4 ms·

The have parted ways because the Fed is buying lots more than just treasuries. There is so much money desperate for returns because interest rates are so low. T

The have parted ways because the Fed is buying lots more than just treasuries. There is so much money desperate for returns because interest rates are so low. That is why we have such inflated equities right now. It is a mental game: if people don't know the economy is awful, maybe they won't change their behavior and maybe it will actually get better before they realize it.

beamatronic 6y ago
In other words, fake it till you make it
treis 6y ago
The Fed buying bonds isn't pushing Tesla to the 14th largest market cap. It's currently trading $200 per share higher than any analyst recommendation that the WSJ or Yahoo has. Not to mention Hertz, a bankrupt company, has a market cap of 200 million. Something very unusual is going on.
- thisisnico 6y ago
  They made it easy for the uneducated investor to invest in companies that see the spotlight on the news. You can invest in minutes and for free now, right from your phone. These people don't do any research on the company. They see news stories on the company all the time, and news stories that the stock went up XX% So when you have people casually buying stocks I feel like they get inflated past the point that makes any sense, and thus become incredibly overvalued. Seasoned investors would see this and stay far, far away from these businesses.
  - abvdasker 6y ago
    Is there recent data on how much investment originates from retail investors? Are there really enough retail investors on Robinhood and elsewhere to push valuations up this high?
    - thisisnico 6y ago
      That's a good question. My statement was opinion and speculation, but it would be interesting to see this backed up by data, maybe someone here can find data on percentage of a stock like TSLA for example is held by retail investors?
    - mason55 6y ago
      You can see the % of shares held by institutions https://finance.yahoo.com/quote/TSLA/key-statistics?p=TSLA https://finance.yahoo.com/quote/TSLA/key-statistics?p=TSLA Compare Tesla at 57.93% to Ford at 55.06%
    - devalgo 6y ago
      I don't have the link but I think people linked Hertz' valuation pop after it's bankruptcy almost exclusively on Robinhood type traders.
- everybodyknows 6y ago
  9.5% of float shorted, up 13% mid-day. Short squeeze, methinks. https://www.marketwatch.com/investing/stock/tsla https://www.marketwatch.com/investing/stock/tsla
  - jansan 6y ago
    Here is the Volkswagen stock chart from October 2008: https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F1e612401-e2f9-4260-aa53-8f39d4fa4b4c_FINAL.png?source=Alphaville https://www.ft.com/__origami/service/image/v2/images/raw/htt...
  - david927 6y ago
    Of course it's a short squeeze
  - everybodyknows 6y ago
    ... and, two hours later, back down to +1%, still mid-day.
invalidOrTaken 6y ago
"But though we had plenty of money / There was nothing our money could buy..." --- Rudyard Kipling, "The Gods Of The Copybook Headings"

beamatronic 6y ago

In other words, fake it till you make it

treis 6y ago

The Fed buying bonds isn't pushing Tesla to the 14th largest market cap. It's currently trading $200 per share higher than any analyst recommendation that the WSJ or Yahoo has. Not to mention Hertz, a bankrupt company, has a market cap of 200 million. Something very unusual is going on.

thisisnico 6y ago
They made it easy for the uneducated investor to invest in companies that see the spotlight on the news. You can invest in minutes and for free now, right from your phone. These people don't do any research on the company. They see news stories on the company all the time, and news stories that the stock went up XX% So when you have people casually buying stocks I feel like they get inflated past the point that makes any sense, and thus become incredibly overvalued. Seasoned investors would see this and stay far, far away from these businesses.
- abvdasker 6y ago
  Is there recent data on how much investment originates from retail investors? Are there really enough retail investors on Robinhood and elsewhere to push valuations up this high?
  - thisisnico 6y ago
    That's a good question. My statement was opinion and speculation, but it would be interesting to see this backed up by data, maybe someone here can find data on percentage of a stock like TSLA for example is held by retail investors?
  - mason55 6y ago
    You can see the % of shares held by institutions https://finance.yahoo.com/quote/TSLA/key-statistics?p=TSLA https://finance.yahoo.com/quote/TSLA/key-statistics?p=TSLA Compare Tesla at 57.93% to Ford at 55.06%
  - devalgo 6y ago
    I don't have the link but I think people linked Hertz' valuation pop after it's bankruptcy almost exclusively on Robinhood type traders.
everybodyknows 6y ago
9.5% of float shorted, up 13% mid-day. Short squeeze, methinks. https://www.marketwatch.com/investing/stock/tsla https://www.marketwatch.com/investing/stock/tsla
- jansan 6y ago
  Here is the Volkswagen stock chart from October 2008: https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F1e612401-e2f9-4260-aa53-8f39d4fa4b4c_FINAL.png?source=Alphaville https://www.ft.com/__origami/service/image/v2/images/raw/htt...
- david927 6y ago
  Of course it's a short squeeze
- everybodyknows 6y ago
  ... and, two hours later, back down to +1%, still mid-day.

invalidOrTaken 6y ago

"But though we had plenty of money / There was nothing our money could buy..." --- Rudyard Kipling, "The Gods Of The Copybook Headings"