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I don't think it's fair to call the GME short squeeze a scam, it was just a community taking advantage of the mathematics at the time. There wasn't any misleadi

I don't think it's fair to call the GME short squeeze a scam, it was just a community taking advantage of the mathematics at the time. There wasn't any misleading information or false promises, just people FOMO'ing in with the bubble. EDIT: Also GME is at 240, it's not even a short squeeze anymore it's just bizarre

throwaway8581 6y ago
The small kernel of truth at the heart of it makes that much better of a scam. A pump and dump works better if in the pump stage, you have a good sounding reason.
PragmaticPulp 6y ago
Did you see the posts on WSB and /r/stocks about the claimed AI model that predicted the price would go to $100K? The original short squeeze narrative wasn’t really honest or accurate in the way it was presented. It was the narrative and the hype that drove the price up, combined with some gamma squeeze. The narrative about the “Mother Of All Squeezes” as they keep referring to it is not accurate.
- penagwin 6y ago
  I guess but then again there's almost 10 million people now on WSB - and people can say anything. I'm not sure how this is different from say bitcoin, where I've heard estimates of "100k by the end of the year" since 2016
  - PragmaticPulp 6y ago
    You’re exactly right. Bitcoin investors make their money by convincing people to buy Bitcoin and never sell it (HODL). Before anyone claims it’s the same for stocks: It’s not. Stocks are an actual claim on underlying businesses, their cash flows, IP, and their assets. Bitcoin’s attraction is that it has no underlying fundamentals to compare against, so proponents can say it’s going to whatever price they want and no one can point out how silly that is. As long as people continue buying, the price goes up. Why are people buying? Because the price goes up.
    - scsilver 6y ago
      Yeah but these bitcoin HOLDrs are also convincing JP Morgan, BNY Melon. Surely these professional financiers aren't unsophisticated ponzi scheme victims? https://www.wsj.com/articles/bitcoin-to-come-to-america-s-oldest-bank-bny-mellon-11613044810b https://www.wsj.com/articles/bitcoin-to-come-to-america-s-ol... https://www.bloomberg.com/news/articles/2021-02-25/investors-could-add-up-to-1-of-bitcoin-to-mix-jpmorgan-says https://www.bloomberg.com/news/articles/2021-02-25/investors...
    - panarky 6y ago
      > Stocks are an actual claim on underlying businesses, their cash flows, IP, and their assets. This is not true. If you buy a share of GOOG, you have zero claim on any of Alphabet's cash flows or assets. The company doesn't pay a dividend and doesn't expect to pay a dividend in the future. So there's no income potential. There is no scenario under which you can convert your share into any of the company's intellectual property or physical assets. Your share doesn't even give you the right to vote on anything. There is only one thing you can do with your share, and that's sell it to someone else. So the only conceivable purpose in buying GOOG stock is the hope you can sell it to someone else for more than you paid.
  - neutronicus 6y ago
    GME is the example I chose above, but Bitcoin works just as well

throwaway8581 6y ago

The small kernel of truth at the heart of it makes that much better of a scam. A pump and dump works better if in the pump stage, you have a good sounding reason.

PragmaticPulp 6y ago

Did you see the posts on WSB and /r/stocks about the claimed AI model that predicted the price would go to $100K? The original short squeeze narrative wasn’t really honest or accurate in the way it was presented. It was the narrative and the hype that drove the price up, combined with some gamma squeeze. The narrative about the “Mother Of All Squeezes” as they keep referring to it is not accurate.

penagwin 6y ago
I guess but then again there's almost 10 million people now on WSB - and people can say anything. I'm not sure how this is different from say bitcoin, where I've heard estimates of "100k by the end of the year" since 2016
- PragmaticPulp 6y ago
  You’re exactly right. Bitcoin investors make their money by convincing people to buy Bitcoin and never sell it (HODL). Before anyone claims it’s the same for stocks: It’s not. Stocks are an actual claim on underlying businesses, their cash flows, IP, and their assets. Bitcoin’s attraction is that it has no underlying fundamentals to compare against, so proponents can say it’s going to whatever price they want and no one can point out how silly that is. As long as people continue buying, the price goes up. Why are people buying? Because the price goes up.
  - scsilver 6y ago
    Yeah but these bitcoin HOLDrs are also convincing JP Morgan, BNY Melon. Surely these professional financiers aren't unsophisticated ponzi scheme victims? https://www.wsj.com/articles/bitcoin-to-come-to-america-s-oldest-bank-bny-mellon-11613044810b https://www.wsj.com/articles/bitcoin-to-come-to-america-s-ol... https://www.bloomberg.com/news/articles/2021-02-25/investors-could-add-up-to-1-of-bitcoin-to-mix-jpmorgan-says https://www.bloomberg.com/news/articles/2021-02-25/investors...
  - panarky 6y ago
    > Stocks are an actual claim on underlying businesses, their cash flows, IP, and their assets. This is not true. If you buy a share of GOOG, you have zero claim on any of Alphabet's cash flows or assets. The company doesn't pay a dividend and doesn't expect to pay a dividend in the future. So there's no income potential. There is no scenario under which you can convert your share into any of the company's intellectual property or physical assets. Your share doesn't even give you the right to vote on anything. There is only one thing you can do with your share, and that's sell it to someone else. So the only conceivable purpose in buying GOOG stock is the hope you can sell it to someone else for more than you paid.
- neutronicus 6y ago
  GME is the example I chose above, but Bitcoin works just as well