5 ms·
Markets can stay irrational longer than you can stay solvent -- Keynes.
by phoe-krk 6y ago
Markets can stay irrational longer than you can stay solvent -- Keynes.
- RivieraKid 6y agoYeah, I know... But it's annoying to see money getting transfered from people who are good at valuation to people who're clueless.
- thatswrong0 6y ago> people who are good at valuation I wouldn't call people who short 140% of available shares good at anything
- stephenhuey 6y agoGreedy gamblers who assume everyone else is incapable of calling their bluff?
- _jal 6y agoAnd here I've been told that the market price is the price, because that's the price, and don't get emotional about the market. I guess that only applies when the 'right' people are involved?
- johnhartigun 6y agoSee, this is what I mean by clueless. Price and valuation are completely different concepts. An asset that will never generate any cash has a valuation of zero, but its market price could be anything.
- _jal 6y agoSee, this is what I mean by how econ 101 reasoning makes people weirdly arrogant and impossible to talk to. Parent is so quick to try to score a point arguing definitions that they entirely missed the point.
- johnhartigun 6y agoI'd be happy to discuss substance but your comment brings up no actual points, only ad hominem.
- phoe-krk 6y agoRight now, money isn't getting transferred from people who are good at valuation to people who're clueless. I'd say it's quite the opposite.
- johnhartigun 6y agoWell any reasonable GameStop valuation is at least an order of magnitude below current market price.
- fileeditview 6y agoThe value currently is not in GameStop itself but in the need for the short sellers to buy back the shares. So there is value in buying & holding. How much is still open.. The situation is pretty bonkers but I hope in the end that the hedge funds have learned a lesson.
- phoe-krk 6y agoThe whole affair isn't, and wasn't, about GameStop's valuation, or even about Gamestop as a company whatsoever. It's about stock market mechanics and the ability to leverage them to make a profit.
- josephorjoe 6y agonot to pile on here, but what is happening is money is getting transferred from one gambler to another
- tylerjaywood 6y agoI press f on the worlds smallest keyboard to pay respect to the billionaires betting they could grind the company out of existence through aggressive shorting who lost money on this.
- Bakary 6y agoThe real conclusion would be to realize that the people "good at valuation" are glorified gamblers and not on another plane of existence from the rest. In fact, it's tautological to state that if they got burned, then they are not that good. Or perhaps the entire thing is pareidolic nonsense.
- RivieraKid 6y agoDisagree. The short-sellers are correct about GameStop's valuation. In a liquid and competitive market they would profit and help the price move into the direction of correct valuation.
- Bakary 6y agoIsn't that essentially magical thinking? The market is what it is, and their strategy failed. It doesn't really make sense to blame the market when the scheme fails and presumably celebrate the individual or group's purported brilliance when the scheme works. What actually happens is the ultimate arbiter of who profits and who doesn't, not the hypothetical fairer environment that "should" have existed to reward certain strategies. It's similar to blaming the roulette wheel when the gambler fails and praising the gambler when they succeed.
- zeusk 6y agoWell, the market thought otherwise and market is always right. They just forgot that efficient market hypothesis is just that, a hypothesis. Real world markets behave differently thanks to finite resources and secondary markets (essentially leveraged derivatives caused 2008 crash and I believe they'll cause another before regulators wake up from their sleep).