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Comment by fluffything | Hacker News Reader

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fluffything

> They think "people aren't going to stop renting cars"

Do they? Nobody buying this stock thinks Hertz is going to recover.

They think "I'm bored and buying this worthless stock is risky and fun".

That is valuable to some people, and hence why the stock price is up.

Hertz selling more shares to try to save the company is pretty dumb, because that is not what it share holders want.

Hertz new share holders want to see the company and stock burn as much people as possible in the most spectacular way possible. That's what Hertz has become.

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> Do they? Nobody buying this stock thinks Hertz is going to recover.

You should have a chat with them. People absolutely believe this. Same goes for airlines and cruise lines. I'm a former hedge fund trader, so I've had many of my friends come to me lately, and seek advice. I often ask how they're making money now and they say (for instance) things like "I walk/drive by Starbucks and I see people still buying coffee, so I bought SBUX". They're not doing any sort of real analysis, but their pseudo-analytic abilities are reinforced by the Fed. They don't really think that they were right because everything went up, they think it boils down to common-sense theses like the above.

The flip side is how Ford generates killer sales in China, China has the population of America in a single city, yet analysts look at a few recalls on a new model redesign and knock the shares down 50%

Common-sense fundamentals take a back seat to technical analysis and HFT algos these days

If China actually had the population of the US in a single city, they wouldn’t be selling cars. There wouldn’t be enough physical space. People would take the subway.

May be you’re not actually looking at things in a common sense way.

If a city had more than 300 million people even subways wouldn't be enough. Maybe Asimov-inspired mass treadmill walkways (imagine massive things like airports but increasing in speed as you get further from the sidewalk).

USA = 328.2 million

Shanghai = 24.28 million

(2019 numbers)

Reading WSBs, those buying Hertz right now know they are idiots, and do it anyway, knowing that they will probably lose all their money, but hoping that if they do not, they can buy a lambo.

/r/wsb are not the ones driving this but rather the millions of new accounts at zero-cost brokers, hours and hours of boredom, and possibly stimulus checks

Don’t forget about the market makers either. Robinhood and other brokerages sell data on the positions their traders are entering to their market makers (like Citadel). Then the algos front run the trade, and you end up in a situation where a stock like HTZ can rally exponentially in a day.

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