I feel like a lot of the commenters here either never actually went on /r/wsb or are trying to glorify it with a narrative that is absolutely disconnected from the real thing. They are not somekind of community trying to "stick it to wall street", they are mostly just random people shitposting all the time, posting their gains and losses. Right now it's GME, before it was SPY/TSLA/NIO. No need to overthink it. Sure t…
What I like about wsb is it is fueled by endless optimism and celebrates wins and losses equally, with a sense of humor that the rest of Reddit or the internet cannot tolerate anymore. In the comments of a good due diligence (DD) post, you usually find people saying "I don't understand anything, but I'm in". And frankly speaking, that's fun. There's no politics or moral posturing on there. HN, on the other hand, is a gold mine for skepticism, almost like a "code review" but for ideas, which can get a bit negative at times. I will continue to visit both communities.
this is exactly it. people say the market is a melt up.. another bubble. but i think that's wrong. It's like the show Billions, actual wallstreet does what wsb is doing ALL THE TIME. You make money when someone else loses money, it's simple. Except this time, the money isn't staying in the fraternity, it's being distributed out to the common folks. Can't have that it seems.
I can assure you that most folks on wall street (speaking about most of the multi-manager hedge funds specifically) have significantly tighter risk limits than anyone on WSB. Frequently drawdowns of even 5-10% can get your sized reduce or get you fired. The YOLO attitude that WSB has is closer to the film "the wolf of wall street" than what actually happens. While Billions is one of the more realistic shows about fin…
So if everyone in Wall Street have significantly tighter risk can you explain the risk linked to the short position taken by Melvin Capital on GME?
How many "Wall Street" were burned by taking high bet that went wrong going around their internal audit?
this a profound (intentional?) misreading of how a short squeeze functions. the shorts are the ones who end up "holding the bag" in that they are contractually obligated to buy shares at current (higher) value in order to cover their position. hence the "taking on wall street" angle - institutional shorts are the chump, not the retail investors (and the institutions going long with them)
no it’s not. the squeeze is what makes the price rise, but once the wsb people start taking their profits, there will no longer be a shortage of shares and it’ll work in reverse, cascading down. it doesn’t just magically stay high forever after the shorts are covered. same cascading down effect can happen if gamestop simply issues new shares even now there’s people on reddit who said they FOMOd in at 150 price point
Yeah, it's definitely a bubble, it's just a question of who takes the big loss -- if Melvin has to cover now, they do, otherwise it's people who are going long at the top & holding (which is what all the r/WSB noise is promoting). This is why Citadel and Point 72 backstopped Melvin -- if they can weather this bubble, that's their best outcome. In fact, increasing the short position now might be a great move.
> 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%
TESLA is up 1707% since january 2020. Apple and Amazon "only" 70%
Can someone extrapolate what happens (hopefully) in a half a year when we get to herd immunity and the economy opens fully when a lot of these people (I'm guessing) will decide to cash-in in their stocks in order to go to a nice vacation, get a new car ect. Can we expect some sort of economic recovery followed by hyperinflation?
Interesting point. I recall some analysis that the froth in the market is being driven by (1) reduced spending -> increased investing, at least for those who kept their jobs (2) cancellation of sports, leading to more speculation as a substitute form of entertainment.
If that's correct, then yeah, we could potentially see a slide. I suspect it won't be massive, and it could be counterbalanced by economic growth that happens at the same time due to the reopening. Don't forget that the stimulus/bailout/money-printing is also driving the market up too.
I feel like a lot of the commenters here either never actually went on /r/wsb or are trying to glorify it with a narrative that is absolutely disconnected from the real thing. They are not somekind of community trying to "stick it to wall street", they are mostly just random people shitposting all the time, posting their gains and losses. Right now it's GME, before it was SPY/TSLA/NIO. No need to overthink it. Sure t…
What I like about wsb is it is fueled by endless optimism and celebrates wins and losses equally, with a sense of humor that the rest of Reddit or the internet cannot tolerate anymore. In the comments of a good due diligence (DD) post, you usually find people saying "I don't understand anything, but I'm in". And frankly speaking, that's fun. There's no politics or moral posturing on there. HN, on the other hand, is a…
You and me both. I go to /r/wsb because I can see some 1047% ROI and some screenshots of people losing their life savings with comments like "That's what you get for betting agains't Papa Musk you f*king retard". It's just so surreal.
this is exactly it. people say the market is a melt up.. another bubble. but i think that's wrong. It's like the show Billions, actual wallstreet does what wsb is doing ALL THE TIME. You make money when someone else loses money, it's simple. Except this time, the money isn't staying in the fraternity, it's being distributed out to the common folks. Can't have that it seems.
Common folks who get in late in the bubble will be the ones who will suffer. This populist mindset that you’re somehow sticking it to big banks or something by paying for trading is funny.
In this case they have actually a pretty interesting goal and motivation. They chose GME because it had a short ratio of 138%. Basically, big hedge funds were betting on the downfall and demise of this stock excessively.
What WSB daytraders are trying to do is to bleed out these hedge funds by buying in and holding. The stock doesn't even have to increase and the damage to the big hedge funds is already happening, see the situation that Melvin Capital is in. To those who participate it is a david vs. goliath situation.
The thing is, what they are trying to do is not that dumb and actually quite interesting, but they won't get anywhere by remaining "civil". They need this to spread and be on the frontpage of Reddit constantly. Negative or positive press helps, because more regular people want to participate if they hear about it.
I think that this will go down in history. Constant timeouts, organised selling at certain intervals, unnatural spikes, we've yet to hear about the shady stuff that keeps this stock from surging even faster considering the current "virality".
Here's my account, that might be survivorship bias. I also traded tech stocks and cryptos and was able to significantly beat the market on the former and quit (also from Amazon) a few years ago. I invested in NVidia after recognizing GPU shortages due to ML continuing hype. I switched to AMD after recognizing their Zen CPUs are slowly beating Intel. I switched to TSMC after realizing their accomplishments are signifi…
The market's complete lack of pricing-in the amazing reviews Zen received was enlightening.
The last few months I've often wondered if the same thing is happening with the M1.
I'm up 180% over the year. Peanuts compared to the WSB people, but I got there with my own intuition. I'm looking into food and entertainment for my next picks. I think the populace will need them over the next year before a general return to the before times mid 2022. We'll see.
> general return to the before times mid 2022 But will this happen? Massive inflation post-Covid isn't really that far fetched. I think there will be no return to the beforeworld.
Every action has an equal and opposite reaction. While the Covid deaths have been incredibly tragic, the 330 of 333 million Americans that survive, and that's assuming the virus and it's variants take 2.5 million more lives before its done with us, will be eager for a return to normalcy, if not outright partying like it's 1999. The play I tried to make last night and wasn't able to get filled today, Bloomin Brands, owner of Outback Steakhouse and other mainstream restaurants that can survive this down turn no matter how long it lasts, is up 1400% since I under bid on that strike and expiry date at 2am this morning. I'm not saying your prediction is guaranteed wrong, but I'm willing to bet against it, and 86% of my call picks are green at the moment, whatever the probability of that might be. The only one that isn't, China Unicom (CHU), essentially got delisted by executive order because the last administration didn't want Americans being able to invest in firms with ties to China's military, such as the largest provider of cell phone service for 1.4 billion people. The pandemic has been an incredible tragedy for so many human beings. I'm trying to position myself to be able to do something about it when the next one comes, which it inevitably will, as the universe trends towards entropy. But I won't be able to do it without capital, so it's worth the risk. Worst case scenario, I'm still a one man consulting shop serving the firms that keep the water running. Barring that, I guess we're hunting and gathering again, and I'm pretty good with a bow. Hopefully it doesn't come to that, and we can all look back at these present days like one of many possible filters we managed to survive on our way to colonizing the stars. That's the future I'd rather plan for, anyway. Albeit while hedging my bets.
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.
Melvin Capital lost Billions last week alone. They needed to get bailed. You have been sold the narrative by the same people who screwed you in 2008. The bubble is the consequence of Hedge Funds getting greedy and repeatedly screwing a "dead company", by overshorting the shares. Don't take my word for it, take Louis Rossmann's, somebody known to stand for the little guy. https://www.youtube.com/watch?v=4EUbJcGoYQ4