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The Battle of GameStop

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Re: The Battle of GameStop

#331

Post by sammy533 »

smabie wrote: post #166
in3d wrote: post #71

Earlier quoted context omitted.

You’re a lottery winner, congrats. People made money during the tulip mania also. You’ve given money to the Wall Street, not taken it away. The biggest winners are companies like Robin Hood and hedge funds who buy their order flow data and hedge funds that take advantage of the bubble to play this, while the losers will be small investors who were late to the game and believed the bullshit about how it’s anything mor…

that's not how it works. Email me if you are genuinely interested in the how the institutional investors and market makers fit into this whole ecosystem. I'm tired of explaining market structure/incentives on HN. hint: wall st money was lost on gme, not made. Market makers got killed trying to hedge those deltas, over and over again (it is impossible to statically hedge an option you have sold with a long/short posit…

Can you link your comment where you explain it?

Re: The Battle of GameStop

#332

Post by throwaway0a5e »

nemothekid wrote: post #188
throwaway894345 wrote: post #87

Earlier quoted context omitted.

The argument is that we’re working to keep a roof over our heads now because we YOLOed through college. And while that doesn’t describe me, I had a lot of peers who partied through college, skipped classes, hardly worked, majored in women’s studies / art history / literature / etc and still managed to live in the dorms, buy daily lattes, have the latest iPhones, etc.

> I had a lot of peers who partied through college, skipped classes, hardly worked, majored in women’s studies / art history / literature / etc and still managed to live in the dorms, buy daily lattes, have the latest iPhones, etc. Did you go to a 4 year private school (possibly a non-Ivy)? I feel like you are describing a class of Americans who are oblivious to their privilege, but are mistakenly labeled as the work…

I went to a four year state school in a state mostly free from major metropolitan areas full of stupid money that tend to mint a lot of those types of people. Yet there were still a lot of those people on campus. I wouldn't say a majority but they were there.

Re: The Battle of GameStop

#333

Post by chasd00 »

gruez wrote: post #14
dvt wrote: post #6

> The same emotion that caused us to root for the thieves in Ocean’s 11 is what makes Wall Street Bets so enticing. Put frankly, Millennials are tired of getting fucked by the man. When you’re underemployed with $100,000 in student loan debt, your financial situation feels overwhelming. You really don’t want to take the advice of your parents or CNBC talking heads [5] to invest 10% of your salary for a 4% annual retu…

>It's a never-ending shit-show. At least some of us are getting rich in /r/wallstreetbets. This is sad because most of what you've said can be applied to lotteries as well, which historically has been criticized as being a "tax" on the poor. The end result is the same: people putting themselves in a worse place financially (on average), just so they can cope with their bleak existence.

Isn’t this an explore/exploit problem? If you have time to recover then do it, if not then better to cash in on a sure thing even if the upside is lower.

Re: The Battle of GameStop

#334

Post by jameshart »

aeternum wrote: post #179
jameshart wrote: post #137

Earlier quoted context omitted.

You played a game, you played it well, and you won. Well done. But don't pretend that that means everyone can do it, because patently they can't: you won your bets, a bunch of other people lost theirs. No value that wouldn't otherwise have been created got made, you just shifted the balance of how the rewards are distributed in your favor, and away from someone else. As a system for distributing the benefits of econo…

If you believe that op played the game well, then he successfully took capital from less efficient companies and allocated it to new more efficient companies. This creates value.

Market theory only says that the aggregate effect of market activity is to allocate capital efficiently. The claim is that it does so by broadly rewarding investors whose decisions maximize value creation, encouraging more such decisions in general over the long term.

It does NOT say that any individual investment decision that produces a reward for the investor must necessarily have improved the allocation of capital to maximize value.

Options trading in particular has only indirect market-making effects on how the primary capital allocation market works. The existence of the options market helps the primary market discover efficient allocations (the theory goes). Participating in the options market has a side effect of increasing efficiency, but the way the options market allocates rewards is less connected to the information value that your trades contributed to the market.

There’s an investment product some governments sell called a ‘lottery bond’. People buy the bond, then periodically, rather than every bond being redeemed for a small premium over its value, one randomly selected bond is redeemed for a much higher value.

As a thanks for participating in that bond market and letting the government use your capital, instead of a predictable investment return the government offers a chance of a life changing lottery win.

This isn’t better or worse than a traditional bond offering, it just offers a different strategy for allocating the rewards for investing some capital in that government.

The person who wins a lottery bond didn’t do anything better or different than a lottery bond loser - both of them contributed the same value to the market in terms of increasing capital allocation efficiency. But the rewards were distributed unevenly - which is by design and both of them knew that going in.

Options traders take the same deal. Playing the game has the chance of winning big; participating in the game has a side effect of producing value. And the way the rewards are allocated for playing... don’t matter too much.

Re: The Battle of GameStop

#335

Post by willis936 »

sokoloff wrote: post #254
willis936 wrote: post #97

Earlier quoted context omitted.

>The argument is that we’re working to keep a roof over our heads now because we YOLOed through college. And while that doesn’t describe me Nor me. I worked throughout all of undergrad. My work paid for my grad degree. I have an MSEE and am looking at $50k of student debt. My income is such that I expect the only way my debt will go away in the next ten years is through PSLF. Owning a house before I’m 40? I’m not so…

You have an advanced degree in EE, paid for by work who valued that enough to pay for it, and don't expect to be able to clear $50K in student loans in 10 years. Are you still working in a job requiring that degree, because if so, that does seem like you're getting shafted (especially compared to the equivalent on the CS side of EE/CS).

Yes, I am. I’m working as an engineer on a physics project.

Re: The Battle of GameStop

#336

Post by obviouspenguin »

stewx wrote: post #319
dvt wrote: post #6

> The same emotion that caused us to root for the thieves in Ocean’s 11 is what makes Wall Street Bets so enticing. Put frankly, Millennials are tired of getting fucked by the man. When you’re underemployed with $100,000 in student loan debt, your financial situation feels overwhelming. You really don’t want to take the advice of your parents or CNBC talking heads [5] to invest 10% of your salary for a 4% annual retu…

> invest 10% of your salary for a 4% annual return Except we have had bull markets for several years now. It has been an excellent time to be in the market. S&P500 returns for the past 5 years: 2016: 9.54% 2017: 19.42% 2018: -6.24% 2019: 28.88% 2020: 16.26%

Extremely rapid growth in assets when wages are not increasing at the same rate is what hurts younger generations.

Re: The Battle of GameStop

#337

Post by rickspencer3 »

dvt wrote: post #6

> The same emotion that caused us to root for the thieves in Ocean’s 11 is what makes Wall Street Bets so enticing. Put frankly, Millennials are tired of getting fucked by the man. When you’re underemployed with $100,000 in student loan debt, your financial situation feels overwhelming. You really don’t want to take the advice of your parents or CNBC talking heads [5] to invest 10% of your salary for a 4% annual retu…

How many years has it been in the USA since a cohort graduated college into a functioning version of capitalism?

Re: The Battle of GameStop

#338

Post by soybean »

in3d wrote: post #56
dvt wrote: post #6

> The same emotion that caused us to root for the thieves in Ocean’s 11 is what makes Wall Street Bets so enticing. Put frankly, Millennials are tired of getting fucked by the man. When you’re underemployed with $100,000 in student loan debt, your financial situation feels overwhelming. You really don’t want to take the advice of your parents or CNBC talking heads [5] to invest 10% of your salary for a 4% annual retu…

Getting rich through a greater fool theory and creating a bubble in a small stock is not something I’d be proud of. You’re sticking it to the least knowledge Johnny-come-latelies who will be left holding the bag. Thinking that you’re screwing Goldman Sachs is delusional.

It's the greed of the fund managers that kept shorting this company that will be driving the price way up. They will eventually need to cover their shorts causing the spike. the money will be payed mostly by these greedy fat cats

Re: The Battle of GameStop

#339

Post by jeffbee »

PartiallyTyped wrote: post #226
jeffbee wrote: post #123

Earlier quoted context omitted.

They will probably use the infusion of money to just ride out this raid and make a mint when the wsb bubble pops, which it inevitably will. To say that the hedge fund is "near failure" is the same as saying they did not fail. If they bridge this gap they win double.

They need to buy the stock back and pay interest. They shorted the stock at say 20, or 30. Now they will have to buy it back at 90 and pay interest on it. They have repeatedly resorted to market manipulation to drive the price down and cut their losses, but people are not selling, there do not exist enough shares for them to close their position. They screwed up royally, they doubled down, from 128% shorted stock to…

Why do you think they need to close their position? They need to meet margin requirements, which they can do by raising cash. Closing their position is the worst of their options and I don’t see why they would take it.

Everyone who is short has to pay the vig every day, so that hasn’t changed.

Re: The Battle of GameStop

#340

Post by throwaway0a5e »

killtimeatwork wrote: post #209
watwut wrote: post #187

Earlier quoted context omitted.

> partied through college, skipped classes, hardly worked, majored in women’s studies / art history / literature / Some of those things are not like the other. I studied computer science, plenty of people partied and as far as I can tell, people who studied humanities like literature had to work more. It was not easier major in terms of how much you have to work. I liked computer science, so I am always surprised abo…

The reality is that, 50 years ago, when only the smartest people attented colleges, a college degree used to be a proxy for aptitude (a combination of intelligence and willingness to work hard). It didn't matter that much what you studied, just having that college diploma meant that you're smart enough to be able to contribute in a non-trivial manner in any company, and will likely be heading for a managerial positio…

>the diploma means that you're within 60th percentile or somewhere around that, which is not what companies need.

Need or want?

We've spent 30yr trying very hard to remove individual judgement and responsibility from the corporate world. Most employers larger than say ~75 people likely have enough process built up that they can skate by on people who mindlessly follow process with a few talented people sprinkled about to spice things up.

>while the truth is, most people are just not talented enough to be employed into demanding and well-paying office positions that most of us here work in.

The hardest part about working as a programmer is getting your first job as a programmer which usually means suffering through Calc 3 you'll never think very hard about again. Getting a pay stub is on FAANG letterhead doesn't automatically equate with intelligence though many here may keep telling themselves that. The bulk of the SWEs and SREs in those companies are just going through the motions and reacting to situations as any other person operating under the same constraints would. Besides basic problem solving ability that all humans have and a background with experiences that qualify you for the job there's nothing special about it.

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