WallStreetBets vs WallStreet: It's not about the money anymore • Hacker News Board

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#431

Post by kibwen » Thu, Jan 28, 2021, 4:53 PM UTC

paulddraper wrote: post #421

kibwen wrote: post #413

Earlier quoted context omitted.

Its nice that more people are coming to this realization, though I'll admit that it's a bit funny that this, of all events, is what's making people realize that extreme wealth disparity is a problem. The existence of billionaires isn't even good for the free market, let alone free society. In order for a market to be rational, the threat of losing money has to actually mean something, which it doesn't for the ultra-r…

Eh. The problem isn't that billions or billionaires exist at all. I see no issue with that. The problem is systems that resist merit. You make terrible investment decisions with the portfolio but it doesn't matter? (I think it will matter FWIW.)

In what way do you think it will matter? Can you be more specific?

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#432

Post by TameAntelope » Thu, Jan 28, 2021, 5:00 PM UTC

cocoa19 wrote: post #402

TameAntelope wrote: post #181

Earlier quoted context omitted.

Then you have not been paying attention to WSB for very long. It's full of degenerate gamblers, so many loss porn posts come from people saying, "How will I pay my rent this month?" Most of the time, WSB is a community to commiserate about losses and lie about gains.

"How will I pay my rent this month?" That's something I'd say to be funny, especially on reddit.

I am with you historically, but people seem to be taking this way more seriously than previous similar shenanigans, so I'm re-evaluating my prior dismissals.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#433

Post by dcolkitt » Thu, Jan 28, 2021, 5:01 PM UTC

totalZero wrote: post #129

dcolkitt wrote: post #51

Earlier quoted context omitted.

> high frequency traders are probably making a bundle. I've heard from a former colleague at a major HFT firm, that they hit their entire revenue target for the year, just in the past week.

What kind of self-respecting HFT firm has revenue targets? Surely you're talking about P&L.

Trading revenue. As in “Goldman reported trading revenue of $X”

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#434

Post by ryandrake » Thu, Jan 28, 2021, 5:04 PM UTC

ufmace wrote: post #398

bidirectional wrote: post #19

Once again, this insistence on viewing 'Wall Street' as a monolothic entity. The largest asset management firm on Earth holds over 9 million Gamestop stock, none of the big banks that received bailouts in 08 are affected by this, 99.9% of hedge funds are not affected by this, high frequency traders are probably making a bundle. Institutional money was long Gamestop before this story entered the public consciousness.…

I'm wondering about this. I was a little skeptical of the whole David-vs-Goliath bring-down-wall-st thing. But if it's really true that this is just one small and low-relevance hedge fund getting their ass handed to them for doing something dumb, then why does it feel like there's a whole machine trying so hard to tear down /r/wallstreetbets and distort the entire retail investing market to stop it? Why did Discord b…

Nobody cares about these two hedge funds in particular, but they are concerned in general about retail investors having some way to band together to move a (very small) market. If it can happen to one fund it can happen to any random fund on Wall Street and that kind of risk and uncertainty can’t be allowed.

Same mentality when companies that try to fight unions forming, even those forming at their competitors. A few Amazon employees want to form a union? The entire retail industry will suddenly show their support for Amazon. Can’t set the president of allowing the little guy anywhere to get used to being able to band together and take collective action.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#435

Post by totalZero » Thu, Jan 28, 2021, 5:09 PM UTC

beervirus wrote: post #320

paulddraper wrote: post #259

Earlier quoted context omitted.

They're so disconnected that losing billions doesn't matter? The problem is bigger than originally conceived then.

It matters to the investors in the hedge fund. It matters a lot less to the people running it.

Wall Street is driven by money, relationships, and reputation. Obviously, Plotkin lost money here in terms of his this-year payout. But I believe he also takes a hit in other ways.

On Money: Plotkin's fund lost money for his investors, all of whom are rich people who will be upset with him. There will probably be some redemptions, and AUM will go down -- not just because he lost some of it, but because investors will pull out some of what remains.

On Reputation: Plotkin ends up with egg on his face because he held the bag for a bunch of mom-and-pop investors on Robin Hood. You know how Soros is known for famously breaking the Pound Sterling? Plotkin is now known for infamously being broken by GME.

On Relationships: Plotkin lost even after getting an injection of liquidity from Cohen and Griffin. That can't be good for his standing with those two power players.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#436

Post by joss82 » Thu, Jan 28, 2021, 5:11 PM UTC

UncleMeat wrote: post #328

joss82 wrote: post #40

Earlier quoted context omitted.

It's quite simple really: 1. Big hedge fund bet against GameStop stock (shorted up to 140% of the stock, it's called naked short and everybody thought it was illegal since 2008 but that's another story) 2. Lot of small-to-medium investors coordinated over Reddit to take the opposite "bet" en masse (basically buying a lot of GameStop shares) so that the price will go up and "big hedge fund" lose a lot of money. => The…

This isn't a naked short. A naked short is when you short a stock without first borrowing it. It is not the same thing as having shorts past 100% of outstanding shares, since a single share can be lent multiple times.

Thanks for the precision.

Which one is more insane?

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#437

Post by ryandrake » Thu, Jan 28, 2021, 5:11 PM UTC

jaggirs wrote: post #420

dkirill wrote: post #310

Earlier quoted context omitted.

You are right that a big part of retail will be left with enormous losses. But that doesn't in any way excuses brokers who manipulate price letting only SELL orders in

If they only allow sell orders, who is buying what is sold?

The hedge funds who are in trouble and need to exit their short positions?

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#438

Post by snowwrestler » Thu, Jan 28, 2021, 5:12 PM UTC

mikestew wrote: post #408

snowwrestler wrote: post #156

Earlier quoted context omitted.

Right now it looks like retail investors stuck it to Wall Street and made some money because GME is still over $400/share this morning. Everyone holding GME can look at their app and feel great. But not everyone is going to be able to sell it at $400... or even $100 in some cases. It will be interesting to see how everyone feels after the sell off.

GME is still over $400/share this morning Guess what's changed in the 56 minutes since you posted this? GME: $265.00 Though I think it had dipped into around $380 by the time of parent post, and heading down. But someone bought at $430 this morning.

Is this a surprise? Tons of people wanted to buy GME this morning and were mad that Robinhood was preventing them.

We won’t know for days who makes money and who doesn’t. It certainly won’t be everyone.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#439

Post by bluecalm » Thu, Jan 28, 2021, 5:20 PM UTC

boringg wrote: post #377

bluecalm wrote: post #213

Earlier quoted context omitted.

That everything is off is just your assessment which a lot of people disagree with. When it's difficult to do business and make better use of the money then equites are more attractive place to keep your money. This is especially true with a lot of additional money supply and low interest rates. It makes perfect sense to me why we had the run we had during the pandemic. Anything else would be a big surprise.

Right ... that works until you have decide to move your money out of equities. At which point it is a race to the exit. Once the next rotation happens don't get caught being flat footed. And I disagree - I do think everything is off (not just the markets being highly volatile). With many people making record money this year and human suffering being at the highest levels and considerable outrage everywhere, it feels…

I am not attaching a judgement to my assessment. It's just an observation that equites are worth more when money supply increase and new business opportunities are difficult to come by.

If you have a box producing 4k usd per year people may want to pay around 100k for it on normal times but when you can't find any other investments and the government is pumping money into the economy then suddenly the box becomes way more valuable. It's after all better to buy it for 150k even if it produces 3k instead of 4k than to just your money in the bedroom mattress. This same mechanism that causes stocks to rally every time a big player (EU or US) announces another QE round

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#440

Post by ryandrake » Thu, Jan 28, 2021, 5:36 PM UTC

crocodiletears wrote: post #313

fairity wrote: post #212

Earlier quoted context omitted.

> They are blocking buying, and only allowing selling GME, BB and others. How is this not evidence of a corrupted free market system? I can almost guarantee you that this decision was made to protect retail clients -- not as part of some conspiracy against them. It's very clear that retail is going to lose their shirts in the end of all of this, and by blocking new buy orders, the brokerage is effectively protecting…

I sincerely doubt that many retail investors expect to make money on this. I have a couple buddies who made robinhood after seeing this on the news just for the opportunity to make a hedgefund bleed. I was in the same boat, but I already had an account. No matter how paternalistic the intent may have been on Robinhood's end, the message is all the same to us on the outside: the game only has rules when we get to win…

Guarantee as soon as the hedge fund guys are all safely out of their positions and stopped their losses, Robinhood and the other retail brokerages will suddenly be like "Well, we did a great job and protected retail clients! All done with that trade limiting business. Back to normal, everyone."