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I find it ironic, the point where I stopped going to /r/wallstreetbets is when it got popular. Last year this time. It's sad, it used to be a nice crowd of pe

I find it ironic, the point where I stopped going to /r/wallstreetbets is when it got popular. Last year this time. It's sad, it used to be a nice crowd of people, but overall, I also stopped going to Reddit. Everything seems less authentic and more forced idea of moderation/content. -- Everyone says index fund, and they're okay but it's a big thing on Passive Investing, I really enjoy Michael Burry 's quip about passive investing being the next big fall: https://www.bloomberg.com/news/articles/2019-09-04/michael-burry-explains-why-index-funds-are-like-subprime-cdos https://www.bloomberg.com/news/articles/2019-09-04/michael-b... And seeing it repeated over and over again on social media/reddit, where people are not experts, fiduciaries or can do simple functions in Excel make me wonder what else would be in the same regard.

IAmGraydon 6y ago
Wallstreetbets has always been this way. It’s not an investing sub. It’s a gambling sub. If you want to get more serious about your gambling, there’s r/options. If you want to actually invest, there are subs for buying and selling stocks. I do think it’s hilarious how much credit WSB gets in the press. A very few have made millions. The rest have collectively lost countless millions. If sophisticated firms are now analyzing the actions of WSB members, they just became even more the fish in a barrel.
- yla92 6y ago
  I would be interested to know which are the subreddits for actual investing.
  - ericmay 6y ago
    There are a few you can check out, r/investing, options, stocks, etc. In the r/investing sub you can find links to others as well.
    - CamelCaseName 6y ago
      r/securityanalysis
- deleted 6y ago
  [deleted]
- tumblerz 6y ago
  All correct. Referring to WSB as (having ever been) "nice people" also seems an odd way to view the sub. The entire fun of WSB has always been the 4chan humor coupled with the gravity of real money. I doubt that pro traders are buying simple calls and puts like WSB. But selling them those options when groupthink takes over might be profitable, indeed.
  - IAmGraydon 6y ago
    > I doubt that pro traders are buying simple calls and puts like WSB. But selling them those options when groupthink takes over might be profitable, indeed. Most pro traders aren't really selling options either unless they're a market makers, in which case they're hedging with stock so as to remain delta neutral. Pro traders use options to reduce risk via hedging. It's meant to be an insurance policy to protect holdings in the underlying. Buy $10M of ABC stock and insure it with $100,000 of ABC put contracts. Of course, it was quickly turned into a high risk/high leverage speculative vehicle by gamblers.
- sokoloff 6y ago
  I assume that pros reading WSB are reading it to better cater to and/or take advantage of that crowd rather than to “invest” alongside. It’s akin to trying to get seated at the poker table with a terrible player. It’s not because you want to emulate their play, but rather you want to be in the game with them.
  - IAmGraydon 6y ago
    Exactly my point with the fish-in-a-barrel comment. It's kind of sad really, as many of them have gambling addictions and serious financial problems.
throw0101a 6y ago
> Everyone says index fund, and they're okay but it's a big thing on Passive Investing, I really enjoy Michael Burry 's quip about passive investing being the next big fall: Michael Burry is wrong. Going with index funds is no more and no less than investing in the entire market, so unless the entire stock market fails (i.e., every publicly traded company collapses, which would be akin to the economy collapsing), you'll be fine. And even if there's a major rout, if you put in a little every month via continuous, automatic investing (sometimes mistakenly labelled "dollar cost averaging"), you'll probably do well over the long term. Someone putting a little in at a time (which most of us do monthly for retirement) would have even done pretty well through the 1930s Great Depression (notwithstanding high unemployment, etc) to come out on the other end 25+ years later. If you believe the economy will completely collapse and not ever recover you're also likely to be someone who has an underground bunker.
- wgerard 6y ago
  > Going with index funds is no more and no less than investing in the entire market I don't think that's entirely true. When most people talk about investing in index funds they're largely talking about funds like eg. $SPY, not total market funds like $VTI. There's certainly a case to be made that increasing passive investing in certain indices (like $SPY) causes companies within the index to be overvalued simply because of the nature of passive investing. You often see companies getting a big boost in their share price simply for joining the S&P, even though reason would dictate that there's nothing fundamentally different about the company. The usual counterargument to this is that we should reach an equilibrium where active managers will then be free to invest in companies that are undervalued simply because they're not a part of an index, but of course that also is making a number of assumptions. Without reading the article too deeply I'm not sure if that's Burry's specific criticism, but it's one that's not uncommon and certainly isn't completely outlandish.
  - throw0101a 6y ago
    > When most people talk about investing in index funds they're largely talking about funds like eg. $SPY, not total market funds like $VTI. You're not wrong, but for most people, most of the time, this quibble is not worth getting into. Too many people are not saving anything, either because they (feel they) don't have enough income, are too scared of headlines, or just are not financially literate enough. If these people manage to get something (anything) going, even if it is into a 'non-optimal' S&P 500 fund, that's getting them from 0 to 80. I would be happy with more people doing 'only' that. If you want to try to try to get them from 80 to 100, be my guest: but IMHO the perfect is the enemy of the good in this case. > The usual counterargument to this is that we should reach an equilibrium where active managers will then be free to invest in companies that are undervalued simply because they're not a part of an index, but of course that also is making a number of assumptions. There will always people who think they can do better, and some of those people will be right (at least some of the time): * https://en.wikipedia.org/wiki/Grossman-Stiglitz_Paradox https://en.wikipedia.org/wiki/Grossman-Stiglitz_Paradox
CamelCaseName 6y ago
> Last year this time WSB really hit the primetime in February/March this year. https://i.imgur.com/oRxJe4F.png https://i.imgur.com/oRxJe4F.png
jackcosgrove 6y ago
Michael Burry made his name by doing a deep dive on mortgage backed securities. He knew what he was talking about because he crunched the numbers before he attracted attention. How that experience translates into macroeconomic forecasting, such as when he said farmland was the next big play, or now passive investing is bad, I don't know. Has he crunched the numbers, or is he using some theoretical framework to try to predict macroeconomic events? In any case his words attract a lot of attention now, even when he may be speaking outside his areas of expertise.

IAmGraydon 6y ago

Wallstreetbets has always been this way. It’s not an investing sub. It’s a gambling sub. If you want to get more serious about your gambling, there’s r/options. If you want to actually invest, there are subs for buying and selling stocks. I do think it’s hilarious how much credit WSB gets in the press. A very few have made millions. The rest have collectively lost countless millions. If sophisticated firms are now analyzing the actions of WSB members, they just became even more the fish in a barrel.

yla92 6y ago
I would be interested to know which are the subreddits for actual investing.
- ericmay 6y ago
  There are a few you can check out, r/investing, options, stocks, etc. In the r/investing sub you can find links to others as well.
  - CamelCaseName 6y ago
    r/securityanalysis
deleted 6y ago
[deleted]
tumblerz 6y ago
All correct. Referring to WSB as (having ever been) "nice people" also seems an odd way to view the sub. The entire fun of WSB has always been the 4chan humor coupled with the gravity of real money. I doubt that pro traders are buying simple calls and puts like WSB. But selling them those options when groupthink takes over might be profitable, indeed.
- IAmGraydon 6y ago
  > I doubt that pro traders are buying simple calls and puts like WSB. But selling them those options when groupthink takes over might be profitable, indeed. Most pro traders aren't really selling options either unless they're a market makers, in which case they're hedging with stock so as to remain delta neutral. Pro traders use options to reduce risk via hedging. It's meant to be an insurance policy to protect holdings in the underlying. Buy $10M of ABC stock and insure it with $100,000 of ABC put contracts. Of course, it was quickly turned into a high risk/high leverage speculative vehicle by gamblers.
sokoloff 6y ago
I assume that pros reading WSB are reading it to better cater to and/or take advantage of that crowd rather than to “invest” alongside. It’s akin to trying to get seated at the poker table with a terrible player. It’s not because you want to emulate their play, but rather you want to be in the game with them.
- IAmGraydon 6y ago
  Exactly my point with the fish-in-a-barrel comment. It's kind of sad really, as many of them have gambling addictions and serious financial problems.

throw0101a 6y ago

> Everyone says index fund, and they're okay but it's a big thing on Passive Investing, I really enjoy Michael Burry 's quip about passive investing being the next big fall: Michael Burry is wrong. Going with index funds is no more and no less than investing in the entire market, so unless the entire stock market fails (i.e., every publicly traded company collapses, which would be akin to the economy collapsing), you'll be fine. And even if there's a major rout, if you put in a little every month via continuous, automatic investing (sometimes mistakenly labelled "dollar cost averaging"), you'll probably do well over the long term. Someone putting a little in at a time (which most of us do monthly for retirement) would have even done pretty well through the 1930s Great Depression (notwithstanding high unemployment, etc) to come out on the other end 25+ years later. If you believe the economy will completely collapse and not ever recover you're also likely to be someone who has an underground bunker.

wgerard 6y ago
> Going with index funds is no more and no less than investing in the entire market I don't think that's entirely true. When most people talk about investing in index funds they're largely talking about funds like eg. $SPY, not total market funds like $VTI. There's certainly a case to be made that increasing passive investing in certain indices (like $SPY) causes companies within the index to be overvalued simply because of the nature of passive investing. You often see companies getting a big boost in their share price simply for joining the S&P, even though reason would dictate that there's nothing fundamentally different about the company. The usual counterargument to this is that we should reach an equilibrium where active managers will then be free to invest in companies that are undervalued simply because they're not a part of an index, but of course that also is making a number of assumptions. Without reading the article too deeply I'm not sure if that's Burry's specific criticism, but it's one that's not uncommon and certainly isn't completely outlandish.
- throw0101a 6y ago
  > When most people talk about investing in index funds they're largely talking about funds like eg. $SPY, not total market funds like $VTI. You're not wrong, but for most people, most of the time, this quibble is not worth getting into. Too many people are not saving anything, either because they (feel they) don't have enough income, are too scared of headlines, or just are not financially literate enough. If these people manage to get something (anything) going, even if it is into a 'non-optimal' S&P 500 fund, that's getting them from 0 to 80. I would be happy with more people doing 'only' that. If you want to try to try to get them from 80 to 100, be my guest: but IMHO the perfect is the enemy of the good in this case. > The usual counterargument to this is that we should reach an equilibrium where active managers will then be free to invest in companies that are undervalued simply because they're not a part of an index, but of course that also is making a number of assumptions. There will always people who think they can do better, and some of those people will be right (at least some of the time): * https://en.wikipedia.org/wiki/Grossman-Stiglitz_Paradox https://en.wikipedia.org/wiki/Grossman-Stiglitz_Paradox

CamelCaseName 6y ago

> Last year this time WSB really hit the primetime in February/March this year. https://i.imgur.com/oRxJe4F.png https://i.imgur.com/oRxJe4F.png

jackcosgrove 6y ago

Michael Burry made his name by doing a deep dive on mortgage backed securities. He knew what he was talking about because he crunched the numbers before he attracted attention. How that experience translates into macroeconomic forecasting, such as when he said farmland was the next big play, or now passive investing is bad, I don't know. Has he crunched the numbers, or is he using some theoretical framework to try to predict macroeconomic events? In any case his words attract a lot of attention now, even when he may be speaking outside his areas of expertise.