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I am not a financial advisor and this is not financial advice. I understand your response. There is one assumption that I think marks the difference between wh

by lc3sim 6y ago

I am not a financial advisor and this is not financial advice. I understand your response. There is one assumption that I think marks the difference between what side of the line one falls on. My understanding of your belief is that you think Melvin would not lie due to there being a large risk associated with lying. One might also assume that Melvin would not be dumb enough to short over 100% of GME stock. In exercise, I believe this to be the crux of the speculative argument that Melvin is dumb enough to use psychological warfare (which may have legal ramifications if they get caught) to try to get GME stock back down.

nrmitchi 6y ago
> I am not a financial advisor and this is not financial advice. Okay as soon as I read this I knew I shouldn't be expecting much, but... > My understanding of your belief is that you think Melvin would not lie due to there being a large risk associated with lying. This really isn't just lying a little bit, and isn't just a large risk. If you're running a fund like this, purposely making materially false statements like this would be akin to jumping out of a plane without a parachute and somehow hoping for the best, while 5M angry redditors are purposely trying to make sure you crash into the hardest thing possible. This position of "well maybe he's lying, you can't definitively prove he's not!" position is so bonkers that it's closer to a conspiracy theory than an actual opinion. > One might also assume that Melvin would not be dumb enough to short over 100% of GME stock. This has been discussed in depth elsewhere. You're understanding of this concept is fundamentally flawed. Frankly, even if it wasn't, you're suggesting that a single firm shorted more than 100%? Or that both Melvin Capital and Citron both shorted more than 100%, and that somehow added up (with your misunderstanding) to 140%?
- dataflow 6y ago
  Question: what do you think of this comment? https://news.ycombinator.com/item?id=25984635 https://news.ycombinator.com/item?id=25984635
  - nrmitchi 6y ago
    That is quite literally a different argument. The argument being made is that the original funds never exited their original ~$10 shorts. So every $100 increase in stock price is a 10x increase in losses. If someone re-entered at ~$300, a $100 increase would be a 30% increase in loses. The scale of these is massively different. I have absolutely no doubt that other firms have entered short positions. Claiming that "Melvin may have re-entered afterwards" is obviously a possibility, but is not the same as having lied about exiting in the first place.
    - dataflow 6y ago
      I get that legally it's different, but when ordinary people (like me) read "Melvin exited these position", they take it to mean "Melvin accepted the loss and gave up", which is in turn seen as implying "they no longer hold said positions". If Melvin bought and re-shorted all their shares at a similar price, then to many, many people, that's a legal distinction without a material difference. It's not "lying" technically, but it's pedantically misleading enough to be pretty darn close to lying for those of us asking the question. So when people question the veracity of the first statement, they're really wondering about the others too. Basically, my point is: if your rebuttal to the question of "did they lie?" is "no, that's preposterous, it would be a death sentence for the firm", then your answer might be correct technically as to the literal meaning of the question, but you've missed the spirit of what was being asked.
- lc3sim 6y ago
  > Okay as soon as I read this I knew I shouldn't be expecting much, but... There is no need for you to get feisty over an comment that I (who seems like someone you disagree with) posted on the internet. Perhaps this is a point where you can self-reflect on how you articulate yourself. Please understand that I don't care anymore. I don't care if you think I'm out of line. Yes, I read and understand your comment. I just don't engage with people that have bad communication skills. I am only writing this in an attempt to make you a better person.
fractionalhare 6y ago
There is also no evidence they singlehandedly shorted over 100% of GME stock. All of these claims and rumors unravel when you demand evidence. They might make sense if you assume their circular dependencies, but it's a house of cards.

by lc3sim 6y ago

nrmitchi 6y ago

> I am not a financial advisor and this is not financial advice. Okay as soon as I read this I knew I shouldn't be expecting much, but... > My understanding of your belief is that you think Melvin would not lie due to there being a large risk associated with lying. This really isn't just lying a little bit, and isn't just a large risk. If you're running a fund like this, purposely making materially false statements like this would be akin to jumping out of a plane without a parachute and somehow hoping for the best, while 5M angry redditors are purposely trying to make sure you crash into the hardest thing possible. This position of "well maybe he's lying, you can't definitively prove he's not!" position is so bonkers that it's closer to a conspiracy theory than an actual opinion. > One might also assume that Melvin would not be dumb enough to short over 100% of GME stock. This has been discussed in depth elsewhere. You're understanding of this concept is fundamentally flawed. Frankly, even if it wasn't, you're suggesting that a single firm shorted more than 100%? Or that both Melvin Capital and Citron both shorted more than 100%, and that somehow added up (with your misunderstanding) to 140%?

dataflow 6y ago
Question: what do you think of this comment? https://news.ycombinator.com/item?id=25984635 https://news.ycombinator.com/item?id=25984635
- nrmitchi 6y ago
  That is quite literally a different argument. The argument being made is that the original funds never exited their original ~$10 shorts. So every $100 increase in stock price is a 10x increase in losses. If someone re-entered at ~$300, a $100 increase would be a 30% increase in loses. The scale of these is massively different. I have absolutely no doubt that other firms have entered short positions. Claiming that "Melvin may have re-entered afterwards" is obviously a possibility, but is not the same as having lied about exiting in the first place.
  - dataflow 6y ago
    I get that legally it's different, but when ordinary people (like me) read "Melvin exited these position", they take it to mean "Melvin accepted the loss and gave up", which is in turn seen as implying "they no longer hold said positions". If Melvin bought and re-shorted all their shares at a similar price, then to many, many people, that's a legal distinction without a material difference. It's not "lying" technically, but it's pedantically misleading enough to be pretty darn close to lying for those of us asking the question. So when people question the veracity of the first statement, they're really wondering about the others too. Basically, my point is: if your rebuttal to the question of "did they lie?" is "no, that's preposterous, it would be a death sentence for the firm", then your answer might be correct technically as to the literal meaning of the question, but you've missed the spirit of what was being asked.
lc3sim 6y ago
> Okay as soon as I read this I knew I shouldn't be expecting much, but... There is no need for you to get feisty over an comment that I (who seems like someone you disagree with) posted on the internet. Perhaps this is a point where you can self-reflect on how you articulate yourself. Please understand that I don't care anymore. I don't care if you think I'm out of line. Yes, I read and understand your comment. I just don't engage with people that have bad communication skills. I am only writing this in an attempt to make you a better person.

fractionalhare 6y ago

There is also no evidence they singlehandedly shorted over 100% of GME stock. All of these claims and rumors unravel when you demand evidence. They might make sense if you assume their circular dependencies, but it's a house of cards.