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I would really appreciate it if somebody could explain to me how people who sell short a stock are somehow “suffocating it” or “killing jobs.” And I say this as
by dkrich 6y ago
I would really appreciate it if somebody could explain to me how people who sell short a stock are somehow “suffocating it” or “killing jobs.” And I say this as someone who has about 18 years of investing experience. I continue to believe stock shorting is one of the most poorly understood parts of equity markets and the wrong parts are most commonly parroted by people with little to no experience with short selling themselves.
And this narrative that somehow the regular Joe is sticking it to the man and using proceeds to pay medical bills makes for good heartwarming stuff, but I take umbrage with the idea that one person’s cause is more worthy than another and so they deserve the profits not this greedy oz character behind the curtain that is likely other retail traders and HFT momentum funds (the same ones that are vilified in this movement) buying it up as it moves higher and becomes more popular. If you make money trading, great but let’s ease up a bit with the saving the world nonsense. It’s not as if gambling your savings on call options is saving the world. It’s a catchy storyline to make people feel more comfortable with the idea of gambling.
- cainxinth 6y agoThis is what I don't get either. I keep thinking of Danny DeVito's speech at the end "Other People's Money." "You know, at one time there must've been dozens of companies making buggy whips. And I'll bet the last company around was the one that made the best goddamn buggy whip you ever saw. Now how would you have liked to have been a stockholder in that company?" GameStop sells buggy whips. Why shouldn't people bet against them?
- dkrich 6y agoExactly. And I suppose not too many are aware of the fraud that’s been exposed by short sellers who usually pay the costs associated with investigating fraud. Wirecard or Enron, anyone?
- StillBored 6y agoLast I checked steam/etc doesn't allow one to resell their games. So they do provide a convenient service in that regard.
- cainxinth 6y agoYou can sell used games on craigslist, ebay, facebook marketplace, or any number of places... often for better prices than GameStop will give you.
- StillBored 6y agoYes that works, but in many cases your still paying a middleman. Be that ebay, or the post office. And the convenience of one stop selling the old game, and picking up the new is pretty strong. Frankly, its sometimes hard for me to understand how game-stop profits on some of that stuff. Every time I go in there, someone is selling their old xbox/whatever to get the new one, and I just about never see anyone buying the old hardware. Anyway, what I'm trying to say, is where I live the only bookstores that seem to be doing well are the half-price bookstores which operate with a similar model (and are also headquartered in TX and resell games). So I don't think its all gloom and doom for them.
- xiphias2 6y agoThe big difference is that hedge funds are gambling other people's money, while taking a huge cut (and not taking the losses). I'm investing as well, but only with my money.