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u/DeepFuckingValue and the GameStop Reddit mania

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Re: u/DeepFuckingValue and the GameStop Reddit mania

#381

Post by bawolff »

nostrademons wrote: post #161
eMGm4D0zgUAVXc7 wrote: post #24

Earlier quoted context omitted.

Why do people constantly have to re-invent the wheel? :( Freenet [0] has been providing censorship-resistant, anonymous, decentralized hosting for 20 years - and is still in active development! You could upload it to Freenet without any server whatsoever and it would stay online for as long as it is popular, even if your machine goes offline. And you'd be anonymous while doing so! [0] https://en.wikipedia.org/wiki/Fr…

I remember when this came out 20 years ago. It was part of the whole wave of P2P filesharing programs that came out between 1999-2002: Napster, Gnutella, Kazaa, Audiogalaxy, etc. Amazing it's still going on. BTW, for folks new in tech - it's amazing how influential that wave of programs were, even though they largely failed in the marketplace. Napster founder Sean Parker later became the first investor and first pres…

They may not have made money, but they certainly succeded in getting marketshare. The main reason they dont now (other than napster being sued out of existence) is that bit torrent displaced them, and really that should be considered the same class of program

Re: u/DeepFuckingValue and the GameStop Reddit mania

#382

Post by SpicyLemonZest »

girvo wrote: post #169
SpicyLemonZest wrote: post #90

Earlier quoted context omitted.

The theory I've seen is that there could be hidden systemic risks here. If GME tanks suddenly, there's some possibility that traders bailing out of their trades will take down Robinhood (who doesn't seem to be very healthy right now), and a major broker collapsing is never gonna be great for the market. I share your skepticism that it would actually happen this way, but it seems at least somewhat plausible.

Robinhood are tiny on the brokerage stage. Important to retail, barely matter otherwise. That’s my understanding at least

That seems consistent with what I've read recently. Good news.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#383

Post by scythe »

jaycroft wrote: post #217
hntrader wrote: post #113

Earlier quoted context omitted.

I think this whole episode might cause the next market sell-off: (1) fund degrossing as the initial driver - already happening (2) everyone is being reminded of 99/00 mania (3) uncertain regulatory environment surrounding trading (4) worries of systemic risks created by bubble GME going higher is likely to trigger it more than it dropping off right now

I think there's also evidence that the "short bubble" might be more widespread than we think. I'm not entirely convinced that Melvin was able to unwind their 50mln short position and drive the short interest down on Ortex (they're the best thing we've got in terms of guessing how much true short interest there is, because exchanges only report once or twice a month on a week or more delay) by covering. Equally likely…

>Equally likely in my mind is that Citadel bought Melvin's book thinking that it had a better plan than unwinding the short just yet. Instead, "hide" the short someplace that Ortex isn't looking and that the exchanges won't report on for another 3 weeks. That would be their order flow with a company they are in a unique position with - Robinhood - where lots of the buy orders are coming from. If you were Citadel and a little unscrupulous, you could immediately route every sell order on RH to the market but keep the buy orders for yourself. This positions you as short to Robinhood users, and you get to send those sold shares back to the book you bought from Melvin to unwind that short. So, the short does still exist, but now it's not visible to outside brokers. Outside brokers, when Ortex calls them up, will say, no no, Melvin covered a bunch today and short interest actually went down!

Is that legal? Manipulating report agencies to manipulate the value of a stock?

There are multiple Congressmembers interested in this situation. That could be a very dangerous game.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#384

Post by bumblelad »

ggggtez wrote: post #183
jzoch wrote: post #89

Earlier quoted context omitted.

Trying to figure out the "fundamental" value of anything is a fools errand. Im not saying GME wont drop eventually but there is no value on fundamentals of everything. Look at all the short-sellers of TSLA who made the same mistake. These companies are valued on what the market decides and we all know "The market is irrational".

To be honest, this is kind of the problem I have to stock investing as a whole. It sounds great to "invest on the fundamentals", but there doesn't appear to be a way for the average person to even comprehend what "the fundamentals" even are. But there has to be at least one fundamental: If the company goes bankrupt, the stock is worth nothing. Gamestop is most certainly going to go bankrupt eventually. Their business…

At a certain price, fundamentals do actually matter. This is the price discovery phase of a company that's not really well known.

The issue is that at current prices, speculation and forward thinking far outpace any value one could derive from analysis of fundamentals. A very successful strategy is momentum trading. Technical/Trend Analysis is all about understanding momentum trading, and at what entries and stops algorithms set up their strategies.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#385

Post by bawolff »

__MatrixMan__ wrote: post #374
trianglem wrote: post #366

Earlier quoted context omitted.

But it’s no longer effecting just the rich. It’s working people with pensions and 401ks... and this better not mess up the decade long sweet bull market for a handful of millionaires.

I'm not without sympathy for them, but I also think it would be good if people stopped allocating their retirements towards "money tricks on Wall-Street" and instead found ways to put it towards creating a world worth retiring in.

Money tricks on wall street do have effects on the real world, some of which are positive.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#386

Post by ip26 »

ignoramous wrote: post #106

Looking back at (u/deepfuckingvalue) Keith Gill's comments on r/wsb, it looks like they had a solid theory to cash out by Jan 2021 for $8+ a share (most of their calls starting June 2019 were 80 cents a share or less [0]). This was by no means a strategy to make money by squeezing the short, though one user, conspicuously named u/burrym, speculated that it ought to be [1]. [0] https://archive.is/Y953e , https://archi…

It's intriguing that he, while not quite an "insider", is from an investment & finance background. More of an Arminius figure than some random Joe off the street.

Casts a slightly different light on the whole narrative about the uprising of retail investors.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#387

Post by adolph »

fractionalhare wrote: post #281
codeisawesome wrote: post #277

Earlier 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…

Alt hypothesis: Retail just learned a method of turning tables. Hedges will temper market moving short positions due to increased risk. Overall it’s a rebalance due to innovation.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#388

Post by Hallucinaut »

Leherenn wrote: post #255
reducesuffering wrote: post #221

Earlier quoted context omitted.

Berkshire Hathaway? Do you understand the tax-reasons why a company would buy back shares instead of issue dividends? What about book value, where a company could have $1b in assets (real machinery, tractors, factories, etc), no debt, and no dividend? Does that mean it still has no fundamental value?

A stock has value if someone ultimately can extract value from it. As far as I know, there are only 2 ways, dividend and gaining control of the assets. A stock where neither of both are possible ever (now and in the future) has no fundamental value since you have no way to extract value from it, it's pure speculation. Stock buybacks only have value because something else gives the stock value. Of course, I don't thin…

You missed lending the stock to others for an interest payment, and when there exists other market participants with a view the stock will be worth more than it currently is.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#389

Post by adolph »

pishpash wrote: post #298
ggggtez wrote: post #183

Earlier quoted context omitted.

To be honest, this is kind of the problem I have to stock investing as a whole. It sounds great to "invest on the fundamentals", but there doesn't appear to be a way for the average person to even comprehend what "the fundamentals" even are. But there has to be at least one fundamental: If the company goes bankrupt, the stock is worth nothing. Gamestop is most certainly going to go bankrupt eventually. Their business…

"Gamestop" is a string of letters. Unless it has a pile of unrestructurable liabilities, what's forcing it to become bankrupt vs. being a startup?

Probably its directors, who would probably be part of a startup if it was in their nature. As a director of GameStop they likely have other fine competencies suitable for running a large reseller org.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#390

Post by baby-yoda »

hehehaha wrote: post #18
u678u wrote: post #17

I like Matt Levine's comment " The guy behind one of the greatest trades of our time was giving out financial advice for MassMutual, and somehow they let him go." edit I missed the best part of the quote "I hope he showed up at client meetings in a headband and sunglasses with a glass of champagne in one hand and a chicken tender in the other. I hope he was like “never mind life insurance, man, you gotta buy GameStop…

Really helps discredit this notion of retail vs hedge fund. Most people who frequently make “DD” posts to r/wsb have ties to the financial industry and Wall Street. They either work there or have worked there. And yet they are critical of the Man? This is like ex-Facebook employees having a found-Jesus moment.

personally i haven't seen any commentary from DFV disparaging institutions. its not accurate to take WSB commentary in aggregate and assign it to an individual.

not to mention, not everyone is in a position to say "screw the man" and do their own thing. the ideal exists but the means may not be there.

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