AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains • Hacker News Board

Re: AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains

#151

Post by clairity » Wed, Feb 03, 2021, 6:55 PM UTC

tmpz22 wrote: post #135

clairity wrote: post #125

Earlier quoted context omitted.

wait til you really think about the covid bubble for more than 2 minutes. at a population level, you'll see a broad range of misperceptions everywhere. you'll see people missing the forest for the trees (private gatherings vs masks), focusing on trivialities (restaurants, fomites, masks again) and simply ignoring how much low-level emotion (fear, impotence) and instinct (othering strangers) drive our beliefs (have to…

Public health is a drastically different battlefield then public equity. It’s closer to seatbelt laws and geopolitics then it is to day trading. Of course there are going to be different arguments, different misinformation, etc. But you don’t hyper rationalize a public health crisis with arguments like: “I personally am low risk so...” “Actually I don’t need to wear a mask when I do this in public because...” “My pol…

> "You don’t hyper rationalize a public health crisis like you would a line of python code."

when lives are at stake is exactly when we should 'hyper-rationalize' (which doesn't mean don't consider emotion at all). we don't build bridges, go into war, or write aircraft control software thinking we'll wing it.

Re: AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains

#152

Post by UncleMeat » Wed, Feb 03, 2021, 6:55 PM UTC

NoOneNew wrote: post #8

PragmaticPulp wrote: post #2

I expect a lot of Redditors will be very disappointed when they realize just how much money hedge funds made, on average, out of this episode. The WSB moderators really did everyone a disservice by letting obvious misinformation flood the subreddit. It’s hard to view the later stages of the GameStop phenomenon as anything other than a Reddit-fueled pump and dump scheme.

Not at all. The past few days they've shared not only the largest long holders of these stocks, but also the pension funds that were boosted as well. A few teacher pension funds got a good uptick and they were sharing that around. The cats at wsb might be self proclaimed retards, but they're not that stupid. They know lots of other folks are going to make money off of them. You know, if you actually visit the sub, yo…

> The cats at wsb might be self proclaimed retards, but they're not that stupid.

The sub count increased 8-fold. Any prior culture it had has been overwhelmed.

Re: AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains

#153

Post by WA » Wed, Feb 03, 2021, 6:56 PM UTC

GordonS wrote: post #120

WA wrote: post #101

Earlier quoted context omitted.

Not as simple. With buy and hold of index funds, you limit your upside. There is close to zero chance to make 1,000% within a year. Stock picking has potentially a bigger downside, but also more upside. This being a zero-sum game doesn’t matter, if you have either an edge or are simply lucky. So instead of saying it’s all bullshit, it probably makes more sense to put 90% in index funds but expose yourself to a bigger…

I think that's kind of the GP's point - they are advocating for not being lured by the (scant) potential for enormous gains, and instead taking the easy route to moderate gains (which will amount to large gains over time, as long as you reinvest). > it probably makes more sense to put 90% in index funds but expose yourself to a bigger upside with stock picking. Does it though? Unless you are an experienced profession…

If you think that your chances are higher at roulette, good for you. Other people take other chances.

A few more thoughts:

- Maybe you don’t have to be THAT smart to beat the index.

- Maybe you don’t have to be consistently good or right or lucky, but only once or twice, because money has a nonlinear utility. If you strike it big in your early thirties, you have a different life than if you consistently save up till 65.

- Of course, gambling away your small investment in the beginning might give you less to compound over the years, which results in significant less money at age 65.

- Maybe stock picking helps you better to stay invested during booms and busts.

I have no answers to these questions and I’m in the process to figure things out for myself right now. However, buying puts on DAX and SPX in February 2020 made me a small fortune, which is now a very real house I just bought.

YMMV

Re: AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains

#154

Post by JohnJamesRambo » Wed, Feb 03, 2021, 6:57 PM UTC

SpicyLemonZest wrote: post #96

marcinzm wrote: post #9

Earlier quoted context omitted.

>did everyone a disservice I suspect they didn't do a disservice to their own bank accounts. Random internet strangers care as much about you as do politicians and hedge fund owners.

I suspect they did. I had multiple friends buy GME and all of them are now in the red on that investment.

This is my experience as well. Many put their whole stimulus in it, and I can’t escape the idea that Wall Street knew all this would happen and they just found a way to get a large chunk of that other stimulus money that went to the people and not to corporations. An artificial movement that they may have created themselves that had an ethos of “bankrupting Wall Street”. Lol. A taxpayer funded pump and dump of epic proportions enabled by new tech sockpuppeting abilities and control. Before Cambridge Analytica I would say take your tinfoil hat off, but now I don’t know anymore. I consider nothing real online and go from there.

Re: AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains

#155

Post by quxpar » Wed, Feb 03, 2021, 6:57 PM UTC

sokoloff wrote: post #129

dcolkitt wrote: post #92

Earlier quoted context omitted.

The difference is the HN hype train might cause you some headaches from picking an immature tech stack. Whereas the WSB echo chamber has literally ruined thousands of people's lives and retirements.

If someone is going to ruin their life or retirement based proximately to posts in a Reddit forum, it’s very hard for me to assign root cause to the Reddit forum. At most that’s the first or second “Why?” but there is surely a deeper issue.

Many people were prudent blue-chip investors whose retirement was ruined by the housing crisis. There doesn't seem to be any 'smart money', just 'big money'.

Re: AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains

#156

Post by majormajor » Wed, Feb 03, 2021, 6:57 PM UTC

NicoJuicy wrote: post #140

dougmwne wrote: post #85

Watching HN get caught up in this Gamestop bubble over the past week has been eye-opening to me about the community. The kind of information being spread around WSB was fully ridiculous. Wild conspiracy theories, financial advice with no basis in reality, astroturfing, and mob behavior. There has been an incredible amount of bleed-over between the garbage I've seen posted on WSB and the things posted in these HN thre…

Not sure what I'm missing here I'm currently awaiting 9 February for the shorts interest to be released, to see if they are right or wrong. I think it's really interesting what's happening/happened. I'm not sure if I see a fallacy, that if you can hold a squeeze that another squeeze could happen if enough shorts stay open. Anyone can elaborate on that? Taking into account that shorting costs money ( 30% interest at a…

Before it was February 9 it was last Friday... ;)

> Taking into account that shorting costs money, people can hold longer than shorts. And buying them would make the available pool to buy back much smaller.

The volume being traded has been incredibly high, the available pool to buy hasn't been small. More than the total number of outstanding shares has traded per day over the last 10 days. https://finance.yahoo.com/quote/GME/key-statistics

The short interest likely isn't constant, either. Some people probably got out and took a bath on old positions, and others got in with new ones when it was super high. Anyone who started shorting at 300 or 400 is feeling pretty good.

Re: AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains

#157

Post by franl » Wed, Feb 03, 2021, 6:57 PM UTC

nprz wrote: post #97

ehsankia wrote: post #48

Earlier quoted context omitted.

There are plenty of "Average people" that entered near the top, and since not everyone can sell simultaneously, that means a ton of people are losing the life savings they dumped into this out of excitement as it crashed back down. I think the point being made here is that the whole narrative of "average people beating wall street" is pretty naive and quite bullshit. All in on, maybe a few handful of people got 10x o…

> that means a ton of people are losing the life savings they dumped into this out of excitement as it crashed back down Can you provide a single case of someone losing their entire life savings by YOLOing it on GME at the top?

Assuming this person is legit (which is a huge assumption given it’s a stranger on Twitter), they appear to have sunk 90% of their worth into AMC: https://twitter.com/23michaeljam/status/1356785696959209472?...

Re: AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains

#158

Post by tumbleweeds » Wed, Feb 03, 2021, 6:57 PM UTC

afavour wrote: post #128

nprz wrote: post #97

Earlier quoted context omitted.

> that means a ton of people are losing the life savings they dumped into this out of excitement as it crashed back down Can you provide a single case of someone losing their entire life savings by YOLOing it on GME at the top?

I suspect the stories will emerge once the GME price truly tanks. No, I don't think it'll be millions of people, but reading the level of delusion in that sub I don't think it's going to be tens of people either.

It doesn't even have to be big sums. Just someone who only had say $2,000 trying to make a quick play at the peak but ended up with less than $2,000 after all is settled. That'll turn some away from stocks for a good while.

Re: AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains

#159

Post by dcolkitt » Wed, Feb 03, 2021, 6:57 PM UTC

JumpCrisscross wrote: post #133

dcolkitt wrote: post #66

Earlier quoted context omitted.

There's a simple lesson. Buy and hold a low-fee index fund. Stop trying to pick stocks. And for God's sake stop trying to day trade stocks. Deviating from buy-and-hold indexing is mathematically a zero-sum game. Winning this game is also one of the most monetarily rewarding games on Earth. It's extremely unlikely that you're anywhere near good enough to win this game. If you don't know who the fool at the table is, i…

> There's a simple lesson. Buy and hold a low-fee index fund. Stop trying to pick stocks. And for God's sake stop trying to day trade stocks. It's a tough lesson to learn. When I realized, I think last Wednesday evening, that intelligent people honestly believed Ken Griffin was ordering Robinhood to block traders from buying GameStop stock so a short of his could make money, I started pricing out puts. (Didn't do any…

> There is ample evidence that individual investors can and do generate abnormal returns.

I actually agree with this. But didn't want to put it in, because so many people hear this qualification and just assume it means they can be the next /u/deepfuckingvalue.

To put it in the larger framework, I would say individuals can win in opportunities that are too awkward for institutions. Like patiently holding beaten down value stocks. But there's two caveats. One, is that most times this style of investing is painful, with long periods of underperformance. Two is that the outperformance is reasonably capped. Maybe an extra two or three percent a year. It's not going to catapult you to /u/deepfuckingvalue levels. For large enough opportunities, the institutions will swallow the awkwardness. That only leaves small rewards for a lot of pain.

Thanks. I do appreciate you bringing this point up.

Re: AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains

#160

Post by cashewchoo » Wed, Feb 03, 2021, 6:58 PM UTC

z9e wrote: post #115

cashewchoo wrote: post #86

Earlier quoted context omitted.

So much this. /r/wallstreetbets is going to struggle to recover. It's absolutely Eternal September. I've been subbed to WSB for about 5 years, ever since someone at work (prop trading) mentioned it as basically being a bunch of 25-30 yo finance people hanging out and doing dumb shit in their personal accounts for fun. I'll admit, I did some dumb stuff myself, trying to time UVXY/TVIX plays. (Basically netted 0 of cou…

I struggle to see the political claim that these people are being flooded with Trumpers. This event was and has been pretty bipartisan. From what I’ve seen thus far is the media trying to use the Q / Trumper angle against this community to tarnish its public perception and recent novelty. I am happy to be proven wrong though, I just don’t see it.

I'm necessarily saying it's "Trumpers", just that lots of the rhetoric, especially stuff that gets to the front page of r/all, seems to be the kind of all-caps, hyper-reductionist, chest-beating "SO MUCH WINNING" kind of rhetoric we saw in 2016. I do think this is bipartisan, in that there's no one side of the political spectrum that's flooding in here, but I think we're seeing the kind of hype devices that were used to (apparently) great effect in 2016.