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Discussion in 'Politics & Current Events' started by mbardu, Jan 27, 2021.
Pretty shitty thing for him to do TBH.
to be fair, he said to hold IF YOU CAN AFFORD IT.
and, to be fairer, if you CANT afford it you got nothin to be doin on wsb in the first place.
If people weren’t in the on the ground floor, forget about it!
Stop trying to play both sides. You were all rocket ships and "the system is R I G G E D!" on the way up, and now that it's crashing, after I've been saying it's GOING to crash for about a week now, you're trying to backpedal and agree that "the scenario is quite likely" without agreeing with me.
To your note - that's also exactly offset by the fact that retail buyers had to pay 10 times as much to go long a share, if they wanted to try to push the price up. IF everyone involved is taking smaller share counts to get to the same market value (and total market value, not number of shares, is how you gauge portfolio position size), then the math hasn't actually changed.
Questioning basic facts is the last defense of losing an argument. FWIW, I agree with you on wages, and how the return on labor has badly lagged the return on capital for the last 20 or so years.
I don't know why you take it so seriously. As I told you, I'm here #1 for the discussion and entertainment value, not to "win" a discussion on behalf of the HFs like you . Maybe you couldn't read the rocketship in the OP as an ironic joke sprinkled with memes, but in that case I'll let you read the text and you'll see I've said from the start and multiple times that the stock will likely be at 15$ soon - so not sure what strawman you are debating here.
As for the R I G G E D part, I stand by it 100%.
The double standards from the media tolerating behavior from HF but berating WSB. The finger pointing to retail longs but sweeping under the rug the 140% short that caused the whole thing. IBKR dude literally selling he doesn't want to allow buying if he doesn't think the price is fair. The unethical to downright illegal tools used by the HFs (from naked shorting to sell ladders to targeted restrictions on buy orders). R I G G E D , no doubt about it. And it's not because it's working that it's not rigged. Quite the opposite, it's just all the more infuriating.
And although you're fixated on solely debating with yourself that the stock will go down (which nobody has doubted here or elsewhere) by bringing strawmen into the discussion (I mean- who even wanted to debate about fundamentals before you brought it up ), you really don't mind or have anything to say of the "rigged" part of it all. Maybe you feel all is fair game for the big players, but it's apparent that many people feel the opposite.
Finally re: short borrowing costs, as before, you try to patronize while glossing over the actual argument. Of course it's short market value that matters. Which is exactly what I've said. And for example if the short count is divided by 3, while price is multiplied by 9, it's not flat, it's still 3 times as much. We just don't know since we don't have the data.
And of course, the scenario that you describe is the most likely - we've said it multiple times already. We know the house wins in the end. For example, the first manufactured drop to 100 last week was the perfect opportunity to exist most painful shorts, and I called it as much. Doesn't mean it's not interesting to look at other scenarios too. Your general arguments for "it's over" were the same arguments everyone used after the jump to 35. Or to 65. Or to 120. Or to 300. Or to 500. The arguments are bound to be right eventually, because the stock has to go down to its value. You're taking 0 risk in backing that horse and nobody said otherwise. It was just interesting to look at when, and what shenanigans would be involved.
BTW, some basic data on the 10yr return of the S&P500, took a few minutes to run monthly historical price levels as far back as I have access to the total return price series.
*there are 278 months (slightly more than 23 years) where there's a calculatable 10-year total return for the S&P500 (history back to 1/11988).
*There are 23 months, all falling inside the Great Recession of 07-09, when the trailing 10yr return is not positive. That's about 8.3%. 91.7% of the trailing ten year periods are positive.
*the worst trailing ten year period was -32.2%, in February 2009, height of the great recession. The best trailing 10 year return was 523.7%, in August of 2000.
*the average 10yr return was 168.4%, or about 10.4% a year.
Unless you expect inflation to exceed, on average, 10% a year over a 10 year horizon, you can absolutely exceed inflation with an extremely high confidence level (greater than 90%) by investing in diversified equities rather than concentrated high risk highly speculative assets or stock. And this is just looking at historical performance data, and ignoring the fact that stock performance correlates pretty strongly with inflation, so that inflationary periods tend to exhibit stronger stock performance.
This whole idea that participating in a GME bubble is somehow smart investing rather than speculative gambling doesn't hold up to scrutiny and is going to cost a LOT of people a lot of money.
Idunno, this looks like you're taking it pretty seriously to me.
Also, come on, the bolded bit - how the fuck do you even talk about stock valuation without any reference at all to business fundamentals?
I'm not patronizing you in the least. If the stock price increases 10-fold, then shorting the same share count takes 10x as much capital... but buying the same share count also does too. Market value is far more useful than share count here, and the buying power of both longs and shorts with finite capital proportionally decreases as market cap increases. If that seems like an awfully obvious thing to say, it's no less so than pointing out that it takes 10x as much capital to short the same number of shares if the price has increased 10x.
Also, we DO have the data. A whole bunch more people who estimate short interest are coming out and saying it's way down, likely early last week. It wasn't a short squeeze that turned GME into a $350 stock. It was retail buying speculation once the price DID start moving, and trying to pin that on "wall street" and not owning it as the direct buyproduct of bidding up a worthless stock to speculative heights is just irresponsible passing the buck.
Reason I care? Evidently a lot of people on this board piled into this trade. If at all possible I'd rather see as few people in this community as possible turn $5k into $500. As it stands I have a buddy who's currently beating himself up because all his AMC paper gains just evaporated, though thankfully at current pricing he's probably still doubled his money, if has the good sense to get out soon.
Nobody said buying $GME was smart investing, come on.
Where did you see that
Why do you need to make stuff up, just for the pleasure to argue against?
Everyone from the start has called it for what it is. An opportunity to squeeze some $$$ through a technical short squeeze from some overextended HFs.
And I bet plenty of people did just that.
What about another Black Friday run?
Then why have you been dissagreeing with me all along?
"this is a bubble. Short interest has evaporated."
"well, actually, we just don't know."
Yes we do know. A short squeeze isn't a 1,600% trade. This isn't the first time there's ever been forced covering in a stock that's been popular to short.
EDIT - beyond that, I think my broader point was that by Tuesday of last week, buying GME was also not an effective way of hurting hedge funds.
That's now the second most effective way to lose thousands of dollars all at once I've seen discussed on this board!
Very funny- You were the one pushing and pushing that supposedly we don't know what short interest actually is for real until the 9th, but when it supports your argument, suddenly you know 100%. All those people doing the estimates, you discard their numbers when they're against your argument - yet they're 100% on point when they "support" it. Do you not seriously see the irony? It's a bit the same double standards as you not caring that people short at 140%, yet being upset that WSB would pound on the squeeze. Ironically too btw, I've been saying your scenario is the most likely all along. You are just incapable of accepting "most likely" vs "only possible", whereas at least I'm willing to say that there are some things we don't know.
Again, I feel like I could copy paste what I said above, but there is no merit to your debate here. Everybody knows it's going to go down, and that the whole thing is just a short term mechanical move on the price. Literally everybody knows that. Precise fundamentals (is it fair valued at 5 or 15 or 30 based on intrinsic metrics) is irrelevant. Just say it's 30 if you think 15 is too low, that's a blip. You have the same arguments that everyone else had at 35, then 65, then 100, then 200, then 400, and yes they're bound to be right eventually, we all know that. It's like being proud of predicting that when throwing a ball up, it's going to fall back to the ground eventually. The only discussion was how long it's going to take and how high it's going to go, not whether gravity will do it's job.
What do you even mean "a short squeeze isn't a 1,600% trade" ? It's already been that and more for many people, and could have been more, and to more people, had it not been obviously rigged. Clearly, you don't mind that it is rigged. But some people do.
I've never seen this kind of attention given to stock trading before - people at work are in on it, people here are in on it, random youtubers are in on it, etc. To be honest, I'm kinda in that same boat of hoping nobody gets too seriously burned by this.
I think the huge visibility has put this on the radar of a lot of people who plainly don't understand the risk, and might be convinced it's a smart move. A lot of people are talking about trading when they didn't know anything about it before. People are buying in because it's the cool reddit thing to do, not knowing what "shorting" means, and not having any way to know when or how this is going to blow up in their faces - which it totally won't because something something to the moon diamond hands.
Every place I've seen any news about this has been praising WSB for "sticking it to the man", so I'm not sure what double standard you're seeing.
Who are you debating? Does that look like people looking for reasonable smart investing based on fundamentals to you:
Edit: and it is clearly gambling. Nobody went to GME for investing purposes. And nobody should do it unless they're willing to lose the money they're putting in.
Most people lose in gambling, but some people do win. Absolute weighted value of potential returns for any given person is negative, yet some people do gamble, and some people get rich out of it. That's fine and those are the rules.
When Melvin is playing the game, they are making even dumber moves (shorting a stock at 4/5 dollars when a conservative view of the company's current balance sheet is already worth double that market cap), then strong arming the media and their buddies in order to torpedo the company they're shorting - trying to still win despite making dumb moves. And when they're still losing, they get 3B bailouts, and papa Citadel gets to change the rules against those few who are winning some $$$ despite all odds.
R I G G E D
Rigged investing? No of course. Although we could speak at length about how even investing is rigged too, but that's not the discussion here- nobody talked about investing. Rigged gambling yes, but rigged regardless.
I would be VERY surprised if there wasn't at least a small number of people who saw this in the news, saw dollar signs, and risked more than they should have. One mans "gamble" is anothers "investment".
Sigh. This isn't even a debate, this is you refusing to stand by anything you've said.
I said, in response to your stating that short interest was still 120%, that that data point is stale, gave you the FINRA data on it tying those numbers back to the 1/15 filing date, and then pointed to some anecdotal, some non-anecdotal evidence (including Melvin's current holdings no longer including GME, the fact they hadn't required an additional capital infusion, the fact no one else had despite the share price doubling again, the fact that no hedge fund other than Melvin has thus far reported a monthly loss of more than roughly 10%) that led me to believe short's had closed significantly since 1/15. At that point you continued to say "true, you could be right..." but then kept looking for excuses why those shorts had to be open.
You then pointed to a couple firms who attempt to updated reported short interest in real time by using (still lagged, but less so) hedge fund regulatory filings to adjust FINRA numbers. And, guess what? They're estimating short interest is now down to about 30% of float, a fairly normal, even low, value.
Now, I don't pretend to believe those numbers are accurate either. I suspect it's higher, but again because of new short positions coming on, and not because I think there are funds riding out a short thats exploded 1600% to the upside. But, that's one more reason why it's hard to see any more room to run on a short squeeze.
Also, this may seem like nit-picking to you... but, again, my main point here wasn't a call that GME was going to go down, immediately, but rather that the factors driving price movement appeared to have changed, and that what was happening was no longer a short squeeze. I still stand by that. Short squeezes generally are good for 10-20% upside. 50% would be massive. The biggest prior short squeeze, a total outlier, was Volkswagen quadrupling in 2008, and even then I'd suspect some of that was performance chasing rather than forced covering. Gamestop's 1600% gain was simply too big to be driven entirely by people covering shorts, and if this is retail investors chasing performance rather than nefarious hedge funds betting against a company, well, that leads to very different conclusions.
There were absolutely people in this thread who thought it was a savvy buy. And again if I'm coming across all doom and gloom and as a bit of a broken record here, it's because from my first post I thought it was pretty clear that a whole lot of people were reading the situation wrong, in ways that would cause them to lose a lot of money.
Maybe. Just like on TLRY or a bunch of others in the past I suppose.
That said, I'm still making a distinction here. If you know the rules and you decide to gamble anyway, and then you lose, fair enough. At least to some extent, that's on you. If you gamble, but someone changes the rules, or secretly plays by different rules, and then you are more likely to lose than is disclosed, or you lose more so that the cheaters get more $$$, then it's a different game. A rigged game.
Drew, normally you make decent arguments, but I really have to push back on a lot of these points.
You are correct there was no short squeeze on the hedge funds(yet), there were gamma squeezes though caused by the inability to find shares for ITM call options. That is why Melvin needed a $3+billion bailout from Citadel.
The stocks price is widely irrelevant at this point and can go to let’s say $20...it won’t change the stalemate that is in play. They doubled down on their shorts, then bought call options to hedge. The latest data will show that as a net bust rail position, but that isn’t the reality. They need SHARES at the end of the day, no matter the price.
Of the millions in GME shares, how many do you really think redditors own. 20%? 50% It’s probably a lot less than you think, these stocks are in portfolios across the globe. Additionally, once sharks smelled blood they got in as well. It’s not just Reddit vs Wall Street, that’s far too simple.
That’s the gamble, when shares must be covered how high does the price go? This will likely take until March to play out, if it does at all.
I mean, the same is true of an investment. The line is very fuzzy. Not every gamble is an investment, but any investment generally is a gamble.