u/DeepFuckingValue and the GameStop Reddit mania
wsj.com
wsj.com
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!
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 president of Facebook. Also involved in the wave (in a tangential way) was Mark Zuckerburg, whose Synapse Media Player got a $M+ buyout offer from Microsoft while he was still in high school. Uber founder Travis Kalanick's first two projects were Scour (a P2P filesharing app) and Red Swoosh (a P2P CDN). I met the AudioGalaxy founder while working on Google Search - he later went on to become one of the early Waymo engineers. The Kazaa founders later went on to found Skype, and we know where that went. Chord (an academic research project in distributed hash tables) was led by Robert Tappan Morris (originally famous for creating the Internet Worm of 1988), who then went on to co-found YCombinator, which owns the website you're reading this on. The gossip protocol invented & refined by Gnutella forms the basis for many cryptocurrency P2P protocols like Bitcoin & Ethereum.
There's probably several trillion dollars in market cap attributable to the intellectual descendants of a bunch of nerds who wanted to share stuff over the Internet and fuck over the RIAA, MPAA, and governments.
Justin was and always will be a legend - he wrote an AOL Messsenger ad blocker and mp3 search plugin _while working at AOL_
https://github.com/sanity/tahrir
"Tahrir aims to be a distributed, decentralized, scalable, and anonymous "workalike" for services like Twitter, Google Plus, and Facebook. It is at an early stage of development, but is being actively worked on by a number of volunteers."
Think of freenet as anonoymous Gnutella
It at least aims to be so :)
As with any anonymous p2p network you need to know:
Your level of privacy depends on your threat level. If the government is after you, they may very well know exploits. If you just want privacy from corporations for perfectly legal reasons then you might be fine.
> How does it compare to Tor and i2p?
See "How is Freenet different to Tor?" here:
https://freenetproject.org/pages/help.html
TL;DR: Freenet is a self-contained *storage* network. Tor is a *communication* network, I2P as well. The latter is also self-contained. However as they're both communication networks they do not provide censorship-resistance. The endpoints you're connecting to are central servers and can be taken down.
Anyway, software doesn't have well respected ISO standards and 20 years is an eternity in the age of the internet. So I don't see a problem with ipfs. Also, ipfs looks like it's more flexible and reusable.
- Anyone can use the "KeepAlive" [0] plugin to pin content.
- Nobody can take down any content, not even the original author [1].
Censorship-resistance is a central design goal of Freenet.
[0] https://github.com/freenet/plugin-KeepAlive [1] https://freenetproject.org/pages/help.html
There you go. It's not perfect though because a lot of the links still point to live assets. But it captured the important bits.
SingleFile is good for this:
- https://addons.mozilla.org/en-US/firefox/addon/single-file/
- https://chrome.google.com/webstore/detail/singlefile/mpiodij...
https://cloudflare-ipfs.com/ipfs/QmTW7sdBbZ1BXau8Cmrpv5srf38...
That's the beauty of IPFS. You can use whichever gateway you want, even your own.
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 can afford to weather the storm. If you're holding because he's still in and you haven't taken any profits you are nowhere near in the same position as him.
A hodling mania has overtaken the subreddit that would make btc blush. Know that we don't know what kind of deals are happening behind closed doors in these two last days of manipulated activity. A sustained short interest does not necessarily mean that the shorts are holding their initial position, they could have closed and reopened at these elevated levels.
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. The rhetoric is as volatile as the price. The overall market is stressed, things are getting weird and I would not be surprised if this is the beginning of another stock market crash.
GME short interest was still greater 100% of shares outstanding as of 1pm 1/29 (S3 Shortsight numbers). If forced to cover, short holders will have to liquidate other assets. Could those liquidations force more liquidations in a positive feedback loop? Hopefully no, but certainly possible.
This is compounded by the fact that funds will defensively sell off (or sell short) stable stocks owned by other funds that look like they're about to blow up. If a fund seems like it's circling the drain and it owns 5% of a ticker, other firms are not going to wait for it to implode and move the price down before they liquidate their own positions in that stock.
This market is terrifying.
Crashes happen when everybody starts selling and nobody knows why, so they sell even more.
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.
If the shorts from $20 all got out, and you're seeing new shorts that got in wednesday, the dynamic is much different.
The actual value was 113% from S3, but other sources had different values so I rounded down. While there is nothing magic about 113% or 100% or any other number, it is a measure of the difficulty of covering the entirety of the short interest: Higher numbers are more likely to result in a short squeeze, since those covering will likely have a higher bid to attract the attention of longs.
> 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..."
> Give me $1 and I'll make sure your target loses $5
Assuming all eco-tech companies on WS are trustworthy enough (not Enron-esque), and investing in eco-tech will "create a world worth retiring in", most people would have seen a significant part of their retirement go to zero.
Or if they decided to invest in a publicly traded life-sciences company in hopes of finding more breakthroughs, they would see their investment go towards funding some pricey acquisition instead.
"Create a world worth retiring in" is as vague as it gets.
There is no way that GameStop has an actual fundamental value of $300 per share. That price is clearly inflated, and in a few weeks will decrease, probably to somewhere above $20, but not that much higher. The market will eventually correct, but $300 is an over-correction for sure.
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".
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 model doesn't work for today's market.
No one is going to convince me that GameStop has a way to avoid that eventuality.
Humans are emotional and make mistakes, but most investors at least attempt to make sound investments, and that’s what drives the market at the end of the day.
If GameStop the company continues its failing trajectory, then GameStop the stock will eventually follow.
https://www.bloomberg.com/opinion/articles/2021-01-29/reddit...
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?
What matters is that the company is capable of making cash and, ideally, of increasing that amount of cash with time. Dividends are just a capital allocation decision.
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.
The price is bonkers.
The fact that IBKR couldn’t handle a negative oil price at that time made me realize that for all their marketing as being a higher quality broker for serious investors, they had some serious holes.
Then when they stopped buys on GME while Vanguard and Fidelity still allowed them, I gave up on IB completely.
Right now I’ve bought puts on IBKR - I expect a lot of clients with money will drop them (along with Robinhood etc.) and move to Vanguard/Fidelity.
If I am not mistaken he did say in one of his videos that there is a chance for a squeeze to happen.
As the saying goes: If you're at a poker table and you can't tell who's the fish, get up. You're the fish.
But with payment for order flow you know there are tons of other fish at the table. That changes things, as you only have to beat the other fish to get a small payout. And the sharks aren't focusing on you in particular, so you might get lucky and beat the sharks.
To quote Obi-Wan: "Who's more foolish? The fool or the one who follows him?"
If you assume that all Joe Random on Robinhood can do is to chase momentum and try to offload before everyone else, then yes.
But if you believe that certain Joe Randoms are actually talented and lucky enough to identify a bona fide unrealized potential in a stock and then invest in that, all the other Joe Randoms doing stuff provides enough noise that you don't get immediately picked up as a signal by the big players who can outgun you.
My daily numbers were in tens of thousands range rather than $11M, but the effect was the same.
I think these realizations are why much of the r/WSB discourse over the past two days has shifted from "we're going to be millionaires" to "i'm just in it at this point to stick it to the man". That's fair, and some people did legitimately become very rich off of this, but at this point, more funds are playing with WSB than against them. Funds are not some conglomerate that moves together; they hate each other as much as the public hates all of them.
Short interest in the past week has remained pretty steady. Some people view this as "the funds are doubling down, get 'em while they're bleeding". No, actually; they know what's most likely to happen, which is, everyone is going to forget about this in about three days. Gamestop's stock isn't good. These new shorts are not priced like "I think its going to go below $7"; they're priced like "I think its going to go below $200".
I think that's more the activist crowd that has joined over the past week. I have a hard time believing the original r/WSB people care more about making a political statement instead of money.
I don't know if they're right or wrong, but the fact remains there are people who are getting in to both make money as well as stick it to the man.
Whose bankruptcy? The WSB crowd are very vocal in their goals of bankrupting hedge funds who have a lot riding on forcing gamespot's stock price to plummet.
WSB wants a short squeeze. They got that. But, their theory is that it isn't over, and if they get the 10x+ returns in the coming weeks (I don't think they will, but lets say they do), then these funds are potentially looking at commitments that approach their AUM, and a nasty margin call. That's a real recipe for shutting down, and if that happens, there is no more short to squeeze. Everyone loses.
Someone is paying up.
On the other hand, if they go bankrupt, then their assets are used to compensate (as much as possible) to everyone they owe in cash - not (as previously expected) in that stock. So the expected huge future purchase of the shorted stocks never happens, and all the WSB people who are holding the stock get to keep it or sell it to each other, as all that compensation money does not flow to the market for GME stocks as it would be if the shorts were actually covered. The brokers would be liable, and they might have insurance that might be liable, but all that liability would be cash-denominated and (as far as I understand - if I'm mistaken, please correct me) would not obligate anyone to buy any GME stocks.
The second big difference is in the timing. The current price is driven by short-term expectations, a hope that somebody is going to (or would be forced to) buy large quantities of that stock soon. If one of the shorting hedge funds goes bankrupt, then any settlement for that will take many months, and that money won't influence the market for that time.
The remaining assets the firm has would be liquidated, those would be used to pay off debts, including those owed to the brokerage. I'm not 100% sure how this works, like, if the estate would purchase as many shares owed as possible, or if they would settle in cash with the brokerage, or what. But, regardless, that wouldn't happen until long after the epicenter of this black swan event.
If that's true wouldn't it incentivize the brokerages to help the funds weather the storm? Everyone can just wait it out till the stock crashes back and instead of sticking it to the man WSB just emptied their pockets into the mans accounts..
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.
As of mr. DFV, I'm sure he'd like to close his position at the current price. But my guess is that he prefers to hold for his reputation. Since he already guaranteed more money than he would ever need, it's not a bad decision. The other option is that he believes it's going climb even more, which is possible. But don't assume people hold for any reason other than making money. Once the squeeze is over it will fall like dominoes.
This is true for every market participant, the fun situation here is that the short squeezers know that what they are doing is risky, but they don't care, because it's fun to take risks, and anyways they have better chances than buying lottery or going to casino.
People said Tesla would crash when Tesla doubled a year ago from $200 to $400, and then to $900, etc., and then it did a 5-1 split, etc. Yes it did crash 20% in August, but from a price that was so high that it was still considerably higher than it was last year when the pundits were warning of a bubble.
Few foresaw the S&P 500 would surge 70% off the lows from Covid and make new highs later that year. The pundit consensus what that that it would be a bad, deep, long bear market.
Same for the post-Covid tech boom, which few foresaw too.
GME is not crashing as everyone is expected it to, even with Robinhood restricting buys. It is up huge today. I think this has a lot more to run, IMHO. More shorts will get squeezed out next week.
Like Tesla, GME may not really end badly at all and just keep going up and up.
I own some GME and not worried. Yeah, it is not that much of my total net worth, but I have found that heeding warnings of bubbles usually just means selling too soon.
If GME does crash, there will be no systemic risk or anything like that. It will be an isolated event.
The stock is worth what people think it’s worth. If people keep buying and holding, then it is worth what it is worth.
(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
What is the reasoning here? Are you under the impression GME wouldn't crash right alongside the market? This isn't BTC or gold we're talking about. It's just another stock.
The insurance pays up if they buy your share.
Do you have another idea how it could end?
Well ... yeah. Today it hasn't.
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.
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 there to anti-shorters makes more sense (as in 'I understand your position').
This occurred to me today. I see it as entirely plausible that one or more large funds willingly took the loss to exit their initial short position, and proceeded open new short positions at the current crazy prices. In fact, I would not be surprised if they haven't been doing that all this past week with iceberg orders[1] so to not tip their hands by driving the price that much higher while doing so. It doesn't matter if they were able to bankroll the new position themselves or had to take on additional leverage to do so. A huge profit could be made from trying to short from these new crazy prices, and I'd not be surprised if big money was willing to fund such an attempt.
With all the hype this past week, a bunch of people have jumped onto the bandwagon. I'd wager many are doing so out of an emotional excitement, without honestly considering the risk and whether they're truly willing to lose everything they put into this play. I'd also wager there are many who only think they're willing to lose everything they spend on $GME. But, when the share price starts going down, whether crashing from a panic selloff, or gently drifting downward as people start exiting their positions to lock in their profits, many will realize they're not as willing to lose everything as they thought.
I fully expect the funds to try to play chicken with those trying to short squeeze. I fully expect them to try every dirty trick in the book to kick off a panic selloff. I would not be surprised if new dirty tricks get invented. I would not be surprised if favors get called in from politicians and other persons of power to try to scare everyone out of holding, whether that's looking the other way while the big funds do something maybe-not-so-legal, or other shenanigans, like very public arrests of u/DeepFuckingValue and others on BS charges.
There's potentially very big money to be had here, and the big hedge funds everyone wants to screw over didn't get to their present riches by playing nice or fair.
2 years ago everyone was crazy about bitcoin(even close friends, family members, coworkers). Although it is 30k now, I don't hear it from a single person.
This is another social media experiment and won't repeat this successfully in the future.
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 packages, get into empire building. Maybe they'll buy a movie studio or a Vegas casino. That's a constant supply of new stock that will keep pushing down the price. It's the same way that AOL used their stock to buy Time Warner during the Internet bubble.
AMC already took advantage of the meme madness by selling a huge chunk of shares to lock in some cash. That's why AMC didn't moon like GME. But give it a week or two, and GME's board will pretty much be forced to do the same thing.
So any large institutions (ex: pension funds) holding the stock are making bank lending it out.
Good. Let it crash and burn. The stock market has never done anything for me. 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.
My only wish is that this time around the stock markets will stay down after they burn, and be remembered in history as the idiotic idea that it truly is.
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 to the ground?
I can see the aversion to HF / VC. But you can't use that broad brush to paint all investment capital as predatory.
First, I can infer that your aversion to capital is due to vulture funds that have been known to extract money from perfect viable companies via buyouts (i.e. thinking "barbarians at the gates" type investments) for example.
However, the solution is not just to put everything in a savings account and disregard everything else is predatory.
How did we get here ? How did these funds come to exist ? Why are savers getting hurt and vultures making bank ? That's what you should really be questioning.
I think a much better argument can be made in that you would much rather increase interest rates, and stop the profilgate money lending by the fed, so that extremely cheap capital would not be available for these vultures to exist.
How do you back such scenario by direct action ? I don't know. However, i know you are not contributing to utopia by wasting your investment capital by letting it slowly burn in a savings account.
The same reason Parler got taken down for inciting violence without proper moderation, I'm seeing a lot of baseless claims from literally millions of people who do not understand how large/complex the financial systems at play are.
I'm kind of worried Reddit could shut down r/wsb because of the amount of influential misinformation being spread.
Do you have any proof for that? If not then arent you the one who is spreading misinformation?
Also kn0thing endorsed WSB yesterday. He's no longer officially affiliated with reddit, but it still says something.
[0] https://www.reddit.com/r/wallstreetbets/comments/l7yc12/wsb_...
[1] https://www.businessinsider.com/gamestop-michael-burry-big-s...
"Well as a longer-term investor I have the benefit of heavily discounting daily moves. I care much more about the longer-term charts, and these have been fairly constructive for months now. Even today, after the typical quarterly sell-off, the longer-term chart still looks decent so there’s been nothing to panic over. Let’s see what the price does over the next few weeks. Of course charts are only a minor part of the equation in my opinion. The fundamentals are much more important in a situation like this."
And called it for Jan 2021: https://www.reddit.com/r/wallstreetbets/comments/e8wqvs/gme_...
And his Youtube channel: https://www.youtube.com/channel/UC0patpmwYbhcEUap0bTX3JQ
Casts a slightly different light on the whole narrative about the uprising of retail investors.
I appreciate that. Not enough to give WSJ $20 (!!!) a month, but I do appreciate it.
Talk about "diamond hands".
https://www.reddit.com/r/wallstreetbets/comments/l846a1/gme_...
I'm taking suggestions.
I don't know if there is anything cheap available on the options market these days.
I don't think GME is going to stay at this price for very long, but on the other hand the retails trader are only ~25% of the volume (Matt Levine's latest column) and on balance selling, so I think the stock price is driven by big players, and "what do they know that I don't?"
I get it, /DFV started a short squeeze and got rich, that is great for him. I don't support naked shorting, it should probably be illegal (if it is not already) and it looks that was part of the reason this happened. Everyone has been suspecting for a while (especially here) that a lot of volatility in stocks like TSLA etc was due to Robinhood.
As of 5:33 EST, I'm on CNN right now and the main headline "Inside the Reddit army that's crushing Wall Street" (And the reddit army isnt crushing Wall Street, it's crushing a few hedge funds that happened to hold short positions in a few stocks. ) , so now a lot portion of America (and the world) is paying attention.
Hedge funds blow up all the time. Enron blew up, basically all of the Investment Banks blew up in 2008, LTCM blew up. Why is this such a big deal?
- An unprecedented and uncoordinated but sophisticated financial engineering play driven by an internet community.
- There is a loose analogy to the terrorist attack on the Capitol, an internet community organizing to destroy existing institutions.
- The ongoing class warfare that was highlighted by Occupy Wallstreet, 2008 crash and bailout.
- The frustration with the completely disjoint experience of the pandemic that the average American has had in contrast to the record highs of the stock market.
- America loves an underdog story.
It has something for everyone. But if you ignore all other context of the story and have tunnel vision on just /DFV gains then it's less interesting I guess.
Life is strange. It’s a Cinderella story if you look at it from the pure narrative perspective.
If anyone ever makes a documentary/movie about it, it should be a dark comedy - money is just depressingly funny. The things we justify and do for it.
Personally I'm looking forward to reading the Michael Lewis book.
A lot of people wish they struck it rich, just like him. Money (to some degree) buys happiness. Gets you out of a job you don't like. Gets you more time with your family, less time doing stuff you don't like (like working).
If the poor can "eat the rich" and "catch them with their shorts down" in a stock trade that literally millions of others are pouring into (check how many subscribers r/wsb has gained past 7 days), it's literal herd mentality.
Sure, if people are taking aggressive positions. I'm not sure his initial YOLO was that insane, it had a fair chance of being OK. (In this unique case, the massive naked short position turned out to be the insane play.)
But it's approximately a zero-sum game, so it's not irrational in general to be betting on options.
Now, the really smart money is buying equal weight into TSLA on this dip!
You haven't noticed that the big three indexes are DOWN ~2% today? They were down 2% when this first took off. [If you want to split hairs...go for it but...the correlation is very strong, news cycles are soaking it up and the White House talks about monitoring the situation. This is not a light matter]
This is bigger than just a few firms. The added limitations to buying various stocks. The heavy-handed nature is making it clear, let alone the media frenzy.
WSB broke their models which in turn is crippling the 'economy'. If you don't think so, please, advocate for the free citizens to buy as much as they want because the hype isn't subsiding, it's only growing.
Great, I love the sarcasm! Can you please help push RH and other brokers to allow the unbridled buying of the current stocks being restricted? Then we can really put the theories to the test.
To be fair Robinhood also had to get extra funding to cover its liquidity issues.
IB CEO also said they had to stop GME buying or else it might take down the system.
Speculation is that it's not your "average" hedge fund bust, but that brokers accepted too much shorts/options without securing shares and some of them might go out as well trying to find shares to cover calls
You sure about that? TSLA has a market cap of 750b. GME, now, is at 20b. Before this insanity it was a fraction of that.
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.
2. People could still buy and sell.
3. I'd classify 2008 as a big deal as well.
I don't understand exactly how the math works out there to be able to evaluate if it was an extra good deal or not, but I find it credible that institutional investors jumping on the Reddit hype would be necessary in ordet to sustain the kind of momentum we are seeing.
Edit - or as people on Twitter put it:
any story that doesn't say how, past the retail ignition, the rocket ship was mostly intra-fast money warfare, simply isn't telling the truth
https://twitter.com/zatapatique/status/1354904995901136896?s...
and its because the media likes the narrative and people are running with it. david vs goliath etc. ignoring there are goliaths who were long on gamestop and pensioners who had their money in the hedge fund.
Right, and each of those events is news that you can identify it by saying Enron, or 2008, or LTCM. It isn't just about DFV. It's about all the other little guys who have made hundreds of thousands or millions on this.
A way to assess what any stock is valued is to take the DCF, but since it's nearly black box to the shareholder for growth companies (no dividend), treat any interest payments on outstanding short float as part of the DCF. That means there's a growth directly associated with capitalization. so it makes sense that the capitalization becomes untethered with the business. Google’s ROE is about 12%, so 6-7% on the cap isnt great, but it’s not nothing either. The other side is if the short interest decreases that would collapse the cap sharply, but the longer the shorts wait, the less lucrative and difficult it could get.
Edit. Cost to borrow is at 50%! https://www.reddit.com/r/wallstreetbets/comments/l88i21/s3_s...
Can they cash out at $500 or $1000?
Can they offer additional shares in the market, after clearing it with the SEC?
Then, can they take that windfall money, and actually reinvest it into R&D, and build their own GameStation 1 video game system? In order to justify their new lofty valuation.
They issued 50 million new shares at-the-market last week. They also had a $600M loan that was convertible and converted into stock. As a result, they’re sitting on nearly a billion new dollars, which should help them ride the pandemic out.
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 calls! Get those tendies!” And then I hope the clients were like “what” and MassMutual fired him and he just went and did the thing. "
https://www.bloomberg.com/opinion/articles/2021-01-29/reddit...
There are quite a few genuinely good people in finance so don't be surprised to find good people doing good things who also work in finance but finance also attracts a lot of people who are amoral at best. I shake my head at the memory of one of the partners screaming at someone over the phone, "This isn't even illegal! How is it immoral!?"
If your prop shop blowing up means everyone who works there is now penniless, you tend to get much better results.
Sounds like a good place to work tbh.
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.
[EDIT: ok, they did talk to him, but this still isn't what most publications would call "an interview" ]
Nothing like I would expect for "an interview with...", which would normally be dominated by the subject's own words.
This whole situation breaks a ton of fundamental assumptions about how markets work and will change hedging strategies for a lot of investors moving forward. Yes, we know there are hedge funds on both sides of this equation (Blackrock owns 12% of Gamestop, Burry made a ton and smartly got out earlier in the week), it doesn't change anything. The internet is already searching for more securities to manipulate. This will accelerate adoption of the DeFi space. Scaramucci called it "the French Revolution of Finance."
Instead of being negative, look to see how you can learn and profit from this.
A very risky play from a hedge fund has resulted in people who don't know what they're doing convincing more people who don't know what they're doing that there is a clear ally (other retail investors who are getting back at The Man) and a clear enemy (evil hedge funds that have robbed the American people), and that what they're doing is some sort of justice and not just an extreme market correction. They've attached emotions to these trades, and when the time inevitably comes that they have to become The Man to stand with The Man against The Man, a very small percentage will realize what needs to be done to trade another day, while the rest are going to learn how little say they actually had in this incident. WSB (or at least what it was before this) has had a lot of laughs at the expense of the latter group -- "it literally can't go tits up!" is trotted out whenever somebody finds out that they're not in control.
Active retail investment requires a fatalistic view of the market. This is hard to swallow when you think of going short as "bad" or squeezing out a hedge fund as "good."
Great, that was one of their goals: To make them think about if shorting 140% is a good thing or not.
Why would it do that?
I think the most likely outcome is more regulations from the government, and more rules from brokerages about what most of their customers are allowed to do.
To push the analogy: When does Robespierre get his?
What stops somebody from purchasing aged reddit accounts and then pumping up, upvoting their own threads?
Edit: hints = look at porn subreddits, /r/entrepreneur, stock subreddits. By the way, some of the moderators are making a killing too (by promoting their "own" people)
(Yes, this is a thing, and there is significant $$$ actually invested into this)
My question is what stops somebody pulling off the same trick on WSB and how do we know? How can we know? Does the SEC know how to tell?
> So if you buy stock with the purpose of pushing the price up so that other people will buy it, that’s market manipulation. If you buy stock hoping that the price will go up because other people buy it, that’s not market manipulation; that’s just normal. Those things are not so different. There is a “traditional four-part test for manipulation that has developed in case law”:
(1) That the accused had the ability to influence market prices; (2) that the accused specifically intended to create or effect a price or price trend that does not reflect legitimate forces of supply and demand; (3) that artificial prices existed; and (4) that the accused caused the artificial prices.I think it is already happening. Search Reddit for Tootsie roll. One 3 yr old Reddit acct with no posts makes a flurry of posts about TR and it jumps 30% in 2 days.
So much for "poor people fighting back" LOL.
However, that 5%< of finance is just objectively morally bankrupt compared to the rest - because its exclusive, delivers no value to society, yet bears a significant influence to everyone else.
So sure, it's not really "poor vs wealthy" it's more "good vs evil".