I: The Greatest Run In History
Archie Karas was slouched over a bar at the Bellagio, nursing a whiskey and a bad beat story. He had that look about him – the hollowed-out eyes, the three-day stubble, the rumpled suit that had seen better days. He was, in short, the very picture of a man who had just watched his last chip disappear into the unforgiving felt of a Vegas poker table.
Archie is not your typical hard-luck case. Far from it. A few years back, Archie rolled into this very same town with nothing more than fifty bucks in his pocket and a glow in his eye. Six months later, he walked out with forty million.
That’s not a typo. Forty million dollars, from a $50 stake. It’s the stuff of gambling legend, a run of luck so improbable that it hardly seems real. But it is real. Archie Karas really did turn pocket change into a fortune, one heart-stopping bet at a time.
It started innocently enough, with a $10,000 loan from a poker buddy to stake him at the table. Archie promptly turned that into $30,000 playing Razz, a devilishly tricky form of lowball poker. With his bankroll burning a hole in his pocket, Archie sauntered over to the pool room, where a wealthy real estate tycoon was waiting to play him at $5,000 a game. Archie cleaned him out to the tune of $1.2 million.
Now, you have to understand, money has a way of attracting more money in high-stakes Vegas. Word got around that there was a Greek immigrant with a golden touch and a seemingly endless bankroll, and every big-time gambler and poker pro in town wanted a piece of him. They lined up to take their shot, legends of the felt like Stu Ungar and Chip Reese. One by one, Archie knocked them down.
By the time the dust settled, six months after that fateful $10,000 loan, Archie was up an astonishing $40 million. Forty million! It was a run for the ages, an impossible heater that catapulted an unknown man to the pinnacle of the gambling world.
But here’s the cruel irony of it all. In the end, Archie’s biggest opponent wasn’t Stuey or Chip or any of those other poker sharks. It was himself. And the cockiness that came with winning big.
II: Gambler’s Paradise
Wall Street, on a fundamental level, isn’t so different from Vegas. Sure, the suits are nicer, and the stakes are higher. But at its core, it’s still a casino – a place where fortunes are won and lost on the turn of a card or the tick of a stock.
Now, there’s a new crop of gamblers lining up at the table: retail day traders. Flush with stimulus checks and armed with commission-free trading apps, they stormed the stock market in 2020, convinced they could beat the odds with a little research and a lot of guts.
But here’s the hard truth that those slick trading app tutorials don’t tell you. The vast majority of day traders are just throwing their money away. The statistics are sobering. One study found that 80% – that’s right, 80% – of day traders lose money over the long haul (1). Another put the figure as high as 95% (2). Imagine those odds in Vegas – you’d never pull up a chair at that table.
Why is day trading such an impossible game? Well, for starters, you’re up against some heavy hitters. On the other side of your Robinhood trades are the likes of Goldman Sachs and Citadel – huge institutional investors with armies of PHDs, AI-powered algorithms, and ultra-high-speed data feeds. When you’re squinting at candlestick charts on your iPhone, trying to time the perfect entry, they’re running circles around you.
But it’s not just that the odds are rigged against the little guy. Day trading is a psychological minefield, a high-stakes battle against your own worst impulses. Those flashing tickers and one-click trades are designed to keep you in the game, to give you just enough of a dopamine hit to keep you hooked. It’s a lot like a slot machine, doling out small wins to string you along until you’ve bled your account dry.
III: The Making of a Meme Millionaire
For a brief, shining moment in the spring of 2021, Glauber Contessoto was the poster boy for the crazy, casino-like investing craze that took over during the pandemic.
Contessoto wasn’t your typical Wall Street high roller. He was 33 years old, a videographer by trade, scraping by in Los Angeles on $50,000 a year. But he had a dream, a get-rich-quick fantasy that would have seemed ludicrous in any other era. Contessoto was going to bet it all – his entire $250,000 in savings – on a joke cryptocurrency called Dogecoin.
Dogecoin was created as a parody of Bitcoin, using the Shiba Inu “doge” meme as its mascot. For most of its existence, it traded for fractions of a penny, a plaything for crypto nerds with a sense of humor.
But in the topsy-turvy world of pandemic investing, where Elon Musk tweets were market movers and Reddit forums were the new Wall Street trading desks, Dogecoin became the hottest ticket in town. Celebrities were hawking it, TikTok influencers were hyping it, and everyday investors were piling in with reckless abandon.
Including, as it turned out, Contessoto. In February 2021, he took his life savings and dumped every penny into Dogecoin. When his bemused friends and family asked why, he had a ready answer: “I’m going to be the world’s first Dogecoin millionaire.”
It was a bold proclamation, the kind of thing that would get you laughed out of any respectable investment firm. But in the meme stock era, it was a rallying cry. And incredibly, improbably, it came true.
In just two months, Dogecoin went on a tear that made crypto veterans do a double-take. It shot up by 8,000%, driven by a perfect storm of Elon Musk tweets, TikTok hype, and pandemic-induced FOMO. By April, Contessoto’s $250,000 moonshot had grown to a jaw-dropping $2.9 million (3). The Dogecoin Millionaire was born.
It was a feel-good story for the Covid age, a modern-day fairy tale of the little guy striking it rich on a wing and a prayer. Media outlets lined up to tell his story, and Dogecoin investors hailed him as a folk hero, a living, breathing embodiment of the anti-establishment ethos driving the meme stock moment.
But if there’s one thing about fairy tales, it’s that they are filled with surprises.
IV: The Hype Train Derails
The turning point came on a Saturday night in May, when Elon Musk – the self-anointed “Dogefather” – hosted Saturday Night Live. Dogecoin faithful watched with bated breath, expecting the ultimate market catalyst, the mother of all Musk pumps. After all, this was the man who added billions to Dogecoin’s market cap with a single, cryptic tweet: “One word: Doge.”
But something funny happened when Musk took the SNL stage. Instead of pumping Dogecoin to the moon, he called it a “hustle” in a satirical sketch. The price, which had been hovering around 69 cents (another meme, naturally), promptly tanked. It cratered by 30% over the course of the show, and kept right on falling in the days that followed (4).
For our Dogecoin Millionaire, it was the start of a very bad trip. Contessoto, still a true believer, had held onto his Dogecoin stash through its dizzying rise, turning down millions in easy profits along the way. He was going to ride this rocket all the way to Mars, Elon be damned.
But crypto, as they say, is not for the faint of heart. In the blink of an eye, Contessoto watched his Dogecoin millions evaporate. A million dollars gone in a single day as the meme bubble burst. And still, with the conviction of a religious zealot, he held on.
You can guess how this story ends. Dogecoin never recovered from the SNL debacle. By the summer of 2021, it was trading back where it started, at a fraction of a penny. The TikTok hype machine moved on to the next shiny object, the Elon tweets grew more sporadic and less potent.
The Dogecoin Millionaire, once a viral sensation, faded from the headlines.
V: The Illusion of Easy Money
Which brings us back to Archie Karas, the man who turned $50 into $40 million. What happened to him, you ask? Well, I’ll tell you.
Remember, when we left off, Archie was on top of the world. He had $40 million in cold, hard cash. But here’s the thing, even the best gamblers are never satisfied. There’s always another score, another whale to hunt, another chance to push luck to its breaking point.
For Archie, that meant hitting the dice tables. Craps, to be specific. It’s a pure game of chance – just you, the dice, and the cruel whims of probability. And for a while, probability was Archie’s on Archie’s side. He rode a hot streak to end all hot streaks, raking in millions upon millions as the casino crowds watched in slack-jawed amazement.
But then, as hot streaks do, it ended. Archie hit a bad run, a soul-crushing, bankroll-annihilating stretch that makes grown men weep. In the space of three terrible weeks, he lost $11 million.
Desperate to recoup his losses, Archie turned to baccarat. Another dance with the devil. And once again, the devil won. Over the next few months, Archie hemorrhaged money at an alarming clip. $10 million here, $15 million there – it all started to blur together in a haze of bad beats and worse decisions.
By the time it was over, the $40 million was gone. Every last penny, lost to the very same Vegas house that had once hailed him as a living legend. Archie Karas, the man who couldn’t lose, had crashed back down to earth in the most spectacular fashion imaginable.
Again, the house had won.
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Today’s Theories
The Icarus Effect – In Greek mythology, Icarus flew too close to the sun, melting his waxen wings and plummeting to his demise. This ancient tale serves as a powerful metaphor for the dangers of unchecked ambition and the pursuit of easy riches. What lessons can be drawn from the stories of Archie Karas and Glauber Contessoto about the dangers of chasing easy money and the importance of knowing when to walk away? How much is enough? And when do you take your money off the table?
The House Advantage – Does the house always win, and how does this concept apply to retail day trading? Much like in a casino, the odds are heavily stacked against the average day trader. The vast majority of day traders lose money in the long run, with some studies putting the failure rate as high as 95%. But what if retail traders had access to the same tools as hedge fund managers and other institutional investors? Could retail traders compete on an even playing field?
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Endnotes
1. “Day Trading vs. Reality: Can Day Traders Really Make Money?” Big Think, https://bigthink.com/sponsored/day-trading-reality.
2. Ibid
3. “He’s a Dogecoin Millionaire. And He’s Not Selling.” The New York Times, 14 May 2021, https://www.nytimes.com/2021/05/14/technology/hes-a-dogecoin-millionaire-and-hes-not-selling.html.
4. “Elon Musk’s SNL Appearance Tanked Dogecoin—Here’s Why” Mashable, https://mashable.com/article/elon-musk-dogecoin-tank-snl.
