chess on a PC. Elon Musk’s brain-computer interface company shared a video of its first human patient, Noland Arbaugh, playing chess and Civilization VI using their brain implant. Arbaugh, who is paralyzed below the shoulders, described the experience as “just stare somewhere on the screen” to move the cursor. While some experts see this as a promising step, others emphasize that it’s still early days and the technology has limitations. Arbaugh acknowledged that there’s still work to be done, but the implant has already changed his life.

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Illuvium Labs Raises an additional $12 million for NFT Gaming Universe. Following an extensive three-and-a-half-year development journey and $60 million in funding, Illuvium Labs is on the cusp of unveiling its interoperable gaming universe. It will feature three interconnected titles designed to utilize the same NFTs seamlessly across all games, promising a first-of-its-kind experience. The influx of $12 million in Series A funding from esteemed firms like King River Capital, Arrington and Animoca will be allocated to developing new gaming titles within the Illuvium ecosystem.

Databricks’ DBRX claims the crown as best open-source LLM. It’s a list that includes Meta’s Llama 2 and Mistral’s Mixtral. Leading companies like OpenAI, Google, and Anthropic sell, or rent, their proprietary private models to enterprises and subscribers. DBRX was produced for just $10 million, orders of magnitude less than its competitors. On Monday, Wired reported that the company showed data proving its AI model’s reading comprehension, answers to general knowledge questions, and coding is superior to other open-source models that can be downloaded from Hugging Face and modified by users.

Shiba-Inu Metaverse leader steps down amid dispute over IP. Marcie Jastrow, the well-regarded Hollywood executive who led Technicolor’s XR efforts, has left the company. This led the company’s legions, known as the Shib Army, to speculate about malfeasance, which is easy to do, because Jastrow is the only person involved who is not anonymous, including Ship’s charismatic leader Shytoshi Kusama.

This live football experience was built by Immersiv.io to showcase how AR can transform the live sports broadcast and fan experience using the Apple Vision Pro. Immersiv.io worked with the Bundesliga (the German Football League) on the production. In a post on X, the company said. “This is a 3D reproduction of the live game integrating TRACAB Gen 6 live skeletal data of all players and the ball, complemented with real-time insights, offering the ultimate live tactical perspective of the game.”

SXSW 2024: XR That Makes You Go Wow. The XR competition was won by an AI experience, The Golden Key. This is the second year in a row that an XR experience did not take the immersive festival’s grand prize.

The second annual AI Film Festival is coming to Los Angeles on May 1, and New York May 9. Seats are limited, request to attend at http://aiff.com

This column, once called “This Week in XR,” is also a podcast hosted by author Charlie Fink, and Ted Schilowitz, former studio executive and co-founder of Red Camera, and Rony Abovitz, founder of Magic Leap. This week our guest is Liz Hyman, CEO of the XR Association. We can be found on Spotify, iTunes, and YouTube.

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Where Will Virtual Reality Take Us? (Jaron Lanier/New Yorker)

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FP Answers: What is a 'behavioural edge' in investing and how does it affect returns? – Financial Post

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Temperament is the unsung hero of investing success

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By Julie Cazzin with Felix Narhi

Q: What is a “behavioural edge” in investing? How does it potentially enhance returns? How can an investor develop it? — Giovanni

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FP Answers: Giovanni, the term behavioural edge is just another way of saying “temperament,” which refers to the habitual way a person behaves in each situation. For example, one person may be easygoing and relaxed while another is more likely to be impatient and assertive.

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Temperament is the unsung hero of investing success. Gaining insight about our innate emotional temperament and learning how to work with it gives investors an edge.

The common misconception is that you need a high level of intelligence to be a successful investor. No doubt, that can be helpful, but based on many years in the industry, I’ve seen it is not always the most important differentiator.

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Once someone has at least an average level of intelligence, it is temperament that often provides the investing edge in leading to better returns over the long term. “Investing is not a business where the guy with the 160 IQ beats the guy with the 130 IQ,” famed investor Warren Buffett has pointed out.

Having the right temperament can potentially enhance investment returns in several ways. An investor who is very reactive to external events is likely to fare poorly over the long term because, quite simply, the world is full of uncertainty and always will be. Markets are highly reactive, abetted by algorithmic trading and automatic rebalancing by exchange-traded funds. Individual investors should not be.

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Research shows that investors who trade frequently or try to time the market underperform. On the other hand, those investors who can remain calm and patient throughout market cycles do better because markets historically trend upwards. Hands down, being calm, cool and collected is the right temperament for an investor to have.

The concept of “homo economicus” — or economic man — describes a hypothetical person who consistently makes rational decisions. In real life, our decisions are coloured by our formative experiences, moods, external circumstances, what we ate for lunch and a host of other factors. These influences drive our behaviours, but they often operate below conscious awareness (even artificial-intelligence apps “hallucinate”).

Given that behaviour is some combination of cognitive and emotional inputs, an investor can create an edge by developing a disciplined investment process that overrides temperament, especially during highly volatile periods.

The term “active patience” means being clear about your investment principles and what you are looking for, and practicing active patience until the right opportunity arises.

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In contrast, regular patience is making an investment decision and sticking with it no matter what, even if it was the wrong decision. The latter approach is unlikely to bring financial success, which is the major goal of investing.

Active patience is what Buffett would call the “fat pitch,” which occurs when the market (occasionally) presents a very attractive opportunity. It is easy to spot a great opportunity and take full advantage of it when an investor has clear principles on what they are looking for.

Can we change our temperament? Recent studies show that personality traits and moods are subject to change, sometimes within the hour, so temperament may not be as fixed as we’ve been led to believe.

Becoming a better investor starts with self-knowledge — and lots of practice. The behavioural traits associated with good investment outcomes are patience, discipline, emotional control and risk awareness. It so happens, these qualities lead to good life outcomes, too. A calm temperament is the bedrock of making sound investment decisions.

Every investor must determine for themselves how to achieve greater equanimity and there is no shortage of books, videos and TikTok tutorials on that evergreen topic. I would also add the importance of staying humble.

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In investing, as in life, the learning never stops. Staying open to new information and having the courage to challenge our own and others’ beliefs and habitual behaviours are the keys to future success.

Felix Narhi is chief investment officer and portfolio manager at PenderFund Capital Management Ltd.

Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here.

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Lenders Rally After India’s Central Bank Eases Investment Curbs – BNN Bloomberg

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(Bloomberg) — Indian banks and shadow lenders rose Thursday after the country’s central bank eased capital requirements for a unique type of investment, a move that may free up more funds for loans.

The gains came after the Reserve Bank of India issued Wednesday modified rules on lenders’ required provisions for exposure to alternative investment funds, or AIFs, that invest in the lenders’ borrowers. Under the new policy, a lender needs to set aside capital only for the amount the AIF invested in the debtor company, and not the entire investment of the lender in the AIF.

Shares of Piramal Enterprises Ltd., which reported among the biggest provisions for such investments, closed 1% higher after rising as much as 6% during the day. A gauge of financial services firms climbed 1%, the most since March 1.

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Lenders led the rally in the broader market, with the NSE Nifty 50 Index registering its best day since beginning of the month.

The RBI’s softening stance came after industry players raised concerns over clarity and uniformity after it announced in December restrictions on lenders’ exposure to AIFs that hold stakes in their borrowers. The latest move will likely help firms including Piramal, HDFC Bank Ltd. and IIFL Finance Ltd. reverse some of their relevant provisions made previously, according to analysts at Citigroup Inc. and Jefferies Financial Group Inc.

Read more: India’s Crackdown on Financial Risks Puts Industry on Watch

“Select private banks and NBFCs like Piramal had provided for their entire AIF exposure during 3Q and could see some write-backs in 4Q if they decide to reverse the excess provision,” Jefferies analyst Bhaskar Basu wrote in a note.

Regulators introduced a flurry of new rules last year to prevent a buildup of financial stress at a time when India’s economy remained resilient in the face of rising interest rates, slowing global growth and unabated geopolitical tensions.

©2024 Bloomberg L.P.

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