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The Battle of GameStop

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Re: The Battle of GameStop

#381

Post by gruez »

ollifi wrote: post #224
gruez wrote: post #14

Earlier quoted context omitted.

>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.

/r/wsb is kind of insanity, but I’ve come to think that maybe young person can YOLO a bit against the odds somewhere in life. If something returns poorly on average, but has high payouts at the top it might just work out. Your life won’t be the average case but single sample. Lottery is too improbable but some other things ”no rational person would do” can be ok. Main thing is to get over with it soon and protect the…

>If something returns poorly on average, but has high payouts at the top it might just work out. Your life won’t be the average case but single sample.

This almost certainly results in a worse average outcome, because of diminishing returns on income. Winning a 10M jackpot won't bring you 10,000 times the happiness compared to finding $1000 on the ground.

Re: The Battle of GameStop

#382

Post by gpm »

Centigonal wrote: post #59
0b01 wrote: post #31

Earlier quoted context omitted.

In fact, Citadel Securities has gained a lot money from the $GME event. Citadel Securities pays tens of millions of dollars for Robinhood order flow.

Is Citadel really making a lot of money from the GME squeeze? I know they rebate Robinhood for order flow (I've even commented about it [1]), but I thought events like this were hard for MM firms to capitalize on because of the unpredictable nature of the price action and the high cost of hedging (there are no shorts available, how do you even delta hedge in that situation?). Am I missing something? [1] https://news.…

Citadel is a market maker on the nyse... They can naked short GME.

Re: The Battle of GameStop

#383

Post by gruez »

christophilus wrote: post #281
pmorici wrote: post #22

Earlier quoted context omitted.

I wouldn’t compare what happened with GME to the lottery at least not for the people who understood why they were doing what they were doing.

Exactly. I first heard the bull thesis from Michael Burry. Hardly a gambler. GME was comically over shorted in a console release year. Burry predicted a short squeeze way before WSB picked it up.

>Exactly. I first heard the bull thesis from Michael Burry. Hardly a gambler.

The problem with this argument is that there's always an "expert" that can justify your speculative positions.

Re: The Battle of GameStop

#384

Post by killtimeatwork »

throwaway0a5e wrote: post #340
killtimeatwork wrote: post #209

Earlier quoted context omitted.

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 abou…

> Want or need?

I think it's need. There's plenty of chairwarmers hired as senior managers in my place of employment. The company would be doing radically better if these people were genuinely talented and dedicated, but apparently it was too hard to hire such folks, so we got those impostors instead. The whole department is a mess as a result. And it's mostly the same across the whole org. The world just doesn't have that many talented and dedicated people, and also a lot of them decide to just launch their own businesses instead of being a part of some corporate charade.

> 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.

Are you aware of basic problem solving abilities of average human? They're... not that great. Intelligence plays a key role in constructing good ad-hoc working theories as to the hidden/internal state of the mess you're currently working with. Smart people are just better/faster at it and the more complex the problem is (and we're working with problems of huge complexity - often with codebases that are to large to understand within a lifetime), the more important that becomes. Not to mention that there's plenty of people who just don't tolerate (emotionally) uncertainty too well, and they feel terrible at jobs like ours, preferring to be a supermarket clerk or doing something else with minimum uncertainty, exploration and decision-making. For example, my mother once worked with a woman who has severely stressed over having to learn to operate a new kind of cash register (and she was a clerk at a store). Imagine how well would she do in the world of front-end development...

Re: The Battle of GameStop

#385

Post by gruez »

chasd00 wrote: post #333
gruez wrote: post #14

Earlier quoted context omitted.

>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.

Not really. The explore/exploit analogy only works if the higher risk investments have higher returns, as we see with stocks (higher risk, higher returns) vs bonds (lower risk, lower returns). I'm skeptical that speculating on options have higher returns commensurate with their risks.

Re: The Battle of GameStop

#386

Post by gruez »

8note wrote: post #119
katbyte wrote: post #98

Earlier quoted context omitted.

But we all know what the lottery is, sadly playing the stock market is glamorized beyond belief rather then shown for what it is:gambling

It's lightly better than gambling, since you still end up with ownership of something

These people are most likely buying options. Saying that they end up with ownership of something is a stretch.

Re: The Battle of GameStop

#387

Post by mywittyname »

TheAdamAndChe wrote: post #363
blackrock wrote: post #242

Earlier quoted context omitted.

It’s even worse than this. The government feigns that they can’t do anything. And that everything is the result of the market. Meanwhile, they easily pass bills to increase their own pay, or find magic money to pay for their military wars. And then, after screwing up the 2008 crisis, they stopped building homes. And the homes that were foreclosed on, they allowed the rich corporations to buy them up for pennies on th…

Entry level homes in non-trendy areas are much cheaper. My home is about $110k.

>My home is about $110k.

Like, it was worth that when you bought it several years ago? I mean, I live in the midwest too, where it used to be possible to get a modest home in the burbs for about that price. But those homes are now gone, they disappeared over the past few years as they were purchased in all-cash transactions by flippers who threw some paint and flooring in them before selling them for twice the price.

Housing in the cheap areas is being hit really hard. Lots of areas are seeing coastal-levels of YoY price inflation. Mine is ~18% YoY according to Zillow.

Re: The Battle of GameStop

#388

Post by killtimeatwork »

throwaway894345 wrote: post #326
killtimeatwork wrote: post #320

Earlier quoted context omitted.

Perhaps that's true in the US. Here in Eastern Europe, University education was pretty elite (in terms of intellectual requirements) before the "democratization" of higher ed. Heck, high school before the war was most likely mentally harder than many higher degrees are today.

That sounds like you agree with the parent, but your tone suggests disagreement?

I neither agree nor disagree, I'm just not familiar with the US situation. I'm certainly aware that, especially historically (pre-XX century), US universities were finishing school for the well-off, but I don't know how/if the dynamics changed after the WWII, with introduction of GI bill etc.

Re: The Battle of GameStop

#389

Post by gruez »

willis936 wrote: post #378
skeeter2020 wrote: post #364

Earlier quoted context omitted.

so this is a choice

It's an indicator of larger issues. I took a position that I am qualified for, not overqualified for.

So to confirm, you took the job because there are no higher paying jobs available? I think GP was assuming that you had higher paying job options (given that EE jobs are high paying and generally in demand), but you chose to forgo that in favor of a research/academic position.

Re: The Battle of GameStop

#390

Post by PartiallyTyped »

jeffbee wrote: post #339
PartiallyTyped wrote: post #226

Earlier quoted context omitted.

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.

It costs nothing to hold. They have to choose between a hail Mary and closing.
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