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The FOMO is palpable. There's a hurried rush of small investors hoping to turn their meagre savings into a big win, backed by the anxiety that if they don't tr

The FOMO is palpable. There's a hurried rush of small investors hoping to turn their meagre savings into a big win, backed by the anxiety that if they don't try then they'll forever regret missing their one and only chance at a comfortable life. This sort of event would be less likely if America's wealth disparity weren't so grotesquely skewed.

BoorishBears 6y ago
It boggles the mind people think hedge funds can't profit off a mad rush like this...
- dkrich 6y ago
  I mean do people really believe Robinhood traders are moving billions of dollars of stock a day? Most admit that they aren’t selling and buying at higher and higher levels. That translates to very little cash to buy more. There is absolutely no way that these moves can be attributed to retail traders or short squeezes. The narrative that these are retailers causing every significant move higher and with every move the shorts are losing more and more is actually causing this bubble.
  - kenneth 6y ago
    Let's say the average bet is 1-5k into this the average Robinhood user invests around 5k), it only takes 200k-1M buying in to move $1B into the stock. When you start with a $200M market cap on a heavily shorted stock, you easily end up where we are today
    - dkrich 6y ago
      And doing it every day? Even now that the stock is $350 a share? If they are able to do that I have to question the “little guy” tag.
    - BoorishBears 6y ago
      Average bet being 1-5k feels optimistic by an order of magnitude... The entire account value of normal RH users in the range of 1-5k Most people just joining don't have 1k to just throw at a lottery ticket, and remember that until today RH allowed fractional shares of GME - But you know, that's not even it... The other day GME did 20 Billion in volume in a single trading day. More than the S&P 500. I don't understand how people think retail can account for that.
  - rory 6y ago
    Matt Levine's email today estimates retail investors to be about 30% of total volume (with actual data from Citadel), but retail was net selling on Tuesday, Wednesday, and Thursday. So theoretically retail is enough to move the price if they were truly united, but that isn't actually the case. It's just not sexy to say "I bought in for a couple days and am taking my gains" in a public forum.
- nrmitchi 6y ago
  Why do you think "hedge funds" are not? The small ones that were caught in a bad position at the beginning? Sure, they probably didn't. But most other funds, or trading desks, or market makers, or brokerages (etc) are most likely printing money right now.
  - BoorishBears 6y ago
    ... what? My comment is literally saying hedge funds (like Citadel...) are profiting off this.
    - nrmitchi 6y ago
      You're right, I misread. My apologies.
- germinalphrase 6y ago
  ‘People’ don’t know what hedge funds do.
- the_local_host 6y ago
  > It boggles the mind people think hedge funds can't profit off a mad rush like this... How exactly would they do it? Shorting it again would involve calling the top for a stock whose price recently has been unpredictable, but very high. Writing options seems nuts for something this volatile. I guess they could "buy volatility" with a straddle but again what would the numbers have to be on this where they turn a profit? It's not like the rest of the market is underestimating the volatility, it's evident to everyone.
  - BoorishBears 6y ago
    I would be completely out of my depth implying I understand all the creative ways different hedge funds make money, but there's a lot more tricks in the bag than "short it" and "write options" Just look at Citadel... how much money do you think they've made off early access to majority of retail orders for GME as RH exploded? And how much more money will they make on an ongoing basis after this from all the new users? The volume has been insane, someone is making money besides retail investors, and they won't be the ones left holding the bag after the musical chairs stop...
  - Bedon292 6y ago
    Volatility makes the HFT's money. Hundreds of millions of shares are flying around the past few days. Thats not from a bunch of people buying and holding. They make money on fractions of a percent swings. They can make a lot of money on 50% swings. The other thing is, the price WILL go down eventually. Even if not today. A fund with billions of dollars can afford to sit on a short of GME at $400 for a long time. Longer than the upward pressure will last. The narrative was that the short squeeze will happen today, and prices will skyrocket. You only had to be in it for a little while. Now the narrative is changing, and it will maybe be next week, or even farther out. Sure the meme is to hold forever, but anyone holding any amount that will maybe make a difference are going to see that life changing number and sell eventually.
    - brootstrap 6y ago
      One of my neighborhood friends is a HFT guy and he says he makes bank off fractions of a dollar. Not all trading is equal obviously. But he said sometimes it's like 3,4,5 decimals places deep that he is watching the stock prices and trading
- Justsignedup 6y ago
  hedge funds put in some money. They lost. Yeah. But automated trading solutions quickly flip things around. If they are smart. Losing money is literally part of what they do. Some they lose some they win. The success is winning a bit more than you lose, and very frequently.
Leader2light 6y ago
It is so sad. The collapse will come within the next decade. Total financial collapse.
ycombigator 6y ago
Many just want to screw the hedge funds, finally it's their blood in the water.
- markbnj 6y ago
  I don't get this. I can't imagine the professional investor class is still blindly following their shorts. They're all out by now, aren't they? If the "little guys" are making money I tend to think it's coming from other little guys.
  - NationalPark 6y ago
    The "short" (haha) answer is that we just don't know what the funds have done during the last week. They're incentivized to mislead the public about closing their positions. But the technical reasons the gamma squeeze happened and possible short squeeze today could happen still make sense: the equity has oversubscribed short interest and a skyrocketing price.
    - tayo42 6y ago
      I'm kind of amazed how little transparency there is in the stock market. Everyone seems to be guessing. The unequal amount of information for regular people is really unfair and seems like an easy situation for corruption to take place
  - disgrunt 6y ago
    No. Apparently other hedge funds got in line behind Melvin with even more aggressive shorts.
  - Anon1096 6y ago
    The truth of the matter is that hedge funds and institutions are quietly the ones actually pumping these stocks. Reddit likes to paint a narrative that they are in control, but when their messiah has 50MM max of securities and options, meanwhile single trades are going through worth over 700MM, the narrative just doesn't make sense. This is a battle of Wall Street vs Wall Street with some retailers playing along as pawns. Most likely, starry eyed retailers are going to be the ones holding the bag when it all comes down because they're playing a game without even knowing who they're up against. As for the shorts, Melvin and Citron are out but new shorters get in every day. The higher the price goes the more incentive there is to short. Most will probably lose money as the bubble inflates. But a few will make out like kings when it pops.
sosuke 6y ago
When hindsight points out the opportunities that you overlooked which would have giving you that comfortable life it infects all future decision making.
- throwaway-571 6y ago
  Is there a spoiler tag on HN ? These ones still hurt: There is a lot of thing one could have done "for the LULz" but decided to browse HN, Imgur or Reddit instead. - Bitcoin. I heard about it when it was still possible to mint it on CPU, but chose to run SETI@Home instead. - Bitcoin when it was at merely $9000. - Ethereum when it was going under $1. - Dogecoin like anytime before yesterday (up 6x or something today). - #GME when options where pennies on the dollar, or even the stock at $20 in early January. - $Tesla in January, February, March of 2020 or anytime before the split. - $Tesla instead of putting down $1000 to reserve a slot to buy a model 3 at its announcement, put it in the stock, or even better, in long dated calls. - $Amazon or $Apple last march or anytime before that. - $SPCE after it crashed in March (a WSB hyped stock)
  - dleslie 6y ago
    Dogecoin is ... Just _why_? There's no limit on the number of coins. Mining is designed to be forever-easy. The coin is _designed_ for rapid deflation. Why are people treating it as anything other than the joke it was intended to be?
    - throwaway-571 6y ago
      You can still make money of a joke if you are quick enough! Just @-mention Elon and here you go.
    - whatshisface 6y ago
      I really have no idea, but your question suggests its own answer: fiat currencies are also designed for eternal inflation (I think you swapped inflation with deflation) and many people consider that a boon.
agumonkey 6y ago
I wonder what's the optimum sizing of FOMO. 1% ? 0.1 ? 2% ?
- qznc 6y ago
  The Kelly criterion tells you how big your bet should be.
oramit 6y ago
My Facebook feed is filled with people talking about this. These are friends I have know for years who have never mentioned stocks before but now are talking about "holding the line". It is FOMO for sure, but the real emotions I get from talking with people are outrage and revenge. Everyone feels like the system (economic and political) is rigged against the public. The dopamine hit from sticking it to the man is palpable.
- sanderjd 6y ago
  That would be useful if they were actually sticking it to the man. But that isn't what's happening here. What's happening is a big bubble where most of these regular people are gonna lose lots of money while the hedge funds end up closing out their position for a manageable loss and come out just fine.
  - oramit 6y ago
    For sure. This is a terrible way to "stick it to the man" and i've encouraged everyone i've talked to about this to stay far away. Unfortunately emotions have really taken hold. Greed is a hard one to talk people down from but doable. Anger and outrage pretty much impossible.
  - PaulDavisThe1st 6y ago
    ... not to mention the few smarter hedge funds and mutual funds that quickly jumped in an out of this and made substantial gains, leaving everyone who thinks they are "holding the line" even more "on the line".
    - ummonk 6y ago
      Ehh, the short ratio is still over 100%, and I guarantee you those aren't retail investors. So plenty of institutional investments to stick it to left.
      - sanderjd 6y ago
        You don't know when those shorts got in. The price is clearly too high now, so it makes sense that sophisticated investors (probably other hedge funds) would be entering short positions at the recent prices. And those recent entrants will not be squeezed unless the price goes up by another ludicrous amount, which it is less likely to do now that the initial surge of enthusiasm is running its course. So lots of retail traders who got into the frenzy late with normal stock purchases at these absurd prices will get screwed during the inevitable crash, while the recent shorters will make a killing.
NoOneNew 6y ago
Everything on WSB states this is a bad investment plan and is more to bankrupt Melvin because they tried to bankrupt Gamestop. Short sellers have been using the down turned economy to collapse struggling companies that hire everyday people. What's funny is how the HN community tries to defend the firms they've whined about for years. Is what's going on irrational? Yup. But it pulls back the curtain of what the financial firms do to the economy and their own manipulation tactics.
- sanderjd 6y ago
  Here's what oh-so-many people are missing: the gigantic volume in these stocks is no longer coming from the WSB YOLO bros who know they'll lose money but think that's worth it to stick it to hedge funds. That may well be who was getting into the stock on Monday and Tuesday. But now it is people who saw the story on Good Morning America, having never previously heard of WSB or Robinhood, who don't care about hedge funds or any of that, but just got the impression from the news that hey this stock is going way up and that must mean it is a way to make a quick buck. And those are the people who are actually going to get screwed, not the hedge fund managers, who will be just fine.
  - NoOneNew 6y ago
    So it's WSB fault that the news outlets spun the narrative to confuse people? Sorry, but hasn't the news spinning and generally misconstruing news stories to the benefit of their advertisers and financiers agendas been the issue the past few years?
    - chrisdhoover 6y ago
      The news has a long history of prevaricating. “Remember the Maine.” It is only recently that folks are waking up to what Chomsky spent a lifetime explaining. The awakening is accelerating. Assange and Snowden, the naked media lying in the 2020 election, and now Wall Street manipulation is being exposed. We never had a reckoning after 2008. If this becomes an infinite runaway squeeze. Who will get bailed out?
    - 6y ago
xbmcuser 6y ago
We are going to find out what will happen soon. As looking at the trade volumes people seem to have stopped selling or buying looking at the stock prices and the trades it looks like hf traders rather than retail
- f430 6y ago
  The rally will continue as long as there are buyers given the price and the neural pathways have been fully mapped out. What I'm worried about is that there were more than one Melvin Capital with several banks now involved who do not own enough shares to cover the shorts. Which means we are literally witnessing a money printer go brrr situation where as long as there are people buying in due to FOMO or some us-vs-them politics, the prices will rally. The most shocking part is how exposed not only the brokers are but now the banks are also exposed. We are literally seeing a repeat of 1929. https://www.history.com/news/1929-stock-market-crash-warning-signs https://www.history.com/news/1929-stock-market-crash-warning...
- deleted 6y ago
  [deleted]
throwaway-571 6y ago
It's kind of depressing when you look at these crazy success stories of lottery winners. You realize even a small bet at the right time could be life-changing. Let's say instead of buying a Latte every working days at starbucks over the last five years you had invested it in tesla stocks. Or maybe for every starbucks latte you drank, you invested the same amount in ETF and in Tesla (pay 3 latte, drink one). Where would your life be? Would you still be at your 9-to-5 or would you go work for that non-profit? Or would you just be lazing around on the sofa or at the beach sipping pina-coladas? Anyway, sometimes it takes a lot of energy to deal with the KIMO (Know I Missed Out).
- triangleman 6y ago
  The best analysis is always against the company itself: - SBUX instead of buying Starbucks - MO instead of buying cigarettes (see The Millionaire Next Door for this analysis) - LVMH instead of buying LV, M, or H - NVDA instead of buying video cards and AAA games - CVS instead of shopping at convenience stores
  - fractionalhare 6y ago
    This doesn't seem to be saying anything about those companies though. It's just that you will do better financially if you invest money instead of spending it. Well...yeah.
- slfnflctd 6y ago
  Totally know what you mean. What I do is just assume I'm going to have to work until I die, and keep angling toward work I tolerate better. I try to invest wisely, maintain a few months of cash savings, etcetera, but don't think about it otherwise. Money is imaginary and anything could happen to it at any moment. If once in a while I want to use some of my disposable income to spin a roulette wheel or buy GME, and can keep it under control, I see no problem. If I win, it's a nice surprise. But if I don't feel like playing, of course I won't win anything. Despite having watched it since Monday or before, I don't think about what I could've won on GME this week any more than what I could've won at some dog track. I decided not to play, and that's that. My life continues on as normal.
thereddaikon 6y ago
That's not the sense I'm getting at all. Oh im sure there are those involved who fit the description. But for most, it isn't about making money at all. Its about financial warfare with "the man". The overwhelming majority of examples I have seen so far are only concerned with causing hedges funds to collapse and to put brokers out of business, personal losses be damned. And I see little reason to doubt this. Everyone knows Gamestop is a company with an obsolete business model, a bad reputation and little chance of turning things around. Everyone knows that there is little to no chance of making any money on holding. But $500 isn't a lot of money. 3 million people each putting $500 in to GME is. Obviously there are some who are putting in far more. Current market cap is $24 billion. Its coming from somewhere. I suspect once this is all over we will find that some major players got involved as well and put a lot of money into GME to topple their rivals. But that isn't the main narrative and most of the people buying in are doing so to make a statement. This has started a discussion. A lot of people are getting a 101 education on how the stock market really works and they are learning just how little it actually has to do with real value and the economy. I predict there will be serious public pressure for regulatory reform. People are going to want to make shorting and high speed trading illegal.
- AmericanChopper 6y ago
  > A lot of people are getting a 101 education on how the stock market really works and they are learning just how little it actually has to do with real value and the economy. I don’t see how you can draw this conclusion from these events. If this level of price volatility was commonly caused by market participants, then it would be such big news when it happens. They’re not common at all, they represent a small number of events where a small number of shares were traded overvalue for very short periods of time. Nobody is concerned that stocks are overvalued because short squeezes are just happening all the time. Squeezes are also short sellers getting punished for trying to profit off somebody else’s losses, which as far as I can tell most people think is very morally righteous. The only time they’re controversial is when intervention occurs to rescue the short seller.
znpy 6y ago
"That's just, like, your opinion man"
kortilla 6y ago
> This sort of event would be less likely if America's wealth disparity weren't so grotesquely skewed. Highly unlikely. It doesn’t matter how rich the rich are if you’re poor and want to gamble your way out. The problem is with poverty, which is completely unrelated to wealth disparity. One you can fix by making life worse for everyone, the other you can fix by making life better for the poor.
throwaway-571 6y ago
WSB is trying to create a short squeeze by buying call options to crush the shorters. RoaringKitty found the stock underpriced in 2019 and then managed to turn 50k into 13M in 1.5 years + and is still holding 22M in stock and calls.
Unklejoe 6y ago
> This sort of event would be less likely if America's wealth disparity weren't so grotesquely skewed. Maybe, but I'm pretty well off (at least compared to the rest of the country) and I still feel the same way. It's primal if you ask me.

BoorishBears 6y ago

It boggles the mind people think hedge funds can't profit off a mad rush like this...

dkrich 6y ago
I mean do people really believe Robinhood traders are moving billions of dollars of stock a day? Most admit that they aren’t selling and buying at higher and higher levels. That translates to very little cash to buy more. There is absolutely no way that these moves can be attributed to retail traders or short squeezes. The narrative that these are retailers causing every significant move higher and with every move the shorts are losing more and more is actually causing this bubble.
- kenneth 6y ago
  Let's say the average bet is 1-5k into this the average Robinhood user invests around 5k), it only takes 200k-1M buying in to move $1B into the stock. When you start with a $200M market cap on a heavily shorted stock, you easily end up where we are today
  - dkrich 6y ago
    And doing it every day? Even now that the stock is $350 a share? If they are able to do that I have to question the “little guy” tag.
  - BoorishBears 6y ago
    Average bet being 1-5k feels optimistic by an order of magnitude... The entire account value of normal RH users in the range of 1-5k Most people just joining don't have 1k to just throw at a lottery ticket, and remember that until today RH allowed fractional shares of GME - But you know, that's not even it... The other day GME did 20 Billion in volume in a single trading day. More than the S&P 500. I don't understand how people think retail can account for that.
- rory 6y ago
  Matt Levine's email today estimates retail investors to be about 30% of total volume (with actual data from Citadel), but retail was net selling on Tuesday, Wednesday, and Thursday. So theoretically retail is enough to move the price if they were truly united, but that isn't actually the case. It's just not sexy to say "I bought in for a couple days and am taking my gains" in a public forum.
nrmitchi 6y ago
Why do you think "hedge funds" are not? The small ones that were caught in a bad position at the beginning? Sure, they probably didn't. But most other funds, or trading desks, or market makers, or brokerages (etc) are most likely printing money right now.
- BoorishBears 6y ago
  ... what? My comment is literally saying hedge funds (like Citadel...) are profiting off this.
  - nrmitchi 6y ago
    You're right, I misread. My apologies.
germinalphrase 6y ago
‘People’ don’t know what hedge funds do.
the_local_host 6y ago
> It boggles the mind people think hedge funds can't profit off a mad rush like this... How exactly would they do it? Shorting it again would involve calling the top for a stock whose price recently has been unpredictable, but very high. Writing options seems nuts for something this volatile. I guess they could "buy volatility" with a straddle but again what would the numbers have to be on this where they turn a profit? It's not like the rest of the market is underestimating the volatility, it's evident to everyone.
- BoorishBears 6y ago
  I would be completely out of my depth implying I understand all the creative ways different hedge funds make money, but there's a lot more tricks in the bag than "short it" and "write options" Just look at Citadel... how much money do you think they've made off early access to majority of retail orders for GME as RH exploded? And how much more money will they make on an ongoing basis after this from all the new users? The volume has been insane, someone is making money besides retail investors, and they won't be the ones left holding the bag after the musical chairs stop...
- Bedon292 6y ago
  Volatility makes the HFT's money. Hundreds of millions of shares are flying around the past few days. Thats not from a bunch of people buying and holding. They make money on fractions of a percent swings. They can make a lot of money on 50% swings. The other thing is, the price WILL go down eventually. Even if not today. A fund with billions of dollars can afford to sit on a short of GME at $400 for a long time. Longer than the upward pressure will last. The narrative was that the short squeeze will happen today, and prices will skyrocket. You only had to be in it for a little while. Now the narrative is changing, and it will maybe be next week, or even farther out. Sure the meme is to hold forever, but anyone holding any amount that will maybe make a difference are going to see that life changing number and sell eventually.
  - brootstrap 6y ago
    One of my neighborhood friends is a HFT guy and he says he makes bank off fractions of a dollar. Not all trading is equal obviously. But he said sometimes it's like 3,4,5 decimals places deep that he is watching the stock prices and trading
Justsignedup 6y ago
hedge funds put in some money. They lost. Yeah. But automated trading solutions quickly flip things around. If they are smart. Losing money is literally part of what they do. Some they lose some they win. The success is winning a bit more than you lose, and very frequently.

Leader2light 6y ago

It is so sad. The collapse will come within the next decade. Total financial collapse.

ycombigator 6y ago

Many just want to screw the hedge funds, finally it's their blood in the water.

markbnj 6y ago
I don't get this. I can't imagine the professional investor class is still blindly following their shorts. They're all out by now, aren't they? If the "little guys" are making money I tend to think it's coming from other little guys.
- NationalPark 6y ago
  The "short" (haha) answer is that we just don't know what the funds have done during the last week. They're incentivized to mislead the public about closing their positions. But the technical reasons the gamma squeeze happened and possible short squeeze today could happen still make sense: the equity has oversubscribed short interest and a skyrocketing price.
  - tayo42 6y ago
    I'm kind of amazed how little transparency there is in the stock market. Everyone seems to be guessing. The unequal amount of information for regular people is really unfair and seems like an easy situation for corruption to take place
- disgrunt 6y ago
  No. Apparently other hedge funds got in line behind Melvin with even more aggressive shorts.
- Anon1096 6y ago
  The truth of the matter is that hedge funds and institutions are quietly the ones actually pumping these stocks. Reddit likes to paint a narrative that they are in control, but when their messiah has 50MM max of securities and options, meanwhile single trades are going through worth over 700MM, the narrative just doesn't make sense. This is a battle of Wall Street vs Wall Street with some retailers playing along as pawns. Most likely, starry eyed retailers are going to be the ones holding the bag when it all comes down because they're playing a game without even knowing who they're up against. As for the shorts, Melvin and Citron are out but new shorters get in every day. The higher the price goes the more incentive there is to short. Most will probably lose money as the bubble inflates. But a few will make out like kings when it pops.

sosuke 6y ago

When hindsight points out the opportunities that you overlooked which would have giving you that comfortable life it infects all future decision making.

throwaway-571 6y ago
Is there a spoiler tag on HN ? These ones still hurt: There is a lot of thing one could have done "for the LULz" but decided to browse HN, Imgur or Reddit instead. - Bitcoin. I heard about it when it was still possible to mint it on CPU, but chose to run SETI@Home instead. - Bitcoin when it was at merely $9000. - Ethereum when it was going under $1. - Dogecoin like anytime before yesterday (up 6x or something today). - #GME when options where pennies on the dollar, or even the stock at $20 in early January. - $Tesla in January, February, March of 2020 or anytime before the split. - $Tesla instead of putting down $1000 to reserve a slot to buy a model 3 at its announcement, put it in the stock, or even better, in long dated calls. - $Amazon or $Apple last march or anytime before that. - $SPCE after it crashed in March (a WSB hyped stock)
- dleslie 6y ago
  Dogecoin is ... Just _why_? There's no limit on the number of coins. Mining is designed to be forever-easy. The coin is _designed_ for rapid deflation. Why are people treating it as anything other than the joke it was intended to be?
  - throwaway-571 6y ago
    You can still make money of a joke if you are quick enough! Just @-mention Elon and here you go.
  - whatshisface 6y ago
    I really have no idea, but your question suggests its own answer: fiat currencies are also designed for eternal inflation (I think you swapped inflation with deflation) and many people consider that a boon.

agumonkey 6y ago

I wonder what's the optimum sizing of FOMO. 1% ? 0.1 ? 2% ?

qznc 6y ago
The Kelly criterion tells you how big your bet should be.

oramit 6y ago

My Facebook feed is filled with people talking about this. These are friends I have know for years who have never mentioned stocks before but now are talking about "holding the line". It is FOMO for sure, but the real emotions I get from talking with people are outrage and revenge. Everyone feels like the system (economic and political) is rigged against the public. The dopamine hit from sticking it to the man is palpable.

sanderjd 6y ago
That would be useful if they were actually sticking it to the man. But that isn't what's happening here. What's happening is a big bubble where most of these regular people are gonna lose lots of money while the hedge funds end up closing out their position for a manageable loss and come out just fine.
- oramit 6y ago
  For sure. This is a terrible way to "stick it to the man" and i've encouraged everyone i've talked to about this to stay far away. Unfortunately emotions have really taken hold. Greed is a hard one to talk people down from but doable. Anger and outrage pretty much impossible.
- PaulDavisThe1st 6y ago
  ... not to mention the few smarter hedge funds and mutual funds that quickly jumped in an out of this and made substantial gains, leaving everyone who thinks they are "holding the line" even more "on the line".
  - ummonk 6y ago
    Ehh, the short ratio is still over 100%, and I guarantee you those aren't retail investors. So plenty of institutional investments to stick it to left.
    - sanderjd 6y ago
      You don't know when those shorts got in. The price is clearly too high now, so it makes sense that sophisticated investors (probably other hedge funds) would be entering short positions at the recent prices. And those recent entrants will not be squeezed unless the price goes up by another ludicrous amount, which it is less likely to do now that the initial surge of enthusiasm is running its course. So lots of retail traders who got into the frenzy late with normal stock purchases at these absurd prices will get screwed during the inevitable crash, while the recent shorters will make a killing.

NoOneNew 6y ago

Everything on WSB states this is a bad investment plan and is more to bankrupt Melvin because they tried to bankrupt Gamestop. Short sellers have been using the down turned economy to collapse struggling companies that hire everyday people. What's funny is how the HN community tries to defend the firms they've whined about for years. Is what's going on irrational? Yup. But it pulls back the curtain of what the financial firms do to the economy and their own manipulation tactics.

sanderjd 6y ago
Here's what oh-so-many people are missing: the gigantic volume in these stocks is no longer coming from the WSB YOLO bros who know they'll lose money but think that's worth it to stick it to hedge funds. That may well be who was getting into the stock on Monday and Tuesday. But now it is people who saw the story on Good Morning America, having never previously heard of WSB or Robinhood, who don't care about hedge funds or any of that, but just got the impression from the news that hey this stock is going way up and that must mean it is a way to make a quick buck. And those are the people who are actually going to get screwed, not the hedge fund managers, who will be just fine.
- NoOneNew 6y ago
  So it's WSB fault that the news outlets spun the narrative to confuse people? Sorry, but hasn't the news spinning and generally misconstruing news stories to the benefit of their advertisers and financiers agendas been the issue the past few years?
  - chrisdhoover 6y ago
    The news has a long history of prevaricating. “Remember the Maine.” It is only recently that folks are waking up to what Chomsky spent a lifetime explaining. The awakening is accelerating. Assange and Snowden, the naked media lying in the 2020 election, and now Wall Street manipulation is being exposed. We never had a reckoning after 2008. If this becomes an infinite runaway squeeze. Who will get bailed out?
  - 6y ago

xbmcuser 6y ago

We are going to find out what will happen soon. As looking at the trade volumes people seem to have stopped selling or buying looking at the stock prices and the trades it looks like hf traders rather than retail

f430 6y ago
The rally will continue as long as there are buyers given the price and the neural pathways have been fully mapped out. What I'm worried about is that there were more than one Melvin Capital with several banks now involved who do not own enough shares to cover the shorts. Which means we are literally witnessing a money printer go brrr situation where as long as there are people buying in due to FOMO or some us-vs-them politics, the prices will rally. The most shocking part is how exposed not only the brokers are but now the banks are also exposed. We are literally seeing a repeat of 1929. https://www.history.com/news/1929-stock-market-crash-warning-signs https://www.history.com/news/1929-stock-market-crash-warning...
deleted 6y ago
[deleted]

throwaway-571 6y ago

It's kind of depressing when you look at these crazy success stories of lottery winners. You realize even a small bet at the right time could be life-changing. Let's say instead of buying a Latte every working days at starbucks over the last five years you had invested it in tesla stocks. Or maybe for every starbucks latte you drank, you invested the same amount in ETF and in Tesla (pay 3 latte, drink one). Where would your life be? Would you still be at your 9-to-5 or would you go work for that non-profit? Or would you just be lazing around on the sofa or at the beach sipping pina-coladas? Anyway, sometimes it takes a lot of energy to deal with the KIMO (Know I Missed Out).

triangleman 6y ago
The best analysis is always against the company itself: - SBUX instead of buying Starbucks - MO instead of buying cigarettes (see The Millionaire Next Door for this analysis) - LVMH instead of buying LV, M, or H - NVDA instead of buying video cards and AAA games - CVS instead of shopping at convenience stores
- fractionalhare 6y ago
  This doesn't seem to be saying anything about those companies though. It's just that you will do better financially if you invest money instead of spending it. Well...yeah.
slfnflctd 6y ago
Totally know what you mean. What I do is just assume I'm going to have to work until I die, and keep angling toward work I tolerate better. I try to invest wisely, maintain a few months of cash savings, etcetera, but don't think about it otherwise. Money is imaginary and anything could happen to it at any moment. If once in a while I want to use some of my disposable income to spin a roulette wheel or buy GME, and can keep it under control, I see no problem. If I win, it's a nice surprise. But if I don't feel like playing, of course I won't win anything. Despite having watched it since Monday or before, I don't think about what I could've won on GME this week any more than what I could've won at some dog track. I decided not to play, and that's that. My life continues on as normal.

thereddaikon 6y ago

That's not the sense I'm getting at all. Oh im sure there are those involved who fit the description. But for most, it isn't about making money at all. Its about financial warfare with "the man". The overwhelming majority of examples I have seen so far are only concerned with causing hedges funds to collapse and to put brokers out of business, personal losses be damned. And I see little reason to doubt this. Everyone knows Gamestop is a company with an obsolete business model, a bad reputation and little chance of turning things around. Everyone knows that there is little to no chance of making any money on holding. But $500 isn't a lot of money. 3 million people each putting $500 in to GME is. Obviously there are some who are putting in far more. Current market cap is $24 billion. Its coming from somewhere. I suspect once this is all over we will find that some major players got involved as well and put a lot of money into GME to topple their rivals. But that isn't the main narrative and most of the people buying in are doing so to make a statement. This has started a discussion. A lot of people are getting a 101 education on how the stock market really works and they are learning just how little it actually has to do with real value and the economy. I predict there will be serious public pressure for regulatory reform. People are going to want to make shorting and high speed trading illegal.

AmericanChopper 6y ago
> A lot of people are getting a 101 education on how the stock market really works and they are learning just how little it actually has to do with real value and the economy. I don’t see how you can draw this conclusion from these events. If this level of price volatility was commonly caused by market participants, then it would be such big news when it happens. They’re not common at all, they represent a small number of events where a small number of shares were traded overvalue for very short periods of time. Nobody is concerned that stocks are overvalued because short squeezes are just happening all the time. Squeezes are also short sellers getting punished for trying to profit off somebody else’s losses, which as far as I can tell most people think is very morally righteous. The only time they’re controversial is when intervention occurs to rescue the short seller.

znpy 6y ago

"That's just, like, your opinion man"

kortilla 6y ago

> This sort of event would be less likely if America's wealth disparity weren't so grotesquely skewed. Highly unlikely. It doesn’t matter how rich the rich are if you’re poor and want to gamble your way out. The problem is with poverty, which is completely unrelated to wealth disparity. One you can fix by making life worse for everyone, the other you can fix by making life better for the poor.

throwaway-571 6y ago

WSB is trying to create a short squeeze by buying call options to crush the shorters. RoaringKitty found the stock underpriced in 2019 and then managed to turn 50k into 13M in 1.5 years + and is still holding 22M in stock and calls.

Unklejoe 6y ago

> This sort of event would be less likely if America's wealth disparity weren't so grotesquely skewed. Maybe, but I'm pretty well off (at least compared to the rest of the country) and I still feel the same way. It's primal if you ask me.