4 ms·

Here's a thing I don't understand: will we ever leave the meme stock bubble? Most stockmarket gains have been happening with companies with no dividends and no

Here's a thing I don't understand: will we ever leave the meme stock bubble? Most stockmarket gains have been happening with companies with no dividends and no executive control for at least a decade. Other than very few exceptions like Apple that one time large companies aren't buying back stock either. Why should the price of individual stock still have some correlation to the company's profit?

sombremesa 6y ago
This is an interesting question to ask, regardless of GME. The Robinhood app may have caused an 'eternal September' for the market. The difference is that people don't have an infinite appetite for losing money, and people are on aggregate losing money as one does when trading with a short term mindset. So I would say that we will eventually leave the meme stock bubble, but it's anyone's guess as to when.
- bagacrap 6y ago
  I think by this logic, casinos wouldn't exist.
  - SXX 6y ago
    Casinos are highly regulated business with games having constant and verified return rate. E.g if you make 1,000,000 of $1 bets on slots in registered and regulated online casino then you'll actually retain 95-98% of the money. People who are addicted to gambling and risk aren't there to bet $1 so they lose everything much faster. It's can be different for offline gambling where people go to play once in a month, but online companies related to gambling work hard to avoid burning people out too fast. After all they want sustainable income which come from audience that trust them. Stock market on ther side doesn't have anything like this and it's can make people go broke much faster than casinos do.
gegtik 6y ago
This has been the conclusion with real estate - fundamentals to outside economy has been permanently severed in many markets. Why not other assets?
aabhay 6y ago
The only solution is a crop of AI- guided systems that trade with high frequency to get in front of this information. That will likely smooth out some of this rockiness, and give way to entirely information driven markets (no fundamentals). This would be more akin to a kind of celebrity based market.
- overcast 6y ago
  They are already front running these trades. Robinhood is free for a reason.

sombremesa 6y ago

This is an interesting question to ask, regardless of GME. The Robinhood app may have caused an 'eternal September' for the market. The difference is that people don't have an infinite appetite for losing money, and people are on aggregate losing money as one does when trading with a short term mindset. So I would say that we will eventually leave the meme stock bubble, but it's anyone's guess as to when.

bagacrap 6y ago
I think by this logic, casinos wouldn't exist.
- SXX 6y ago
  Casinos are highly regulated business with games having constant and verified return rate. E.g if you make 1,000,000 of $1 bets on slots in registered and regulated online casino then you'll actually retain 95-98% of the money. People who are addicted to gambling and risk aren't there to bet $1 so they lose everything much faster. It's can be different for offline gambling where people go to play once in a month, but online companies related to gambling work hard to avoid burning people out too fast. After all they want sustainable income which come from audience that trust them. Stock market on ther side doesn't have anything like this and it's can make people go broke much faster than casinos do.

gegtik 6y ago

This has been the conclusion with real estate - fundamentals to outside economy has been permanently severed in many markets. Why not other assets?

aabhay 6y ago

The only solution is a crop of AI- guided systems that trade with high frequency to get in front of this information. That will likely smooth out some of this rockiness, and give way to entirely information driven markets (no fundamentals). This would be more akin to a kind of celebrity based market.

overcast 6y ago
They are already front running these trades. Robinhood is free for a reason.