2 ms·

IMHO nothing you said contradicts with anything I said. People are free to buy or not-buy any stock, and to sell or not-sell any stock that they already hold.

IMHO nothing you said contradicts with anything I said. People are free to buy or not-buy any stock, and to sell or not-sell any stock that they already hold. Everyone trading is an adult and is free to do it (notwithstanding things like insider trading, etc). There is nothing illegal in the activities that I've seen: just people/institutions trading and holding stocks in an open market. Some of those people are/will be making money through these actions and some are/will be losing money. As Nick Maggiulli recently posted (on a somewhat unrelated topic): > If it wasn’t obvious before, it bears repeating now—some people are going to beat you at investing. Some of them will be dumber than you. Some will be less knowledgable. Some will even be completely wrong about the future. But they will beat you just the same. There is no great arbiter of justice in the investment world. There is no cosmic force that ensures that only the knowledgable make money. If there were, then I would be a far richer man today. * https://ofdollarsanddata.com/let-them-vote/ https://ofdollarsanddata.com/let-them-vote/ As someone who rides a motorcycle, I think it's stupid not to wear helmet, gloves, etc., and yet in Michigan it's legal to ride without a helmet. IMHO it's dumb, but many people do it and ¯\_(ツ)_/¯ Currently some people think GME is worth US$347.51 per share and are willing to pay for it. ¯\_(ツ)_/¯ It's their money and they can do whatever they want with it. I invest in index and bond funds (80/20), but if someone wants to YOLO on this: not my circus, not my monkeys.

PaulDavisThe1st 6y ago
> There is nothing illegal in the activities that I've seen: just people/institutions trading and holding stocks in an open market. Not to contradict you, but just a reminder that short selling is based on something significantly different than "trading and holding stocks". The ability to promise to buy/sell stocks in the future at a given price has become so accepted as an ordinary feature of stock trading that we generally cease to notice how revolutionary of a concept it actually is. It's hard to see any rationale for prohibiting such arrangements - they are entirely consensual, and appear to have no additional impact on things that instantaneous buy/sell orders wouldn't also have. But this is an illusion. The ability to go short/long on a stock is completely different from the ability to buy/sell it, despite it being based on all the same mechanisms. It's a truly radical concept that has slipped under our radar because it could be described without any new concepts or terms.
- throw0101a 6y ago
  For the record, shorting stocks has been around for as long as capital markets have been around (1609): * https://en.wikipedia.org/wiki/Short_(finance)#History https://en.wikipedia.org/wiki/Short_(finance)#History Bond markets started early than that: * https://en.wikipedia.org/wiki/Stock_market#History https://en.wikipedia.org/wiki/Stock_market#History The judgement of the value of this I will leave to others to decide.
  - PaulDavisThe1st 6y ago
    Sorry, I did not mean to imply anything about temporality (i.e. that short selling was "new" in terms of starting significantly after stock trading). My point was almost consonant with yours - it's almost as old as stock trading, but nobody realized how fundamentally different the concept is. They didn't realize it in 1609, and they certainly don't recognize it now. Most naive conceptions of how stock markets work would never allow for these sorts of contracts. The fact that they've (nearly) always been a part of actual stock markets just points to the same sort of gaps between the actual operation of the financial services industry and how most people think things ought to be that the current GME gyrations are (according to some) also pointing at.
- plauribre 6y ago
  Short selling is not revolutionary at all. Options and short selling are perfectly normal market instruments that have far ranging utility, including both hedging securities and insurance on tangible goods (e.g. a pork farmer buying puts on pork to ensure he can sell his product at a specific price). Neither is it "radical" in any type of market. It just means selling something you don't actually have yet (something you're "short"). Think of a middleman who sources classic cars. He contractually agrees to sell a 1991 Ferrari for $60k. He doesn't yet own the vehicle, but knows he can source them for $50k. Unfortunately for him, a recently popular meme has gassed the price of Ferraris, and he now has to pay $70k for the car. He's still obligated to sell at $60k, so he begrudgingly takes delivery and loses $10k, having "sold short" the car. Is he revolutionary or radical?
  - 6y ago
Galanwe 6y ago
> There is nothing illegal in the activities that I've seen: just people/institutions trading and holding stocks in an open market. This is a bit of an oversimplification. Market manipulation for instance is forbidden my most regulators, and defined by the SEC as "transactions which create an artificial price or maintain an artificial price for a tradable security". It would not seem irrational that people willingly gathering on internet to buy GME with the explicit objective of crashing hedge funds are considered market manipulators.

PaulDavisThe1st 6y ago

> There is nothing illegal in the activities that I've seen: just people/institutions trading and holding stocks in an open market. Not to contradict you, but just a reminder that short selling is based on something significantly different than "trading and holding stocks". The ability to promise to buy/sell stocks in the future at a given price has become so accepted as an ordinary feature of stock trading that we generally cease to notice how revolutionary of a concept it actually is. It's hard to see any rationale for prohibiting such arrangements - they are entirely consensual, and appear to have no additional impact on things that instantaneous buy/sell orders wouldn't also have. But this is an illusion. The ability to go short/long on a stock is completely different from the ability to buy/sell it, despite it being based on all the same mechanisms. It's a truly radical concept that has slipped under our radar because it could be described without any new concepts or terms.

throw0101a 6y ago
For the record, shorting stocks has been around for as long as capital markets have been around (1609): * https://en.wikipedia.org/wiki/Short_(finance)#History https://en.wikipedia.org/wiki/Short_(finance)#History Bond markets started early than that: * https://en.wikipedia.org/wiki/Stock_market#History https://en.wikipedia.org/wiki/Stock_market#History The judgement of the value of this I will leave to others to decide.
- PaulDavisThe1st 6y ago
  Sorry, I did not mean to imply anything about temporality (i.e. that short selling was "new" in terms of starting significantly after stock trading). My point was almost consonant with yours - it's almost as old as stock trading, but nobody realized how fundamentally different the concept is. They didn't realize it in 1609, and they certainly don't recognize it now. Most naive conceptions of how stock markets work would never allow for these sorts of contracts. The fact that they've (nearly) always been a part of actual stock markets just points to the same sort of gaps between the actual operation of the financial services industry and how most people think things ought to be that the current GME gyrations are (according to some) also pointing at.
plauribre 6y ago
Short selling is not revolutionary at all. Options and short selling are perfectly normal market instruments that have far ranging utility, including both hedging securities and insurance on tangible goods (e.g. a pork farmer buying puts on pork to ensure he can sell his product at a specific price). Neither is it "radical" in any type of market. It just means selling something you don't actually have yet (something you're "short"). Think of a middleman who sources classic cars. He contractually agrees to sell a 1991 Ferrari for $60k. He doesn't yet own the vehicle, but knows he can source them for $50k. Unfortunately for him, a recently popular meme has gassed the price of Ferraris, and he now has to pay $70k for the car. He's still obligated to sell at $60k, so he begrudgingly takes delivery and loses $10k, having "sold short" the car. Is he revolutionary or radical?
- 6y ago

Galanwe 6y ago

> There is nothing illegal in the activities that I've seen: just people/institutions trading and holding stocks in an open market. This is a bit of an oversimplification. Market manipulation for instance is forbidden my most regulators, and defined by the SEC as "transactions which create an artificial price or maintain an artificial price for a tradable security". It would not seem irrational that people willingly gathering on internet to buy GME with the explicit objective of crashing hedge funds are considered market manipulators.