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High Short Interest Stocks

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Re: High Short Interest Stocks

#261

Post by soVeryTired »

PartiallyTyped wrote: post #252
soVeryTired wrote: post #224

Earlier quoted context omitted.

Those analysts are incredibly specialised. The rank and file developer ‘at the bleeding edge’ spends their day buried deep in a single codebase. The analyst spends their day carefully picking through industry trends. You say short sellers are using fundamentals as an ‘excuse’ to short stocks ‘they don’t like’. If not from careful analysis of the business, where should the opinions come from?

How about potential and understanding of underlying tech? Nvidia was an obvious play in 2013 with the precursor of AlexNet, AMD was an obvious play when Jim Keller was done.

I don't think Nvidia was a particularly obvious play at the time. GPU bitcoin mining had taken off and GPUs were in high demand, but I don't think many people realised GPU compute would take off the way it did: everyone I knew in ML was still using clusters and most of them were using Matlab.

Even if you took it for granted that GPU-powered deep learning was the next big thing, it wasn't obvious that NVIDIA would be the dominant player. CUDA made GPGPU programming easy at the time, but any other manufacturer could have released something better. It just didn't play out that way.

Alexnet was 2012 by the way. Shortly after Nvidia stock tanked!

Re: High Short Interest Stocks

#262

Post by bpodgursky »

fock wrote: post #192
bpodgursky wrote: post #36

Earlier quoted context omitted.

Yeah, WSB hates bankers, has nothing against founder-owners.

that's what puzzles me. All these founder-owners basically took (literal) truckloads of fresh money printed for "keeping the economy running" and swapped it for shares in their extremely overvalued companies. Doesn't sound a lot better than bankers and crucially doesn't work without bankers?

I actually don't even know what you're referring to, but I'm quite confident that it's untrue that "all" founder-owners did it, or that it's anywhere near as nefarious as you're positing.

Re: High Short Interest Stocks

#264

Post by pjc50 »

germinalphrase wrote: post #240
pjc50 wrote: post #211

Earlier quoted context omitted.

This is very much reminding me of 2008. If you keep blowing up financial institutions, eventually you're going to hit a Lehman and the counterparty risk spreads to the rest of the system.

The zeitgeist seems to be “screw ‘em; they’re jackals”.

Yes, I'm aware of that. Do we actually want to rerun 2008 again, though? Are people expecting it to have a different, better outcome and not a different, worse outcome or just the bailout again?

The hedge funds aren't structurally important. Brokerages start to be. Retail banks definitely are.

Re: High Short Interest Stocks

#265

Post by cbozeman »

davewritescode wrote: post #241
cbozeman wrote: post #162

Earlier quoted context omitted.

This was one scenario were the shorts really did have it wrong. GameStop's financials were and are pretty solid. There was no reason to short the stock so heavily, which is why they're in the trouble that they're in right now. You should watch Roaring Kitty's video from June 2019 I believe (maybe its 2020?) on YouTube about this. He goes into great detail, with something like an hour of analysis on why $GME is a reas…

Someone explained to me (perhaps incorrectly) that GMEs market cap was less than the value of it's real-estate holdings. Now GameStop isn't a great company but it's not bleeding as badly as you would expect and it has a turnaround plan that's it's executing. It never should've been shorted as much as it was without hedging the other side of the bet. What was Melvin going to do if GameStop found a way to be wildly pro…

Right. GME market cap was $250 million at a time when the company had literally $1 billion in assets.

For people wondering, "Well why didn't some behemoth like Sequoia Capital or BlackRock just swoop in and load up?" When purchasing such large blocks of a company, 5%, 10%, 15%, etc., there's a lot of paperwork involved.

Retail investors don't have to file with the SEC when they YOLO $200,000 on GameStop at $4 a share. They can shrug and say, "We like the stock."

Re: High Short Interest Stocks

#266

Post by cbozeman »

ballenf wrote: post #244
cbozeman wrote: post #162

Earlier quoted context omitted.

This was one scenario were the shorts really did have it wrong. GameStop's financials were and are pretty solid. There was no reason to short the stock so heavily, which is why they're in the trouble that they're in right now. You should watch Roaring Kitty's video from June 2019 I believe (maybe its 2020?) on YouTube about this. He goes into great detail, with something like an hour of analysis on why $GME is a reas…

> GameStop's financials were and are pretty solid. But aren't stock prices almost entirely about future performance? So will GME's business model work tomorrow? I think the answer is yes. They're the best option for buying used peripherals that I've found. I can get it right away, can exchange easily if a problem and can see the item before I buy (or at least when I pickup). I've just wasted too much time trying to s…

> But aren't stock prices almost entirely about future performance?

This depends on what kind of investor you are. Do you believe the market is entirely rational and depends on the underlying fundamentals of a company? Or do you believe that the stock market is ultimately irrational and trades solely on hope and fear?

Frankly, I don't see how anyone can disagree that the market is entirely irrational and solely emotionally based, and the reason is because humans are irrational and emotionally based. We rationalize our positions after we've taken them, not before, I'm totally convinced of this, mostly thanks to Sam Harris, and to a lesser degree, Richard Dawkins.

We want to believe that we logically poured over the facts and figures and we arrived at the only inescapable conclusion possible. Were that true, everyone would arrive at similar conclusions. Despite what some people have said the past several years, there are no such thing as "alternative facts". A thing is either true, false, or unknown.

Smarter people than I have made cases on both sides of this argument, but for me, I see it happen every day, all the time, all around me. I watch it happen in finance. I watch it happen in book publishing. I watch it happen in development. I, for one, am a believe in what I call the "emotional market hypothesis". Hell, Tesla is a perfect example. There's absolutely no reason for a stock to be trading at 1660 times its earnings, but Tesla is. That's its Price-To-Earnings ratio right now. The stock is fueled by hope. Elon is the personification of that hope, for better or worse.

Re: High Short Interest Stocks

#267

Post by PartiallyTyped »

soVeryTired wrote: post #261
PartiallyTyped wrote: post #252

Earlier quoted context omitted.

How about potential and understanding of underlying tech? Nvidia was an obvious play in 2013 with the precursor of AlexNet, AMD was an obvious play when Jim Keller was done.

I don't think Nvidia was a particularly obvious play at the time. GPU bitcoin mining had taken off and GPUs were in high demand, but I don't think many people realised GPU compute would take off the way it did: everyone I knew in ML was still using clusters and most of them were using Matlab. Even if you took it for granted that GPU-powered deep learning was the next big thing, it wasn't obvious that NVIDIA would be…

Was thinking 11 with Schmidhuber's student.

Re: High Short Interest Stocks

#268

Post by germinalphrase »

pjc50 wrote: post #264
germinalphrase wrote: post #240

Earlier quoted context omitted.

The zeitgeist seems to be “screw ‘em; they’re jackals”.

Yes, I'm aware of that. Do we actually want to rerun 2008 again, though? Are people expecting it to have a different, better outcome and not a different, worse outcome or just the bailout again? The hedge funds aren't structurally important. Brokerages start to be. Retail banks definitely are.

They probably don’t understand. If they do understand, they don’t seem to care.

There are a lot of people under the age of forty who don’t feel like they are benefiting from our current system. When the Boomers hit age 35, they owned approx. 21 percent of the nation’s wealth. Gen X plummeted down to 9 percent. Millennials are on track to own about 3-4 percent. This is according to the Fed.

They make less, own less, don’t see themselves or their interests represented at the highest levels of our government, and are fed up.

So, yes, the young would suffer more than the wealthy, the elderly, and the connected in an economic collapse, but they don’t seem to care.

Re: High Short Interest Stocks

#269

Post by TLightful »

cbozeman wrote: post #162
thrwn_frthr_awy wrote: post #135

Earlier quoted context omitted.

It turns out an online community can stay irrational longer than a hedge can solvent.

This was one scenario were the shorts really did have it wrong. GameStop's financials were and are pretty solid. There was no reason to short the stock so heavily, which is why they're in the trouble that they're in right now. You should watch Roaring Kitty's video from June 2019 I believe (maybe its 2020?) on YouTube about this. He goes into great detail, with something like an hour of analysis on why $GME is a reas…

Tend to agree with this. People seem to be pushing this as the moment the little people took control.

This is a flash in the pan.

And don't get me wrong, I almost always support the underdog.

Re: High Short Interest Stocks

#270

Post by ENGNR »

pjc50 wrote: post #264
germinalphrase wrote: post #240

Earlier quoted context omitted.

The zeitgeist seems to be “screw ‘em; they’re jackals”.

Yes, I'm aware of that. Do we actually want to rerun 2008 again, though? Are people expecting it to have a different, better outcome and not a different, worse outcome or just the bailout again? The hedge funds aren't structurally important. Brokerages start to be. Retail banks definitely are.

If there is a systematic risk.. surely better to catch it earlier than let it keep inflating
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