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u/DeepFuckingValue and the GameStop Reddit mania

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Re: u/DeepFuckingValue and the GameStop Reddit mania

#491

Post by OJFord »

treis wrote: post #337
OJFord wrote: post #322

Earlier quoted context omitted.

> The narrative has changed so quickly from this being a value play, to a short squeeze, to now militant activism via buying stock as a means to sticking it to the man. Absolutely! A week or so ago I watched his July 2020 video (declaring it a great value buy looking for 50-100% at around $4..!!) out of curiousity. Interesting, but totally disconnected from the short squeeze mania, I missed that leap, at least from t…

It's wild over there now. WSB was always like the kid at school that always got into crazy stuff. Now, they're off their meds, haven't slept in a week, and just did a bunch of coke.

I don't know, I've lurked there a bit in the past (for amusement/actually got a couple of good tips from the more serious end of posts, didn't see DFV/RK on GME at the time unfortunately!) but when I looked last night it just seemed filled with obviously new people commenting, membership has tripled or something. I didn't really participate in its 'culture', but I think it would be a shame if it lost that - after all I don't lurk on r/investing or get any amusement from it. I suppose probably they'll get bored when there isn't an official announcement that the next quick buck shall be X and here is a step by step guide on purchasing shares and options, and move on.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#492

Post by unglaublich »

trianglem wrote: post #366
chillacy wrote: post #178

Earlier quoted context omitted.

> militant activism via buying stock as a means to sticking it to the man. > beginning of another stock market crash Hmm sounds like it's working then.. Going off of the resentment against the 'elites' in wsb comments to the tune of "I started broke and I'll go broke again but if the rich go broke..."

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.

Yes, hedge fund's gambling affects us all and now they went too far and woken up an anti reaction. Don't blame others for the risks that Wall Street takes.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#493

Post by PartiallyTyped »

tinyhouse wrote: post #267
PartiallyTyped wrote: post #174

Earlier quoted context omitted.

Simply saying 'fundamentals' allows one to nullify things they don't understand, like owning the rights to one of the biggest duopolies (x86 that without one becomes a monopoly). The issue with tech, much like math, is that it often takes a while to figure out all the potential, case in point GPGPUs and Deep Learning revolution. The tech, the ideas, the internal code/models, the people (Jim Keller in AMD, and TSLA) a…

I don't argue with that. It's called growth opportunities. But don't you think that a business losing customers quarter after quarter is a bad sign? Or that having a debt bigger than it can afford? etc. Let me say this, you cannot ignore the fundamentals until you can... (e.g., GME)

I would counter with the fact that humans ignore - either by their own accord, or through the unjustified belief that things will continue to be the way they were - the views that do not support the narrative they decided is true or they deem unlikely.

Case in point, who in their right mind thought a bunch of self proclaimed smooth brains would hold and not panic against ladder attacks and FUDs? The smooth brains have been in the game as much, they have seen their capital dropping to 0 more than the HedgeFunds are accustomed to losing at their own game.

A hedge fund with capital and influence, capable of controlling the narrative, could and tried to decide the outcome of their bet based on their bet, we saw this with TSLA as well. They believed, like most people, that GME would go bankrupt, they didn't consider the bull case [1] because things had been going down for so long, but GME's revenue is periodic, bringing us back to the fallacy. Things are how they are until they are not, and the inability to adapt due to logical fallacies becomes evident. There's a reason why reasonable people in WSB suggest an investor should know both cases by heart, if you can not afford to control the narrative, you can not direct the behavior of the market.

[1] www.gmedd.com

Re: u/DeepFuckingValue and the GameStop Reddit mania

#494

Post by Leherenn »

Hallucinaut wrote: post #388
Leherenn wrote: post #255

Earlier quoted context omitted.

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.

I don't think it ultimately gives inherent value to the stock, because you don't extract value from the company with this mechanism, but from others.

Let's take a planet in another galaxy. I would argue the inherent economic value of this planet for a human on Earth is null. You cannot and there's no realistic time frame in which you would be able to extract value from owning it. And yet you could sell the ownership, lend it, ..., and make money. That doesn't give inherent value to the planet, it's just speculation.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#495

Post by Leherenn »

jjeaff wrote: post #406
Leherenn wrote: post #255

Earlier quoted context omitted.

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.

But someone, ultimately, must be able to. You can't exchange your 1% of shares against 1% of the company assets, unless you have enough share to control the company.

Let's take Facebook, where I think Mark Zuckerberg has ~60% of the shares, and only 40% are on the market, thus even if you buy them all you cannot gain control of the company. You can't extract value from the company from this avenue.

Again, what gives inherent value to a stock is that you, or someone else, will be able at some point to get value from the company itself, not from someone else. In a rational market, a price rise should mean the market will eventually be able to extract more value from the company then thought.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#496

Post by rglullis »

cachvico wrote: post #447
rglullis wrote: post #246

Earlier quoted context omitted.

It's not dismissive. They already got their money. $257 million, to be exact. No one knows how Filecoin is going to make money except for Protocol Labs.

By providing value, therefore driving up the market price of the integral reward. Currently at $22, not bad for a random coin. I.e, the value of the coin is driven by the interest in the tech it provides.

That's a very hand-wavy answer, no?

"The market price of the integral reward"? What is that supposed to mean? Filecoin is just a medium of exchange for people buying and selling storage services. Filecoin does not offer anything specific and its platform has to compete with plenty of mature, efficient alternatives.

> the value of the coin is driven by the interest in the tech it provides.

What "tech" does it provide? Not IPFS, for sure, that already was under development and could have come to fruition as a regular open source project. A decentralized market for storage, "proof-of-spacetime"? These might be interesting. But again, if we want to fund these things there are surely better/cheaper ways to do it. $250 million is a lot of money for the tech that was developed so far.

More importantly: there is nothing about the "tech" that requires $FIL to make it work. The market dynamics will be the same whether they used FIL, DAI, ETH, wrapped BTC or even a dollar-pegged token they decided to issue. People are not going to pay more or less for their storage because the price of the token went up or down.

> Currently at $22, not bad for a random coin.

These are the kind of statements that almost make me side with the buttcoiners. At this point, with all the speculation, market manipulation and naive FOMO "investing", there is no useful information to be had from the price of the token.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#497

Post by marvin »

throwaway-571 wrote: post #188
kinghajj wrote: post #140

Earlier quoted context omitted.

> The stock market has never done anything for me. I mean, it could, if you were to invest. > Shareholders making money out of my work is not exactly in my interests, nor is it in the interest of the majority of the world’s workers. So instead of, say, encouraging people to learn how to invest, and maybe even incentivizing firms to allocate shares to their employees, you'd rather just have the whole stock market burn…

Robinhood was founded on that idea, but it turns out it's kinda hard to deliver. When people where trying to invest into this rising stock they ran out of credit at their clearinghouse and had to stop their customers from trading.

The real problem is that the stock market has historically delivered 7-9% on average, and consensus is it will likely be considerably lower in the future. Making significant money from an ownership share like that takes decades of disciplined saving and investing. The narrative of WSB that "the rich won't let poor people invest in the stock market like they do" is ridiculous; most of the rich would be very happy with 8% per year on average.

There might be something to the idea that an internet forum will have a harder time getting away with the sort of market manipulation that the most unscrupulous hedge funds do all the time, but that's a different discussion entirely.

There's of course a related discussion of how much some people can afford to invest in the stock market each year, but it's really only partially related. I do understand where the anger is coming from, as should everyone who has been following American politics since 2015 at the latest.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#498

Post by ignoramous »

breck wrote: post #256
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 looks like by the time mburry was posting here, he had already publically announced a 3M share long position in GME ( https://www.businesswire.com/news/home/20190819005633/en/Sci... )

Has it been confirmed that u/burrym is indeed Michael Burry of Scion Asset Management?

Re: u/DeepFuckingValue and the GameStop Reddit mania

#499

Post by Closi »

throwawayboise wrote: post #375
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…

If people know why the hedge funds are selling other positions (to cover shorts) I don't see that triggering a crash, more likely a buying opportunity. Crashes happen when everybody starts selling and nobody knows why, so they sell even more.

It seems like a reduction in short-selling will probably help the market be healthier.

Companies shorting 130% of a stock doesn't help the market.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#500

Post by joncrane »

erikbye wrote: post #490
x3sphere wrote: post #299

Earlier quoted context omitted.

That's why most people should just stick to index funds.

If they get out before crashes. Otherwise you could end up at zero again after being in for a decade. Maybe that was timed just with your retirement when you were about to make use of your now vanished gains.

The value of a big index fund going to zero is so inconceivable as to be hardly worth considering.

That would mean that ALL 500 of the US' largest companies by market cap all go completely bankrupt WITHIN ONE CALENDAR YEAR.

I think if atomic bombs were to destroy the 50 largest cities in the USA, that this wouldn't happen. There would still be enough economic activity in enough of the 500 companies to justify some price above zero.

So the scenario would literally be the apocalypse. The kind of apocalypse where the US dollar has zero value. The kind of apocalypse where the amount of money in a brokerage account would not even be on the top 100 list of things a human would be worried about.

Even losing 90% of value would be an event so unprecedented in magnitude that it would make anthropomorphic climate change seem like a footnote in history.

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