I’ve been following it for 7-8 years now. Lots great DDs that didn’t turn out as well. After sterilization (ignoring 99% of the nonsense comments), I just see more guess work than anything else. Before GME, there was RiteAid, we all know how that panned out.
Yeah, and there was also TSLA and AMD and MU and others that did great. The point is that they actually write out real strategies/positions as "DD", and you can make your own decisions.
Oh my, good ol' memories of $AMD and $MU. They did pan out!
One of the roles of the fed is to prevent financial markets from suffering liquidity induced meltdowns. It’s a basic service that benefits everyone, like roads or the post office.
So to summarize – large, fully private financial institutions are so entrenched in the economy that them going under would be catastrophic for everyone. They also occasionally take massive risks with their money to make larger profits, and when those backfire the government has to bail them out with public money. And all this is totally not a gambling operation with a public safety net?
The issues affecting liquidity were systemic - it did not just affect large institutions. And of course financial institutions are entrenched in the economy, that is the entire point of financial institutions. Capitalization requirements were too low and they are now much higher — but that meant bank shareholders on the whole did extremely poorly in the financial crisis. And unclear what you mean “bailout with public money” as direct investments in debt and equity instruments by the treasury in 09 were done on extremely favorable terms and were collectively quite profitable for government shareholders.
The price will crash. No one knows when hype will die out and people will stop jumping on the bandwagon, but I'm sure those hedge funds that are covering their short positions aren't going to stick around for the fall.
This makes no sense. The hedge funds that cover their shorts are the ones taking the fall; entering a short at $20 and exiting at $300 is the fall.
Gamestop isn't going to stay at $300. You seriously don't think its going to crash back down to reality? The only ones still in the stock during the fall will be retail investors. So yes, the hedgefunds were hurt, but there will be a lot of pain for the retail investors that jumped on the bandwagon too late and don't get out soon enough.
The price will crash. No one knows when hype will die out and people will stop jumping on the bandwagon, but I'm sure those hedge funds that are covering their short positions aren't going to stick around for the fall.
Those hedge funds covering their short positions have already acknowledged their fall by covering. The whole point of the short is sticking around for the fall.
I mean the fall from the current extremely high price to a reasonable valuation. Retail investors will be the only ones left carrying the bag when that happens.
I was one of the first if not the first people to post weekly options yolo on WSB that gained traction years ago, I get a bit more into it in other posts. Most of these top firms have a specific pipelines from top ivy schools, they are very very selective for a specific person usually from an upper class upbringing. I think Chamath has a point in that there's a lot more people capable of understanding the dynamics of…
degenerate traders: smoke weed during trading hours and do coke after hours
institutional traders: do coke during trading hours and smoke weed after hours
Anyone remember Iomega and zip drives? This same thing happened iomega stock price which was driven up by Yahoo message boards/Motley Fool. "At the close of trading Wednesday, Utah-based Iomega was worth more than Hershey Foods and had twice the market value of Apple Computer." https://www.deseret.com/1996/5/23/19244215/fools-rush-in-sen...
Yeah I remember this article 20 years ago (!) pretty vividly. It was a 15 year old kid who made hundreds of thousands of dollars pumping up stocks on Yahoo message boards.
I think somewhere in this article is where I learned that the stock market is a pretty efficient mechanism of transferfing wealth from the middle class to the rich ...