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

Redditors are right about the unfairness of the market

bloomberg.com

Post reply on HN
Print view View original

121–130 of 233 posts

Re: Redditors are right about the unfairness of the market

#121

Post by tartoran »

Aunche wrote: post #114
rapsey wrote: post #72

Earlier quoted context omitted.

>How is it a scam? You buy stock. You own a share in a company, or in a company that owns more companies. Because the stock you buy may not have been actually bought by your broker. Which is the entire point of the GME saga which you completely misunderstand. A stock has no business being shorted over 100% in a market that is not a scam. Major firms can get away with crimes like naked shorting and no one can do anyth…

>Because the stock you buy may not have been actually bought by your broker The stock did get bought by your broker. That's why gme's stock skyrocketed and brokers didn't want to trade it. A short interest over 100% doesn't imply naked shorting. If you're borrowing a stock, you can lend it out to someone else. It's like a sublease. There are two leases for a single apartment.

And lots of naked shorts, inexistent shares sold by private market makers such as Citadel were deployed to suppress the price. Also don’t forget about dark pools and other tricks done to suppress the price action that are done shamelessly behind the scenes.

Perhaps cryptos have become so successful over time because this type of manipulation is harder to pull off but that doesn’t make cryptos safer either.

If it wasn’t for the high inflation rate I would not touch the market even with a 10 foot pole.

Re: Redditors are right about the unfairness of the market

#122

Post by xondono »

SkipperCat wrote: post #53
_wldu wrote: post #42

I've been down-voted for years for saying this, but I am right. The stock market is a scam. Just like casinos in Las Vegas. The house wins more often than we do. 'You need to diversify' simply means 'Give us more of your money'. Don't fall for it. It's just rich people and politicians taking money from less rich people. If you want to double your money, fold it over and put it in your pocket (and buy real things that…

Not trying to be a hater, but if you follow most investing advice, you can do really well in the stock market. Don't try to pick stocks, just buy low load index funds (SPY, Russel2000) and hold onto them. Doing that, you can get above 6% yields over the course of a few decades. This has worked really well for so many people. Its boring, there's nothing sexy about it but you will retire with a decent chunk of cheddar.…

> Be a boring investor and find an exciting hobby instead.

This. Too many people think that investing and trading are the same thing, they are almost opposites.

Re: Redditors are right about the unfairness of the market

#123

Post by gruez »

rapsey wrote: post #120
UncleMeat wrote: post #111

Earlier quoted context omitted.

> The entire issue is a fund was allowed to short shares they did not have. Has this ever been demonstrated?

The float was shorted 120%. This is not disputed.

and that's not evidence of naked shorting, because of synthetic longs. see: footnote 3 of this article https://www.bloomberg.com/opinion/articles/2021-01-25/the-ga...

Re: Redditors are right about the unfairness of the market

#124

Post by gruez »

garyfirestorm wrote: post #106
fennecfoxen wrote: post #83

Earlier quoted context omitted.

Not really? I mean if I went to the farmer's market and decided that instead of buying vegetables, I wanted to make a bunch of money buying and selling vegetables, and I ended up losing all my money, I'd be hard-pressed to call the market a scam either, even if some of the farmers do have inside information on the upcoming radish harvest.

I’d say that is fraud.

How's that fraud? did the farmers deceive you?

Re: Redditors are right about the unfairness of the market

#125

Post by chollida1 »

_wldu wrote: post #42

I've been down-voted for years for saying this, but I am right. The stock market is a scam. Just like casinos in Las Vegas. The house wins more often than we do. 'You need to diversify' simply means 'Give us more of your money'. Don't fall for it. It's just rich people and politicians taking money from less rich people. If you want to double your money, fold it over and put it in your pocket (and buy real things that…

> The house wins more often than we do

What house? There is no house. its a market of competing parties, with multiple exchange venues so you can't even say the exchanges are the house.

Hedge funds compete against market makers given that they compete head on, which one would you consider to be the house, they both can't be:)

Re: Redditors are right about the unfairness of the market

#126

Post by Aunche »

Atlas667 wrote: post #80

Jolly, what a surprise... This article is just paying lip service to everyone who already feels this is the case (most sane people) and redditors. Just for gathering some traffic. The real truth is in understanding that this is fundamentally unstoppable within our economic mode of production. No ammount of regulation or de-regulation will prevent a system based on individual profit accumulation from becoming corrupt.…

>The real truth is in understanding that this is fundamentally unstoppable within our economic mode of production.

Your favorite economic mode of production has the exact same potential for corruption and exploitation if not more. Wealth isn't the only form of capital. Societies that tried to forcefully eliminate wealth inequality have always ended up with an economy of exchanging favors behind closed doors. This is what gave rise to Guanxi in China, which is why there is so much corruption there. Even after the markers opened up the social capital obligations remained, so the Guanxi economy is self sustaining.

Re: Redditors are right about the unfairness of the market

#127

Post by jrm4 »

fennecfoxen wrote: post #69
_wldu wrote: post #42

I've been down-voted for years for saying this, but I am right. The stock market is a scam. Just like casinos in Las Vegas. The house wins more often than we do. 'You need to diversify' simply means 'Give us more of your money'. Don't fall for it. It's just rich people and politicians taking money from less rich people. If you want to double your money, fold it over and put it in your pocket (and buy real things that…

How is it a scam? You buy stock. You own a share in a company, or in a company that owns more companies. The company makes money. It pays that out by dividends or share buybacks. You sell it decades later, hopefully for a profit. That's the deal. That's what's for sale. You want to blame HFTs or whatever? Bah. Worst case you're losing a fraction of a percent of your initial purchase. You've got absolutely nothing on…

The measure of "is it a scam" is simple - How well does reality match up with your description, with regard to the people buying and selling things? Just watch the question of: when the little guy buys something (e.g. a stock or some other security) is the story that is told around "what it is" reasonably close to the truth?

Pro-tip, if you're framing this as a hard binary, you're probably either the scammer or the sucker.

Re: Redditors are right about the unfairness of the market

#128

Post by jjj123 »

cudgy wrote: post #92
throwaway9870 wrote: post #41

Earlier quoted context omitted.

> Teachers, social workers, public defenders, armed service people. I don't agree with that in all cases. I have a friend who is a teacher and admits teaching is a great job for him (2nd grade) and he doesn't know what he would do otherwise. Probably some type of physical work. He is a great guy, but just isn't that sharp. He is punctual and dependable, but not real good at thinking on his feet. He makes about $82k t…

“He is punctual and dependable, but not real good at thinking on his feet.” Doesn’t this describe most people that do well in large organizations?

Yep. I can think of a few people that meet this description (myself included?) that worked at a ycombinator-backed unicorn startup making wayyy more than 85k.

Re: Redditors are right about the unfairness of the market

#129

Post by chollida1 »

rapsey wrote: post #72
fennecfoxen wrote: post #69

Earlier quoted context omitted.

How is it a scam? You buy stock. You own a share in a company, or in a company that owns more companies. The company makes money. It pays that out by dividends or share buybacks. You sell it decades later, hopefully for a profit. That's the deal. That's what's for sale. You want to blame HFTs or whatever? Bah. Worst case you're losing a fraction of a percent of your initial purchase. You've got absolutely nothing on…

>How is it a scam? You buy stock. You own a share in a company, or in a company that owns more companies. Because the stock you buy may not have been actually bought by your broker. Which is the entire point of the GME saga which you completely misunderstand. A stock has no business being shorted over 100% in a market that is not a scam. Major firms can get away with crimes like naked shorting and no one can do anyth…

> A stock has no business being shorted over 100% in a market that is not a scam.

This also implies that those pesky, cheating buyer were long over 200% of hte stock.

A stock has no business being bought over 200% in a market that is not a scam.

Why is no one looking at that pesky wall street bets crowd for market manipulation:)

Re: Redditors are right about the unfairness of the market

#130

Post by gruez »

tartoran wrote: post #121
Aunche wrote: post #114

Earlier quoted context omitted.

>Because the stock you buy may not have been actually bought by your broker The stock did get bought by your broker. That's why gme's stock skyrocketed and brokers didn't want to trade it. A short interest over 100% doesn't imply naked shorting. If you're borrowing a stock, you can lend it out to someone else. It's like a sublease. There are two leases for a single apartment.

And lots of naked shorts, inexistent shares sold by private market makers such as Citadel were deployed to suppress the price. Also don’t forget about dark pools and other tricks done to suppress the price action that are done shamelessly behind the scenes. Perhaps cryptos have become so successful over time because this type of manipulation is harder to pull off but that doesn’t make cryptos safer either. If it wasn…

>Also don’t forget about dark pools and other tricks done to suppress the price action that are done shamelessly behind the scenes.

can you elaborate on this? What tactics were used, and how did they "suppress the price action"? Moreover, how do they compare with "let's screw over hedge funds by driving up the price of a stock!"? AFAIK buying up stocks in a shorted company isn't illegal, but intentionally doing so to cause a short squeeze is, eg.

>In 2012, the U.S. Securities and Exchange Commission charged Philip Falcone with market manipulation in relation to a short squeeze on a series of high-yield bonds issued by MAAX Holdings. After hearing that a firm was shorting the bonds, Falcone purchased the entire issue of bonds. He also lent the bonds to the short-sellers, and then bought them back when the traders sold them. As a result, his total exposure exceeded the entire issue of the MAAX bonds. Falcone then stopped lending the bonds, so that short-sellers could not liquidate their positions anymore. The price of the bonds rose dramatically.[16][17] The short-sellers could only liquidate their positions by contacting Falcone directly.[17]

Post reply on HN