Statement of SEC Regarding Recent Market Volatility • Hacker News Board

Re: Statement of SEC Regarding Recent Market Volatility

#671

Post by kchr » Fri, Jan 29, 2021, 7:00 PM UTC

scythe wrote: post #456

Robotbeat wrote: post #435

Earlier quoted context omitted.

I don’t agree. See Tesla. Elon frakked up with the SEC but not his customers (or his fans) and so Tesla a couple years later is on top of the world. I doubt Robinhood will survive this. They built their whole brand around rallying for the little guy at the expense of the fat cats. It’s literally their name.

Tesla isn't an investing firm. They don't even really have much in the way of acquisitions yet. Tesla would have to do something pretty blatant to really piss off the SEC. Elon's $420 tweet was greeted with a slap on the wrist precisely because "you're new here, aren't you?". The better analogy would be if SpaceX pissed off the FAA.

Tesla actually made an official statement on their website about going private within 24 hours of the tweet. That's what reduced it to a slap on the wrist.

Re: Statement of SEC Regarding Recent Market Volatility

#672

Post by mjburgess » Fri, Jan 29, 2021, 7:00 PM UTC

stonogo wrote: post #636

mjburgess wrote: post #562

Earlier quoted context omitted.

Indeed. Even then, as a term, it refers to a specific regan-era tax policy. What many on the left assume it means, is a sincere description of growth "raising the tide"; and how ridiculous an idea that is. Of course the tide has risen to an unprecedented degree in human history both since the term "trickle down" was invented; and moreso, over the last 40 years.

Except the tide you're describing is global , and the policy in question was domestic , and wages and assets within the middle and lower economic classes have indeed stagnated in relation to almost every other economic indicator within the country , which is why "many on the left" consider this argument to be invalid.

This just isn't the case. And it dramatically isn't the case.

This is a side effect of using the same category terms, but not talking about the underlying distributions.

Eg., in the UK, 80% of the country were industrial working class or poorer until 1980s; and middle class only started at top 5%.

Today, the "industrial working class" level of wealth, is the bottom 20% at the very most.

So if you hold the class terms fixed, "middle class" it seems the 80s top 5% has "stagnated", only to fail to mention, it now 60% of the country.

If you hold the distributions constant, the wealth level acheived in the top 5% in 1980s is now a majority of the population.

Re: Statement of SEC Regarding Recent Market Volatility

#673

Post by Sohcahtoa82 » Fri, Jan 29, 2021, 7:01 PM UTC

skulk wrote: post #508

snowwrestler wrote: post #471

Earlier quoted context omitted.

The key to managing this FOMO for me is really committing emotionally to the concept of hindsight bias. We remember the winners we missed way more than the losers, because the winners are still present in our lives today, whereas the losers never became noteworthy (because they lost). But it’s extremely difficult to tell them apart ahead of time. So current me needs to give past me a pass... past me failed at somethi…

A mental exercise I do to manage FOMO is to try and remember duds that I pondered might be the next BTC. Admittedly, it's hard because the brain really tries to forget about those. Keeping a diary is probably the key here.

And then you get the ones like Dogecoin that were supposed to be a dud, and it's still around more than 5 years later and just had a massive spike today until RH decided to restrict the use of instant deposits to buy it.

Can't have the poors making money!

Re: Statement of SEC Regarding Recent Market Volatility

#674

Post by fairity » Fri, Jan 29, 2021, 7:01 PM UTC

I don't understand the current lessons being drawn by the public from this situation.

I don't think shorting stocks (even to 140% of its float) is a bad thing. And, the hedge fund managers that shorted GME don't deserve to be bankrupt.

Shorting stocks, in general, is a beneficial action for the market because it helps prevent shares from becoming overvalued.

The problem that GME highlighted is that it's too easy to purposefully trigger a short squeeze.

One possible solution seems to be that the SEC should make it easier to borrow shares to short a stock. And, in so doing, they should make it harder to purposefully trigger a short squeeze.

There's nothing wrong with greed if it doesn't hurt others...The SEC's ultimate goal should be to have a fair and efficiently priced market at all times. In this case, it seems like the party that needs to be protected is the hedge funds....What am I missing?

Re: Statement of SEC Regarding Recent Market Volatility

#675

Post by qznc » Fri, Jan 29, 2021, 7:03 PM UTC

agumonkey wrote: post #255

dleslie wrote: post #116

Earlier quoted context omitted.

The FOMO is palpable. There's a hurried rush of small investors hoping to turn their meagre savings into a big win, backed by the anxiety that if they don't try then they'll forever regret missing their one and only chance at a comfortable life. This sort of event would be less likely if America's wealth disparity weren't so grotesquely skewed.

I wonder what's the optimum sizing of FOMO. 1% ? 0.1 ? 2% ?

The Kelly criterion tells you how big your bet should be.

Re: Statement of SEC Regarding Recent Market Volatility

#676

Post by stjohnswarts » Fri, Jan 29, 2021, 7:04 PM UTC

jancsika wrote: post #121

A Moment in the Life of an HN Genius: 1. Reads a technical document outside their domain. 2. Feels dumb because they don't have a grasp on any of the concepts. 3. Too busy to use the very internet which some of them probably helped build to magically render learning materials to the screen in front of them at zero marginal cost. 4. Sees the word "manipulation" 5. Substitutes the laymen's definition of "manipulation"…

"let's not discuss anything because we aren't experts or even amateurs in _____________. HN discussion is therefore useless and I declare the site be taken down immediately, post haste"

Re: Statement of SEC Regarding Recent Market Volatility

#677

Post by rory » Fri, Jan 29, 2021, 7:05 PM UTC

dkrich wrote: post #150

BoorishBears wrote: post #127

Earlier quoted context omitted.

It boggles the mind people think hedge funds can't profit off a mad rush like this...

I mean do people really believe Robinhood traders are moving billions of dollars of stock a day? Most admit that they aren’t selling and buying at higher and higher levels. That translates to very little cash to buy more. There is absolutely no way that these moves can be attributed to retail traders or short squeezes. The narrative that these are retailers causing every significant move higher and with every move th…

Matt Levine's email today estimates retail investors to be about 30% of total volume (with actual data from Citadel), but retail was net selling on Tuesday, Wednesday, and Thursday. So theoretically retail is enough to move the price if they were truly united, but that isn't actually the case. It's just not sexy to say "I bought in for a couple days and am taking my gains" in a public forum.

Re: Statement of SEC Regarding Recent Market Volatility

#678

Post by fairity » Fri, Jan 29, 2021, 7:05 PM UTC

InvertedRhodium wrote: post #668

fairity wrote: post #656

Earlier quoted context omitted.

Greed is really only a problem when your actions ultimately hurt someone else. In general, shorting stocks is a beneficial action because it helps prevent shares from becoming overvalued. So, yea, the fact that GME had 143% of its shares shorted is a function of greed. But, no, greed in this case was not a problem so long as GME's share price was fairly valued.

Is "fair value" an objective metric in this context?

Yea, it's objective in the sense that it's the net present value of all future cash flow. Many unknowns in that formula, of course.

Re: Statement of SEC Regarding Recent Market Volatility

#679

Post by edbob » Fri, Jan 29, 2021, 7:06 PM UTC

kevstev wrote: post #582

mcguire wrote: post #528

Earlier quoted context omitted.

" how a lot of doctors viewed masks at the beginning of the pandemic " Ok, so I've looked into the history of this a little, and most of the mask mythology seems misunderstood. Prior to 2020, most medical professionals believed most viruses, and corona viruses particularly, could not be transported as aerosols. This was a subject of research where the data had not come in. About late March, it began to appear that th…

Yeah, I think what a lot of people going on TV failed to really express is that there was so much unknown about this new virus, that this is the best information we have to go on RIGHT NOW. And then when that changed, they didn't make it explicit enough that they were changing their advice based on NEW DATA. Partially this is just the soundbite driven media, where even if it was explained, that often doesn't make the…

> My company had a zoom conference with a very well respected British doctor, he won something more or less equivalent to a nobel prize in mediciine, and he told my company, on May 4th, that masks are not necessary. This was already a bit head scratching, but what I feel he probably meant, but certainly did not explicitly say- is that its not a priority for an individual to wear a mask when there are shortages for front line workers.

This comes off as blatantly lying to us for our harm, not "they don't know what they're talking about". If someone lies to you and knowingly puts your life at risk through the lie, it's very rational not to believe anything they say in the future. This is not mere mixed messages.

If government and/or experts want to have non-negative credibility, they are going to have to start consistently telling the whole truth.

Re: Statement of SEC Regarding Recent Market Volatility

#680

Post by mancerayder » Fri, Jan 29, 2021, 7:06 PM UTC

dkrich wrote: post #591

content_sesh wrote: post #484

Earlier quoted context omitted.

Maybe if Robinhood had done literally anything to not appear like they were colluding with their customer Citadel people wouldn't have constructed "false narratives". Its some impressive mental gymnastics to see a broker lock out all of their retail investors (remember, you were completely free to liquidate your position) and offer almost no explanation, and blame the investors for being hasty and jumping to conclusi…

> Its some impressive mental gymnastics to see a broker lock out all of their retail investors (remember, you were completely free to liquidate your position) and offer almost no explanation, and blame the investors for being hasty and jumping to conclusions. People don’t seem to realize that brokerages do this all the time to limit their risk. If you have less than $25k in a trading account for example, a brokerage…

The motivation is one thing, the end result is that it created a slanted playing field where one party was blocked from buying, but not selling, and the other party (the losing short side) could do either unrestricted. Not only that, but it was pre emptive. We can talk all day about GME, but the handful of other names like BB hadn't even reached that point. There was simply a risk of a short squeeze and we slanted the field here, too, enough time for the losing side to mitigate their risk.

Conspiracy or no, the end result is so far from your day trading 25K minimum example. Your example is a rule that already existed going in, rather than a rule that changed temporarily to convenience one side for a day.