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u/DeepFuckingValue and the GameStop Reddit mania

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Re: u/DeepFuckingValue and the GameStop Reddit mania

#401

Post by nexthash » Sat, Jan 30, 2021, 3:30 AM UTC

eMGm4D0zgUAVXc7 wrote: post #24

devops000 wrote: post #10

Earlier quoted context omitted.

I hope one day we will see an IPFS link

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…

What are the benefits and disadvantages of Freenet vs IPFS? I am genuinely curious, they seem superficially similar and yet Freenet has been around for 20 years. Personally I haven't heard of it but does it have a lot of traffic/popularity compared to IPFS?

Re: u/DeepFuckingValue and the GameStop Reddit mania

#402

Post by xur17 » Sat, Jan 30, 2021, 3:31 AM UTC

smattiso wrote: post #368

aeternum wrote: post #280

Earlier quoted context omitted.

GME issuing shares would be the smart thing to do. The primary goal of a stock market is really to allow exactly that. The market determines the cost of capital for each company, thereby influencing the allocation of capital in society. The question then becomes how efficiently the company can put that capital to use.

If they do that it's instant bankruptcy for GameStop. Nobody will ever shop there again. Period. It's over.

Agreed. I think the smart play is to come out with a grand plan that hopefully entices some people to hold onto their stock and keep the game going. Possibly use this to convince people that a small issuance of additional shares to do X would be a good idea. Then, just live off of the crazy publicity and hopefully good will this affords you.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#403

Post by jjeaff » Sat, Jan 30, 2021, 3:31 AM UTC

chordalkeyboard wrote: post #365

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…

To put it bluntly, this is because of the Federal Reserve. Fundamentals refers to the ability to generate a steady return of profit. This goes back to Graham and Dodd, “value investing” (“the intelligent investor” and “security analysis”) and the perspective of a long term investor where all investments are fungible according to their risk adjusted rate of return. But since the government can’t fund itself on revenue…

If the government was funding itself on printed money, we wouldn't see that massive debt clock ticking ever upward.

In other words, the government is partly running on borrowed money.

There is some level of money being printed to buy some of that debt, but that is in more severe cases like recently.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#404

Post by evilturnip » Sat, Jan 30, 2021, 3:32 AM UTC

bawolff wrote: post #385

__MatrixMan__ wrote: post #374

Earlier quoted context omitted.

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.

Almost everything has a cost and benefit. Point is to tilt more toward benefit.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#405

Post by xur17 » Sat, Jan 30, 2021, 3:33 AM UTC

cwhiz wrote: post #311

dcolkitt wrote: post #72

Earlier quoted context omitted.

The difference is the supply of bitcoin is fixed. Whereas a company can issue shares at any time. Obviously if the market cap stays at $30 billion for a long time, Gamestop management is going to start spending their overvalued stock like drunken sailors. First it'll be just to plug up the money their operations are constantly losing. Then they'll start going on acquisition sprees, giving out giant compensation packa…

The supply of Bitcoin is “limited” but in reality it’s irrelevant. 1 satoshi is 0.00000001 which means for every 1 Bitcoin in circulation there is actually 100,000,000 satoshi. You can’t buy a hundred millionth of GME.

The supply of Bitcoin being limited absolutely is relevant, and you can buy partial shares of stock (not sure if you can go down to a hundred millionth, but not sure that's relevant). The point is that Gamestop can issue new shares, diluting the existing supply, making it a terrible "store of value". Bitcoin on the other hand has a fixed supply that cannot be increased.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#406

Post by jjeaff » Sat, Jan 30, 2021, 3:37 AM UTC

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 don't need to gain control of the assets. You just sell some of the stock for a profit as it rises (and only getting capital gains tax rates). This can be repeated ad infinitum assuming the underlying asset value grows indefinitely and the stock keeps splitting.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#407

Post by jjeaff » Sat, Jan 30, 2021, 3:40 AM UTC

adolph wrote: post #394

jbverschoor wrote: post #129

Earlier quoted context omitted.

If nobody sells, any seller can charge ANY price they want. 1 trillion per share. When more is shorted than exists, you’re in a let good place to know that there’s no such thing as the last biggest fool.

If nobody buys, does the trillion dollar seller make a sound?

Only if insolvency makes a sound. If the shorts don't have the trillion dollars to buy that stock to pay back the debt by the deadline then they are sol.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#408

Post by IntFee588 » Sat, Jan 30, 2021, 3:43 AM UTC

yreg wrote: post #35

raziel2701 wrote: post #22

On wsb u/deepfuckingvalue showed he still holds 50,000 shares and 500 deep ITM call options. He has secured a profit of $13.8 million dollars, and his remaining open position is valued at $45 million. I would caution people to not quickly fall into the "if he's still in, I'm still in" meme. He has secured a $14 million bag, regardless if the stock goes to zero he's already secured a life changing amount of money, he…

Well if a stock market crash triggered by this is realistic (which I agree is), doesn't it make sense to hold a bit of GME for insurance? I understand that there's no guarantee one will be able to exit it successfully even if it flies so high that it crashes the market. However I don't see a better insurance for people who don't have access to options/inverse etfs and don't want to sell their stocks.

> if a stock market crash triggered by this is realistic

Honestly, I don't think it is and there would be more media attention if it was. The firms that are shorting GME only have something like $50 billion AUM. Lehman Bros was around $600 billion and was a lot more integral to the markets. The only real issue would be a lack of liquidity, which isn't going to cause a crash alone.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#409

Post by pb7 » Sat, Jan 30, 2021, 3:43 AM UTC

runarberg wrote: post #212

xienze wrote: post #205

Earlier quoted context omitted.

> You can save a healthy retirement by putting a portion of your salaries in a savings account in your local credit union. You must be joking. My credit union is offering .1% on savings, and it’s not like they’re some extreme outlier, rates are incredibly low across the board. You are actively harming your future by doing this, you aren’t even keeping up with inflation!

No I’m not joking, nor am I harming my future. I don’t have to make an optimal amount of growth on my savings to afford my retirement. There is no harm in owning less money then if I had used them to swindle more workers out of their profits on the open markets. In fact, every dollar you make as a result of not working is a dollar somebody else worked for and didn’t get. You are harming workers by earning money on th…

Every dollar you make in interest from your savings account at your credit union is $30 that someone had to pay the credit union in interest on their mortgage. You are swindling people out of their hard earned money — people who are struggling to own their home or business — to fund your own retirement.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#410

Post by chillwaves » Sat, Jan 30, 2021, 3:44 AM UTC

chordalkeyboard wrote: post #357

fractionalhare wrote: post #249

Earlier quoted context omitted.

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.

Except humans have been apex predators for a long long time.

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