Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

cnet.com

Post reply on HN
Print view View original

261–270 of 281 posts

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

#261

Post by davidivadavid »

cobookman wrote: post #229
zoomablemind wrote: post #223

Earlier quoted context omitted.

I'd wonder, if given the market dynamics, the whole sharade will unwind into even lower price of the underlying stock than at what it was before the "activity". I can't see how this could help GME or other stocks picked for this ride. I totally get the emotional value of these stocks and the hit they took due to the pandemic. This just feels that they are used as pawns and somehow this recent emotional tension is bei…

GME could issue shares and get a large cash infusion into its business. GME could sell some of its shares to get a large cash infusion into its business. Their market cap 19x'd up to ~19B. Having a 1B cash infusion into the business isn't crazy. Imagine what 1B of investment into Gamestop could achieve.

That assumes people will buy said shares. That's contentious at best.

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

#262

Post by gher-shyu3i »

scatters wrote: post #260
gher-shyu3i wrote: post #257

Earlier quoted context omitted.

It doesn't change the fact that the modern financial and economic system are morally bankrupt. We don't learn from our mistakes, and it becomes normal to have these cycles of collapse then build back. These cycles are caused by interest/usury being at the core that drives the system (why did the government move away from the gold standard? because they want to be able to print their way out of their usurious debts, i…

We do learn from our mistakes, which allows us to make new mistakes. We learned how to free our currencies from their chains of gold and allowed the money supply to respond to the demands of the economy. We learned how inflation is a monetary phenomenon and tamed it with interest rates. We learned how the business cycle propagates itself and introduced countercyclical policies to damp it down. We found that the Great…

> We learned how inflation is a monetary phenomenon and tamed it with interest rates

Fix one mistake with another mistake? Plus, it's the other way around, interest rates cause more inflation (how else is the government going to pay its debts?). It's a cyclic phenomenon. Without interest, inflation would be a much less problem.

Secondly, freeing currencies from gold is another mistake because it allows the government to devalue its currency at will, we've see the chaos that comes out of it. Hopefully bitcoin and gang will fix that mistake, but we're already seeing the big banks not liking it because it will take away their power to control the people.

> We found that the Great Moderation promoted speculation in real estate, causing the GFC,

Which would have never happened if we were following proper economic laws which we've literally known about for over 1400 years. Mortages and selling debt for debt are both prohibited Islamically. We already know it's wrong, yet people keep engaging it it because a few rich and powerful will benefit at the expense of everyone else.

The solution is to go back to a sound economic system, not to anticipate the next crash because it's built in to how the modern system works.

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

#263

Post by whiddershins »

npteljes wrote: post #239
einarfd wrote: post #233

Earlier quoted context omitted.

My understanding is that it isn't the loan that is banned but charging interest. A fairly simple workaround would then be to charge a monthly fee instead, and you would then end up with something that in practice is more or less the same.

This is my takeaway with religious practice. If something is desired, but banned, people will find something that is practically similar enough, and technically allowed by the religion.

In practice, religions tend to have institutions that parse and interpret the text, and make a clear, unambiguous interpretation for a given situation.

So people might tell themselves they are doing a workaround, but it is not really valid from the point of view of the organized religious body.

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

#264

Post by moate »

ogre_codes wrote: post #208
moate wrote: post #173

Earlier quoted context omitted.

This is all "speculation". You're not basing the stock price on earnings but intangibles. You believe there is a disconnect between the long term value of Tesla and it's current price based on your perception of market factors. Every single point you made could change in 6 months for reasons and negatively affect Tesla. Ford could come out with a contract to install electric charging stations throughout the US. Feder…

> This is all "speculation". You're not basing the stock price on earnings but intangibles. Yes, it's absolutely (informed) speculation. This is how the stock market works. Amazon, Apple, Microsoft before them, Google... people said exactly what you are saying about how they were valued at some point in time. Every single stock is valued based on how stocks will perform in the future . Last year's performance is only…

I'm aware of what gambling is, and all the forms it can take from rolling dice in an alley to investing in the stock market.

Your first post was trying to differentiate GameStop from Tesla. Neither have assets that support their price or that there is something inherent in the company to support that value. They don't. They have projections(Tesla) or excitement(GS).

Throwing up a bunch of survivor-biased stocks to prove that sometimes people make winning bets (or rather, that some best win) doesn't mean anything. Amazon, Apple, MS all eventually moved past speculative and most people in the market would assume that they're pretty stable blue chips (in fact, that's why we have terms like "blue chip" in the first place) with assists that support the price.

I'm not talking about how to make big money on stocks, I'm talking about the idea of inherent vs projected value. You said you think Tesla is risky, and that's my point. It seems much more likely that someone (car companies, energy cos, the government) would come in and kick the legs out from under Tesla than any FAANG company at this point (except maybe FB but I might just be projecting there)

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

#265

Post by kleer001 »

gher-shyu3i wrote: post #254
kleer001 wrote: post #227

Earlier quoted context omitted.

I really love the way they do home buying. Basically no-interest, but also no opportunity for mortages. The bank owns the house until you've completely paid it off. I looked a little but couldn't find a longer article explaining it in more detail, but it should be easy enough to search out for interested parties.

To be fair, those transactions are also usurious, because they increase the price of the asset in exchange for postponing payments. There are several Hadiths (narrations) that prohibit that transaction.

Nice. I guess I only love it in theory.

Humans gunna human.

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

#266

Post by fzil »

whiddershins wrote: post #207
gher-shyu3i wrote: post #186

Earlier quoted context omitted.

Events like these make it clear why the vast majority of Wall Street practices are banned in Islam (including shorting). It's a terrible predatory practice that is not just gambling, but also creating artificial risk that does not correspond to the value being created from such transactions. This can easily collapse the entire market as we already saw in 2008 and many times before. The sooner we prohibit these terrib…

I am under the impression that Islam technically bans loans. So one would have to do an investment instead of a loan with interest. Do you know if I have this right?

So I grew up in a traditional muslim household, here's my understanding of things as they've been taught to me.

generally there are 2 types of loans,

1. Kharz Hasan (Loan of goodwill) given out to people/institutions without any collateral, sometimes even without a term limit. Its up to lender to decide if they want their money back or forgive the loan which then turns this loan into a "Sadqah" (charity).

2. Loan with a collateral: this is the standard loan where the two parties agree on a collateral and lend money based on that.

Neither of these above loans involve any kind of interest.

(My) Islamic Understanding of Mortgages: The risk profile is different compared to normal. Normally what happens is that institutions loan the amount of money and you buy the property and pay interest on the money. In the Muslim Model, the institutions BUY the property and you pay money. The money you pay goes partly towards buying the property and the partly towards paying "fees" to use the property that you don't completely own.

You can see why people would say things like, "oh, they are skirting the rules by changing the name from interest to fees". However, a "proper" implementation would put more burden on the banks in case of a crash.

Hope that clears up few things.

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

#267

Post by scatters »

gher-shyu3i wrote: post #262
scatters wrote: post #260

Earlier quoted context omitted.

We do learn from our mistakes, which allows us to make new mistakes. We learned how to free our currencies from their chains of gold and allowed the money supply to respond to the demands of the economy. We learned how inflation is a monetary phenomenon and tamed it with interest rates. We learned how the business cycle propagates itself and introduced countercyclical policies to damp it down. We found that the Great…

> We learned how inflation is a monetary phenomenon and tamed it with interest rates Fix one mistake with another mistake? Plus, it's the other way around, interest rates cause more inflation (how else is the government going to pay its debts?). It's a cyclic phenomenon. Without interest, inflation would be a much less problem. Secondly, freeing currencies from gold is another mistake because it allows the government…

Oh, dear. Money isn't created by governments; it's created by banks (and, given demand, shadow banks). Raising interest rates reduces the stock of viable projects thereby reducing lending and money creation, which halts inflation. This is trivial stuff.

The laws of millennia ago were appropriate for their time but would be hilariously ill matched to today's world. Look at Turkey to see where that takes you.

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

#268

Post by ogre_codes »

moate wrote: post #264
ogre_codes wrote: post #208

Earlier quoted context omitted.

> This is all "speculation". You're not basing the stock price on earnings but intangibles. Yes, it's absolutely (informed) speculation. This is how the stock market works. Amazon, Apple, Microsoft before them, Google... people said exactly what you are saying about how they were valued at some point in time. Every single stock is valued based on how stocks will perform in the future . Last year's performance is only…

I'm aware of what gambling is, and all the forms it can take from rolling dice in an alley to investing in the stock market. Your first post was trying to differentiate GameStop from Tesla. Neither have assets that support their price or that there is something inherent in the company to support that value. They don't. They have projections(Tesla) or excitement(GS). Throwing up a bunch of survivor-biased stocks to pr…

You are missing the entire point here.

Stocks are not valued based on what they earned last year. They are valued based on whether people think owning them will earn them a profit in the future.

You can certainly wait until a company has proven itself to invest in them. The problem with that is you will never get more than marginal returns. If you waited until Amazon was fairly valued, you'd probably still be sitting on the sidelines. Likewise with Apple.

If you want guaranteed returns, you buy boring things like utility stocks and accept your 4% dividend and 5-10% growth. If you want bigger returns, you absolutely have to invest in things which some people consider over-valued. There is no other way. You just have to be good at picking which companies are going to be successful.

Tesla, the jury is still out. I'm playing with the house's money at this point though. I am confident they aren't going to crash and burn entirely though.

Comparing them to Gamestop doesn't make sense. Outside Reddit, there is no story with Gamestop. Tesla has products and growth, it's just a matter of finding where that growth ends.

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

#269

Post by cordite »

FabHK wrote: post #189
cordite wrote: post #15

Earlier quoted context omitted.

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

Ok, so, there's a concert by in 4 weeks. Tickets are sold at 100$. But the show is extremely popular, so the tickets are traded, and the price shoots up to 300$. You think the price is still going to go higher, so you buy a ticket for 300$. The price goes up to 400$, you sell the ticket, and you made 100$. (You were long, and the price went up - you made money.) Now, the price goes to 5000$. You think, well, that's w…

Thank you for this example, this really improved my understanding

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

#270

Post by cordite »

FabHK wrote: post #240
FabHK wrote: post #189

Earlier quoted context omitted.

Ok, so, there's a concert by in 4 weeks. Tickets are sold at 100$. But the show is extremely popular, so the tickets are traded, and the price shoots up to 300$. You think the price is still going to go higher, so you buy a ticket for 300$. The price goes up to 400$, you sell the ticket, and you made 100$. (You were long, and the price went up - you made money.) Now, the price goes to 5000$. You think, well, that's w…

I don't know whether this might be too long or boring, but I've extended the tale further a bit: Now, price is back at $5000. You want to go short, but big time this time around. You're going to Mike and borrow the ticket, and to Steve and borrow his ticket, and all your 8 friends (MSetc), and borrow their tickets and sell them to Anna, Betsy, Charlotte, etc (ABC). Now you're short 8 tickets, you'll have to buy back…

I followed the analogy, this is incredibly detailed and makes a lot of sense. Thank you for the detail in this comment!
Post reply on HN