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my comment from 4 days ago: actually im glad you said this. this is the core problem with this WSB/RH/GME event. a certain percentage of people in WSB only wa
by kryogen1c 6y ago
my comment from 4 days ago:
actually im glad you said this. this is the core problem with this WSB/RH/GME event.
a certain percentage of people in WSB only want to light a pile of their money on fire for the sole purpose of bankrupting some hedge funds. they expect no returns and only want to cause pain to people with more money than them that they dont like.
another percentage of people (i think this group is much, much larger than the first) think bankrupting the short positions is gonna make them huge returns. they think theyre all david collectively fighting a goliath as the proletariat rises up. most of these people are sorely mistaken and will lose everything, but some will make money.
the RH trade halt (EDIT: only buying was halted, a "trade halt" technically means both) is allowing the shorts to unwind more gracefully, making the first group of people angry. theyre not getting their witchburning, or public execution, or lynching - however you want to frame it.
the problem is the second group of people think theyre being defrauded out of huge returns by an artificial exit from the short squeeze. these people are wrong to begin with. most of them were never going to make huge returns. even if they successfully bankrupted the shorts, most of them are left holding stock they bought for $100, $200, $300, or $400 a share (WSB was memeing share price was gonna go into the thousands) that is worth <$90. those people were always going to lose, they just didnt know it. but now they have a scape goat, even though they were on the wrong side of the trade to begin with.
- nemo44x 6y agoThe other big problem is these people are using their own money. The hedge funds are using other peoples money.
- betterunix2 6y agoNow the hedge funds are using WSB's money, because when those redditors lose money, that is who they are losing it to.
- nemo44x 6y agoRight - and there’s a big difference between not getting your quarterly bonus and not being able to make rent.
- unethical_ban 6y agoYou say "lynching" and "witchburning" as if hedge fund players are innocent, or their status is unknown.
- kryogen1c 6y ago> their status is unknown. it is to me. do hedge funds do something besides fulfill their fiduciary requirement of making their investors money?
- unethical_ban 6y agoThey make astronomical amounts of money gambling on the economy, claim that they are useful to society, and pay a lower tax rate than a janitor, welder, doctor, or actual contributor to society. Then have the audacity to be upset, and go on CNBC and bitch and moan about the ignorant retail investor, and wonder why anyone dislikes them.
- wcarron 6y agoI think what you're trying to say is that the metaphorical "lynching" is justified given the deleterious effects of hedge funds continued existence, correct?
- savanaly 6y agoI know that people probably regard this as hopelessly naive, but on the 1% chance that you were asking sincerely: hedge funds are a reliable mechanism to allocate capital efficiently, which leads to economic growth which leads to gestures expansively all of this.
- walleeee 6y agoI dont think your view is naive. I think people read statements like yours naively. Hedge funds reliably do what they are designed to do, as you say: funnel capital into the hands of people who will dump it back into multinational economic acceleration. Where I think you and I might disagree is whether that's a good thing.