Earlier quoted context omitted.
That only captured the first 4 paragraphs.
I thought there only was 4. I guess I got paywalled.
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u/DeepFuckingValue and the GameStop Reddit mania
351–360 of 554 posts
Re: u/DeepFuckingValue and the GameStop Reddit mania
#352Earlier quoted context omitted.
As a derivative trader and some one who is constantly looking for mispriced assets from the upside (ie short), my number one concern when we have market turmoils is always broker liquidity. This is also why hedge funds have prime accounts directly with bulge brackets. My recommendation is to always have at least two accounts plus Fidelity. FIDO, while expensive, invested a ton of money into their platform/technology.…
Which are good brokers for the primary two accounts?
To be completely honest, you can’t beat RH and zero commish on options. But I only use it for trades that I can execute over the course of a day. Schwab/TOS is probably going to be the best discount broker when they complete the integration. I don’t like IKBR because it’s not that much better than others unless you are a quant. Pick the products you think you want to trade first then pick the brokers. For example, you don’t want to trade on a platform that doesn’t offer futures because you are more than likely to need it later down the road (this is also why some prefer IKBR due to their breadth in products). And make sure you try their mobile apps since most of them are horrible!
Re: u/DeepFuckingValue and the GameStop Reddit mania
#353I know this forum is capitalist to the core, but there is a lack of appreciation for this moment and an undue air of cynicism. This whole situation breaks a ton of fundamental assumptions about how markets work and will change hedging strategies for a lot of investors moving forward. Yes, we know there are hedge funds on both sides of this equation (Blackrock owns 12% of Gamestop, Burry made a ton and smartly got out…
There is no undue air of cynicism. No fundamental assumptions have been broken. Odds are overwhelming that everything will once again happen as it has thousands of times before.
A very risky play from a hedge fund has resulted in people who don't know what they're doing convincing more people who don't know what they're doing that there is a clear ally (other retail investors who are getting back at The Man) and a clear enemy (evil hedge funds that have robbed the American people), and that what they're doing is some sort of justice and not just an extreme market correction. They've attached emotions to these trades, and when the time inevitably comes that they have to become The Man to stand with The Man against The Man, a very small percentage will realize what needs to be done to trade another day, while the rest are going to learn how little say they actually had in this incident. WSB (or at least what it was before this) has had a lot of laughs at the expense of the latter group -- "it literally can't go tits up!" is trotted out whenever somebody finds out that they're not in control.
Active retail investment requires a fatalistic view of the market. This is hard to swallow when you think of going short as "bad" or squeezing out a hedge fund as "good."
Re: u/DeepFuckingValue and the GameStop Reddit mania
#354Earlier quoted context omitted.
After the sell-off, there’s a lot of cash (yes even more) washing around right? It has to go somewhere , and so it will come back into securities in probably a few weeks or max, months. The value represented isn’t exactly disappearing it’s still in the ‘system’. So why is a crash in equities prices such a big deal?
It depends. If a hedge fund went bankrupt, the cash will go to investors who may be risk averse. If the hedge fund survives it will have significant losses and probably be cagey about deploying a lot of capital again too quickly because it just stared into the face of death. In the case of individual investors selling off everything, they might be scared because everything is crashing. There's no rule that says the m…
There's also leverage/margin (i.e. borrowing to buy stocks). With higher volatility, investors might be less willing to use leverage, resulting in less total demand, which results in lower prices.
When stocks drop, excess income and capitol drops, reducing demand in the wider market. Companies come under pressure to cut costs, and end up doing layoffs. This further lowers demand, resulting in a feedback loop.
This is all described by Minsky's financial instability-hypothesis. And Steve Keen has built fully dynamic mathematical models that exhibit the process.
Re: u/DeepFuckingValue and the GameStop Reddit mania
#355What can GME do with the situation? Can they cash out at $500 or $1000? Can they offer additional shares in the market, after clearing it with the SEC? Then, can they take that windfall money, and actually reinvest it into R&D, and build their own GameStation 1 video game system? In order to justify their new lofty valuation.
That’s basically what AMC did. They issued 50 million new shares at-the-market last week. They also had a $600M loan that was convertible and converted into stock. As a result, they’re sitting on nearly a billion new dollars, which should help them ride the pandemic out.
I bought a bit of AMC. If WSB makes it pop to a multiple of where I entered, I'll cash out. Otherwise I'll hold through the recovery. Suspect there is enough pint-up demand for people to get out more post-COVID to boost the stock enough for me to exit higher in year or so anyway.
Re: u/DeepFuckingValue and the GameStop Reddit mania
#356Earlier quoted context omitted.
It's a price that "does not reflect legitimate forces of supply and demand". One of the canonical examples of an artificial price is spoofing, where you set up fake sell orders to trick people into thinking a stock is crashing so you can buy it at a discount.
So when people who want to buy and have the funds to buy are prevented from buying by their broker, would the resulting price be one that "does not reflect legitimate forces of supply and demand"?
In general, no, brokers being unwilling or unable to help facilitate a trade is a legitimate market factor. There's no fundamental right to have people trade with you.
It's would of course be a different story if the broker's unwillingness came from their participation in a price manipulation scheme. I don't think that's really plausible here, although I suppose I wouldn't rule it out given the crazy dumb things Robinhood has done in the past.
Re: u/DeepFuckingValue and the GameStop Reddit mania
#357Earlier quoted context omitted.
> The overall market is stressed, things are getting weird and I would not be surprised if this is the beginning of another stock market crash. GME short interest was still greater 100% of shares outstanding as of 1pm 1/29 (S3 Shortsight numbers). If forced to cover, short holders will have to liquidate other assets. Could those liquidations force more liquidations in a positive feedback loop? Hopefully no, but certa…
Yes, exactly. When a hedge fund is getting its face ripped off because its shorts are up 50 - 200%, it will liquidate its longs to cover. The rotational dynamics of many funds doing that at once can drive the price down on traditionally stable stocks that everyone owns. In a worst case scenario that could trigger a massive selloff which would crash the market. This is compounded by the fact that funds will defensivel…
> This market is terrifying.
I think this represents an upgrade from being chased by tigers. Sedentaryism, metabolic syndrome, being fired by the machine, sweatshops, homelessness, addiction, those are downsides from foraging aboriginal lifestyle. But being terrified of losing money is different than being terrified of getting literally eaten.
Re: u/DeepFuckingValue and the GameStop Reddit mania
#358Earlier quoted context omitted.
> Is it really anonymous? It at least aims to be so :) As with any anonymous p2p network you need to know: Your level of privacy depends on your threat level. If the government is after you, they may very well know exploits. If you just want privacy from corporations for perfectly legal reasons then you might be fine. > How does it compare to Tor and i2p? See "How is Freenet different to Tor?" here: https://freenetpr…
>However as they're both communication networks they do not provide censorship-resistance. The endpoints you're connecting to are central servers and can be taken down. Can you elaborate on this? This reads as essentially false to my understanding. If by endpoints you mean 'relays', those are not 'central servers'. If you mean directory authorities, then yes, those are centralized. With that said, I'm still not sure…
> Can you elaborate on this? This reads as essentially false to my understanding.
No, it's not false AFAIK :)
By 'endpoint' I mean what an address on those networks actually *addresses*.
Both a Tor-address (a .onion hostname, or a regular web address if you use Tor to access one), and an I2P-address, are essentially similar to an IP-address in terms of being the address of a *machine*.
They are anonymized, but the data is routed to the very specific machine which the address is of.
A Freenet address on the other hand is the address of a *file* - basically a hash.
So in Tor and I2P, even though the machine behind the address is anonymous, you can still DoS it because you have the address of the specific machine where the data is at.
In Freenet, you cannot DoS the machine because the address does *not* tell the network where the file is stored. It only tells what file you get. Any machine on the network can serve the file to you!
And in fact, if you try to DoS a file by requesting it very frequently on Freenet, it will instead be distributed MORE on the network: Machines along the path where the data is routed will cache the file.
That's what provides the censorship resistance.
Re: u/DeepFuckingValue and the GameStop Reddit mania
#359Earlier quoted context omitted.
Not a pro but I recently started learning some poker. Two texts that absolutely opened the game up to me were The Grinders Manual (fundamentals) and The Mathematics of Poker (where your stats/math background will be useful). The way I started was by dedicating 2 hours per day (1 hour studying, one hour playing online micro stakes). Next I will start learning and memorizing output from Solvers, that seems to be key to…
I’m curious. Poker has a lot of strong strategies and what not, but if a new player comes in, how do those strategies prevail? You may be confident with two Aces, but the player could be extremely confident in their king pair and wager as if they have a straight
Most poker players do not read books and drink while playing. As the stakes get higher then the meaning of a fish changes. Strategies that worked at lower stakes become blunders at higher stakes and so each time players move up those new players are the fish.
Re: u/DeepFuckingValue and the GameStop Reddit mania
#360Earlier quoted context omitted.
Right. My biggest concern with these plays, at this point, is that they're not taking into account the possibility of bankruptcy. There's a ton of "they have to buy it, if we hold all the shares then it'll go to the moon, 1k, 2k, 4k". (1) The sheer variety of financial vehicles available to professional investors is staggering, and while the initial DD was really good, we probably missed something at this point, and…
That's a great part of their sentiment - "I may not profit that much, but these fat cats will suffer". Also, bankruptcy still means a fair share in the assets of the bankrupted.
Well, the other fat cats will have a claim on a fair share in the assets of the bankrupted; the WSB investors would not have any claim whatsoever on the assets of a bankrupt hedge fund who shorted the same stock - they will have the stocks they bought, the fund does not owe them anything, the broken promise to buy and return loaned shares was to some broker, not to any retail investors.