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And what about all the people who watch MSNBC and CNBC and Cramer, do they need to stop pushing stops as good or bad too? They tell lots of people "who don't ca

And what about all the people who watch MSNBC and CNBC and Cramer, do they need to stop pushing stops as good or bad too? They tell lots of people "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" too. None of this could have happened if they weren't shorting GME at 143%+ of float. They were greedy, this is the consequence. In 2006-2008, they ALL were greedy and so the government had to bail them out. No lessons were learned. If the SEC wants to do something, remove these instruments that allow infinite leverage and collapses.

shakezula 6y ago
They were greedy, they over leveraged their positions, and when the market called them out on it exactly like it’s supposed to, they just turned the market off. Im almost surprised someone hasn’t been arrested for that move yet.
fairity 6y ago
Greed is really only a problem when your actions ultimately hurt someone else. In general, shorting stocks is a beneficial action because it helps prevent shares from becoming overvalued. So, yea, the fact that GME had 143% of its shares shorted is a function of greed. But, no, greed in this case was not a problem so long as GME's share price was fairly valued.
- InvertedRhodium 6y ago
  Is "fair value" an objective metric in this context?
  - fairity 6y ago
    Yea, it's objective in the sense that it's the net present value of all future cash flow. Many unknowns in that formula, of course.
pas 6y ago
You're mushing together two separate issues. Shorting GME at 100+ is not in itself a problem. (There's an argument that it dilutes the stock, makes it harder for the underlying company to turn around, because market sentiment is already against them, see investment reflexivity theory, etc.) There's a problem with bailing out big companies again and again. While not bailing out small investors (directly). The other problem is that there's no real defense against CNBC/Twitter amplified end-user stupidity: https://www.youtube.com/watch?v=lMUtU0tOmNE https://www.youtube.com/watch?v=lMUtU0tOmNE Every stock trading app/site/service requires submitting tons of "risk declaration" forms. (Sure, all of it is next next finish. It's the EULA/TOS all again, but with money.) And that's the problem.
sanderjd 6y ago
CNBC / Cramer type stuff is pretty bad too IMO, but way less mainstream than network news talking about how a single stock is a rocket ship and making all these regular joes (just like you!) oodles of cash.
Spooky23 6y ago
I haven’t watched Cramer regularly in a long time, but unless he changed, this isn’t what he does. He has an entertainment component, but fundamentally encourages people to educate themselves and manage a portfolio of stocks who choose to do so. The mob bullshit we’re seeing now is just the new normal - brigades of internet idiots, motivated by profit or ignorance to run around like a drunken monkey. It’s no different than the political drama we’ve seen fomented by irresponsible social media like Twitter, Facebook, Reddit, etc.
Aunche 6y ago
We let big players partake in risky things like shorting GME above 100% float because we don't care if they lose. It's the same reason we allow them to invest in companies like Theranos. They know the risks they were getting into and will still be fine without a extra 0 in their bank account. Regular followers of WSB are aware of the risks as well, so I'm fine with them attempting a short squeeze. The problem is that they're encouraging regular people to join their crusade against hedge funds who are most likely going to time the market incorrectly. What's worse is that most of the world, including politicians are cheering them on.
- mike00632 6y ago
  Except hedgefunds only trade money from accredited investors, i.e. people who can afford to lose a lot of money. They also typically aren't swayed by TikTok videos and short explainers of how shorts work designed to hype up GSE. The point is that Robinhood investors are being exploited.
  - Aunche 6y ago
    Can you explain how you're disagreeing with me?
    - mike00632 6y ago
      I disagreed with the statement about WSB users knowing what they're doing. Upon closer reading I think our larger points are the same. All over the internet I'm seeing sleazy promotions for GameStop stock targeted at young people who are inexperienced with trading. Anyone left holding GameStop stock when this ends will lose a lot, i.e. most of WSB.
      - PartiallyTyped 6y ago
        Then you haven't been paying attention to WSB. WSB knows full well they will lose everything. We call it Loss Porn and it gets us going. When you see 5,6,7 figures in losses you get desensitised to it. It's a casino, yes we sometimes make money, we call that the first time, you know, the first one is free. Besides the jokes and the memes, Chamath went on CNBC and argued that WSB provided very good due diligence in some instances. Yes a lot of it is utter garbage, no doubt, but when there are specialists there able to call each other out, you get to see good analysis.

shakezula 6y ago

They were greedy, they over leveraged their positions, and when the market called them out on it exactly like it’s supposed to, they just turned the market off. Im almost surprised someone hasn’t been arrested for that move yet.

fairity 6y ago

Greed is really only a problem when your actions ultimately hurt someone else. In general, shorting stocks is a beneficial action because it helps prevent shares from becoming overvalued. So, yea, the fact that GME had 143% of its shares shorted is a function of greed. But, no, greed in this case was not a problem so long as GME's share price was fairly valued.

InvertedRhodium 6y ago
Is "fair value" an objective metric in this context?
- fairity 6y ago
  Yea, it's objective in the sense that it's the net present value of all future cash flow. Many unknowns in that formula, of course.

pas 6y ago

You're mushing together two separate issues. Shorting GME at 100+ is not in itself a problem. (There's an argument that it dilutes the stock, makes it harder for the underlying company to turn around, because market sentiment is already against them, see investment reflexivity theory, etc.) There's a problem with bailing out big companies again and again. While not bailing out small investors (directly). The other problem is that there's no real defense against CNBC/Twitter amplified end-user stupidity: https://www.youtube.com/watch?v=lMUtU0tOmNE https://www.youtube.com/watch?v=lMUtU0tOmNE Every stock trading app/site/service requires submitting tons of "risk declaration" forms. (Sure, all of it is next next finish. It's the EULA/TOS all again, but with money.) And that's the problem.

sanderjd 6y ago

CNBC / Cramer type stuff is pretty bad too IMO, but way less mainstream than network news talking about how a single stock is a rocket ship and making all these regular joes (just like you!) oodles of cash.

Spooky23 6y ago

I haven’t watched Cramer regularly in a long time, but unless he changed, this isn’t what he does. He has an entertainment component, but fundamentally encourages people to educate themselves and manage a portfolio of stocks who choose to do so. The mob bullshit we’re seeing now is just the new normal - brigades of internet idiots, motivated by profit or ignorance to run around like a drunken monkey. It’s no different than the political drama we’ve seen fomented by irresponsible social media like Twitter, Facebook, Reddit, etc.

Aunche 6y ago

We let big players partake in risky things like shorting GME above 100% float because we don't care if they lose. It's the same reason we allow them to invest in companies like Theranos. They know the risks they were getting into and will still be fine without a extra 0 in their bank account. Regular followers of WSB are aware of the risks as well, so I'm fine with them attempting a short squeeze. The problem is that they're encouraging regular people to join their crusade against hedge funds who are most likely going to time the market incorrectly. What's worse is that most of the world, including politicians are cheering them on.

mike00632 6y ago
Except hedgefunds only trade money from accredited investors, i.e. people who can afford to lose a lot of money. They also typically aren't swayed by TikTok videos and short explainers of how shorts work designed to hype up GSE. The point is that Robinhood investors are being exploited.
- Aunche 6y ago
  Can you explain how you're disagreeing with me?
  - mike00632 6y ago
    I disagreed with the statement about WSB users knowing what they're doing. Upon closer reading I think our larger points are the same. All over the internet I'm seeing sleazy promotions for GameStop stock targeted at young people who are inexperienced with trading. Anyone left holding GameStop stock when this ends will lose a lot, i.e. most of WSB.
    - PartiallyTyped 6y ago
      Then you haven't been paying attention to WSB. WSB knows full well they will lose everything. We call it Loss Porn and it gets us going. When you see 5,6,7 figures in losses you get desensitised to it. It's a casino, yes we sometimes make money, we call that the first time, you know, the first one is free. Besides the jokes and the memes, Chamath went on CNBC and argued that WSB provided very good due diligence in some instances. Yes a lot of it is utter garbage, no doubt, but when there are specialists there able to call each other out, you get to see good analysis.