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u/DeepFuckingValue and the GameStop Reddit mania

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Re: u/DeepFuckingValue and the GameStop Reddit mania

#521

Post by noloblo »

wp381640 wrote: post #415
nostrademons wrote: post #161

Earlier quoted context omitted.

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…

Kinda funny small-world stuff that Justin Frankel (Winamp + Gnutella) went onto AOL/TimeWarner and got into a feud with an exec he wrote a passive-aggressive blog post about without naming him. The exec was Chamath Palihapitiya. Justin was and always will be a legend - he wrote an AOL Messsenger ad blocker and mp3 search plugin _while working at AOL_

is there a link to the blog post? of Justin writing about unnamed exec

Re: u/DeepFuckingValue and the GameStop Reddit mania

#522

Post by adolph »

adolph wrote: post #387
fractionalhare wrote: post #281

Earlier quoted context omitted.

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.

Alt alt hypothesis: smart hedges realized the overexposure while ago and wsb is schooling the dumb hedges who filled the vacuum.

https://www.institutionalinvestor.com/article/b1q3cxqlbmltyl...

Re: u/DeepFuckingValue and the GameStop Reddit mania

#523

Post by erikbye »

joncrane wrote: post #500
erikbye wrote: post #490

Earlier quoted context omitted.

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 pr…

Sorry, to clarify: I meant end up at zero gain, not zero as in loss. So instead of losing money, it would just be not having gained anything in 10 years, which is not that unlikely, and has happened. Ask me, that is 10 years of potential profit loss, had you invested differently.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#524

Post by runarberg »

recursive wrote: post #514
boring_twenties wrote: post #485

Earlier quoted context omitted.

I make something and sell it to you for $5. Tomorrow, you sell it to a third person for $10. Who lost money here?

A new interpretation came to overnight, as if in a dream. I don't know what's correct, but here it goes. You and the third person both lost money in some unknown combination. Either you're selling for a lower price, or 3rd is buying for a higher price, or probably both. In the metaphor, this is aggregated across bazillions of transactions, and ignores benefits like supply and demand are generally evened out over time…

I think the question is flawed... Or at least irrelevant.

Since we are talking about the stock market (and stock brokers don’t make anything of value) a better question would be:

You hire a worker for $2 to make something you sell for $5. Someone buys it for $5 and sells it to a forth person for $10. Who lost money?

Now to make this simplification more accurate, there is a system in place for the $5 to $10 transaction called The stock market where there are bazillions of these transaction. Another question arises. Who is selling something for $5 when they could sell it straight to the forth person for %10? Who has is $10 and why are they paying $10 for it? How did they get that $10? Did they make something worth $10 and sold it for $10?

I think the real answer for who is loosing money is: Workers across the globe are.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#525

Post by recursive »

pb7 wrote: post #511
recursive wrote: post #483

Earlier quoted context omitted.

Most of the activity (all of it?) on the stock market seems unrelated to IPOs. Is there any particular reason stocks must be transferable?

Yes, it’s an incentive to encourage buying by reducing the commitment.

It does seem to have that effect. It also seems to have other effects. And it seems to be mostly other effects. If funding companies requires all those effects, it seems legitimate to question whether it's a net benefit.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#526

Post by paulddraper »

misiti3780 wrote: post #516
paulddraper wrote: post #318

Earlier quoted context omitted.

> Why is this such a big deal? You don't see it? You don't see any reason why this is a big deal? When was the last time brokers shut down one direction of trading on stocks? --- EDIT: FWIW, you can't shut down one direction of trading, there's a buy for every sell, but you can skew who get to do the buy and the sell.

2008. https://www.sec.gov/news/press/2008/2008-211.htm#:~:text=Was... .

1. That was the SEC, not brokers.

2. People could still buy and sell.

3. I'd classify 2008 as a big deal as well.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#527

Post by troupe »

runawaybottle wrote: post #397
franklampard wrote: post #108

Earlier quoted context omitted.

what is the fundamentals for the short positionsv

The incredible due diligence of ‘I think no one is going to buy cds anymore yo’.

A short position when the stock is at $350 is probably more of the idea that the fundamentals point to a much lower price in the future.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#528

Post by troupe »

cwhiz wrote: post #300
tootie wrote: post #86

Earlier quoted context omitted.

GME is absolutely going to crash and everyone knows it. There was a mod post just today reminding everyone to be ready. The stock is worth $10-20 on it's merits and that's where it will land. We just don't know when. The chance of this as a contagion that brings down indexes seems very unlikely.

“Merits” The stock is worth what people think it’s worth. If people keep buying and holding, then it is worth what it is worth.

That might be true in the short term, but can you point to the stock of a company has continued to lose money over decades still maintained a very high stock price?

Re: u/DeepFuckingValue and the GameStop Reddit mania

#529

Post by [deleted] »

amluto wrote: post #518
kmonad wrote: post #379

Earlier quoted context omitted.

I feel that I learnt something from this twitter thread. https://twitter.com/KralcTrebor/status/1354952686165225478

That’s a good thread. Here’s the part that makes no sense to me: why can’t Robinhood use customer funds for their deposit? Imagine a degenerate case: all but one client make no trades at all. One client has $100k deposited and buys $100k worth of GME. Prior to settlement, GME drops by 50%. That client is (effectively) out the entire $100k, and they are owed $50k worth of GME. Robinhood needs to post somewhere between…

[deleted]

Re: u/DeepFuckingValue and the GameStop Reddit mania

#530

Post by recursive »

runarberg wrote: post #524
recursive wrote: post #514

Earlier quoted context omitted.

A new interpretation came to overnight, as if in a dream. I don't know what's correct, but here it goes. You and the third person both lost money in some unknown combination. Either you're selling for a lower price, or 3rd is buying for a higher price, or probably both. In the metaphor, this is aggregated across bazillions of transactions, and ignores benefits like supply and demand are generally evened out over time…

I think the question is flawed... Or at least irrelevant. Since we are talking about the stock market (and stock brokers don’t make anything of value) a better question would be: You hire a worker for $2 to make something you sell for $5. Someone buys it for $5 and sells it to a forth person for $10. Who lost money? Now to make this simplification more accurate, there is a system in place for the $5 to $10 transactio…

Without the middleman it seems possible that some of the buyers and sellers never might have found each other. I don't know.
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