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Reddit's GameStop, AMC surge is the new Occupy movement

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Re: Reddit's GameStop, AMC surge is the new Occupy movement

#31

Post by sgpl »

fassssst wrote: post #8

It’s terrifying because so many people have retirement funds tied up in stocks and this has the potential to decrease everyone’s trust in the idea of stocks.

In the grand scheme of things, this (GME, AMC, etc.) is a really small pool of money at play.

For reference, the Norway Oil Fund [1] holds almost 1% of the world's stock which amounts to somewhere in the neighbourhood of 1 trillion dollars. So the overall size of the investable asset universe for pension funds is really large (real estate, private equity, hedge funds, venture funds, stocks, credit/bonds, etc.) and pretty much all well run pension funds have a diversification mandate so there's no concentration in one asset class.

[1] https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#32

Post by zaphod12 »

cordite wrote: post #15
djoldman wrote: post #13

Earlier quoted context omitted.

1. There isn't any one entity that is short 140% of the GME float. 2. If a stock shouldn't be allowed to be sold short past 100% then we should outlaw subletting apartments. Why shouldn't someone be allowed to pay to borrow something, and then rent it out? How is that manipulative in and of itself?

Could you elaborate on how shorting past 100% is comparable to subletting? How is shorting alike borrowing something?

shorting is identically borrowing. You borrow the stock from someone who owns it, and resell it at the current price. Then later down the road, you buy it back at the lower price and return it to the original owner. You have made money on whatever that difference is. This is not a metaphor, this is how shorting operates.

It can easily go over 100% if the person you sell it to also lends it to someone to short (and they have no clue that the share they bought was involved a short, already).

Note - this is why it's possible to lose your shirt when you are shorting. Eventually you will need to return that stock you've sold, which means buying it at whatever the price is. So if it goes WAAAY up, you lose a lot of money. In contrast to buying a stock, where you can only lose your position.

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#33

Post by Karunamon »

emteycz wrote: post #28
ramblerman wrote: post #4

Earlier quoted context omitted.

I also don't care about a hedge fund losing out but Id hardly call the current value of Gamestop to be "real" Economics. And for the few /r/wsb guys and girls making a killing there are a lot more late comers who will lose big, and can't afford to.

What is "real economics" if law, contracts and supply/demand isn't real economics? Stock price was never supposed to closely mirror company's financials, that's a meme pushed by socialists that want to portray the stock market as wrong ("out of reality"). The financials are merely a indicator. It's stock market and what matters are the dynamics of that market, and the company itself is only a small part of that.

It's hard to not read this as a pathological corner case.

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#34

Post by Hamuko »

anthk wrote: post #3

Good. I'm tired of fake Economics where the value of a company or the product is not made from the real value of it, while some yuppies get rich in the proccess. The more they cry, the better. Hope is collapses so "middle" and low class workers can get fair prices of what they earn by doing actual hard work. Because this will create a good crash, dont fool about it. It will harm everyone, but at least this Century wi…

>I'm tired of fake Economics where the value of a company or the product is not made from the real value of it

I still don't understand how Tesla is valued so high when they're still figuring out panel gaps.

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#35

Post by krona »

ramblerman wrote: post #4
anthk wrote: post #3

Good. I'm tired of fake Economics where the value of a company or the product is not made from the real value of it, while some yuppies get rich in the proccess. The more they cry, the better. Hope is collapses so "middle" and low class workers can get fair prices of what they earn by doing actual hard work. Because this will create a good crash, dont fool about it. It will harm everyone, but at least this Century wi…

I also don't care about a hedge fund losing out but Id hardly call the current value of Gamestop to be "real" Economics. And for the few /r/wsb guys and girls making a killing there are a lot more late comers who will lose big, and can't afford to.

Nobody on wsb went out to make a 'killing', or at least not in the way you think. You don't know the half of it.

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#36

Post by monoideism »

ramblerman wrote: post #4
anthk wrote: post #3

Good. I'm tired of fake Economics where the value of a company or the product is not made from the real value of it, while some yuppies get rich in the proccess. The more they cry, the better. Hope is collapses so "middle" and low class workers can get fair prices of what they earn by doing actual hard work. Because this will create a good crash, dont fool about it. It will harm everyone, but at least this Century wi…

I also don't care about a hedge fund losing out but Id hardly call the current value of Gamestop to be "real" Economics. And for the few /r/wsb guys and girls making a killing there are a lot more late comers who will lose big, and can't afford to.

Parent isn't claiming GME is "real" economics. Parent is claiming GME will help pull down our current fake system, and help the middle and lower classes receive fair compensation from the system. Whether this approach works or not, I don't know. But the status quo isn't tenable for a democratic society.

This chart says it all:

https://www.epi.org/productivity-pay-gap/

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#37

Post by kuu »

monoideism wrote: post #36
ramblerman wrote: post #4

Earlier quoted context omitted.

I also don't care about a hedge fund losing out but Id hardly call the current value of Gamestop to be "real" Economics. And for the few /r/wsb guys and girls making a killing there are a lot more late comers who will lose big, and can't afford to.

Parent isn't claiming GME is "real" economics. Parent is claiming GME will help pull down our current fake system, and help the middle and lower classes receive fair compensation from the system. Whether this approach works or not, I don't know. But the status quo isn't tenable for a democratic society. This chart says it all: https://www.epi.org/productivity-pay-gap/

What did happen around 1979 to have such a clear change?

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#38

Post by hospadar »

djoldman wrote: post #13
protomyth wrote: post #10

Shorting a stock 140% is the market manipulation and should be criminal. Anything a large group does after some hedge fund pulls that stunt is fair game.

1. There isn't any one entity that is short 140% of the GME float. 2. If a stock shouldn't be allowed to be sold short past 100% then we should outlaw subletting apartments. Why shouldn't someone be allowed to pay to borrow something, and then rent it out? How is that manipulative in and of itself?

I see the subletting analogy, but there's a big difference between subletting an apartment over the summer to minimize your losses (usually for ≤ your rent) and renting all the apartments in manhattan, then subletting them for profit after you corner the market.

The former seems fine, and yah, I guess I do think that the latter should be illegal, because it only benefits some wealthy jerk who can afford to corner a market.

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#39

Post by avidphantasm »

djoldman wrote: post #13
protomyth wrote: post #10

Shorting a stock 140% is the market manipulation and should be criminal. Anything a large group does after some hedge fund pulls that stunt is fair game.

1. There isn't any one entity that is short 140% of the GME float. 2. If a stock shouldn't be allowed to be sold short past 100% then we should outlaw subletting apartments. Why shouldn't someone be allowed to pay to borrow something, and then rent it out? How is that manipulative in and of itself?

Can anyone explain what utility, to the real economy, that short selling stocks provides? Practically speaking, why is shorting useful? What problems in the financial system does it solve. Asking in earnest.

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#40

Post by manigandham »

auto wrote: post #22
djoldman wrote: post #13

Earlier quoted context omitted.

1. There isn't any one entity that is short 140% of the GME float. 2. If a stock shouldn't be allowed to be sold short past 100% then we should outlaw subletting apartments. Why shouldn't someone be allowed to pay to borrow something, and then rent it out? How is that manipulative in and of itself?

So if there isn't one entity short 140%, is it that there are multiple chains of shorting, like shorts on top of shorts that leads to the 140% target? Not totally familiar with all this, just trying to understand.

You buy a share. You now rent it to someone else. They sell the share again (and hope to buy it back later at a lower price). Same share has been sold twice. The 2nd buyer of that share can then rent it again to another seller which increases total short interest.
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