4 ms·

> Now, if[2], say 150% of the shares are held by buy-and-forget investors, who won't sell, regardless of where the price goes, a short squeeze is possible That

by rualca 6y ago

> Now, if[2], say 150% of the shares are held by buy-and-forget investors, who won't sell, regardless of where the price goes, a short squeeze is possible That's precisely the whole premise of gamestop's rally. It's weird why you accuse those who state the same as you as being "morons" just for pointing precisely the same fact that you've just pointed out. > The thing is, when GME goes to some ridiculous valuation like $300, some of those buy-and-forget investors may be inclined to take their money, and sell. Think for a second: Don't you think that it might just be because of that why "hold" and "diamond hands" is repeated ad-nauseum by those who rally behind the short squeeze? Perhaps those "morons" might have a point, right?

rspeele 6y ago
It's the prisoner's dilemma playing out with millions of participants. Sure, if everybody holds, there's nobody to buy shares from. But it just takes some defectors to sell and take the sure profits leaving the rest as bag-holders. And whether you collude or defect, you'd still tell others to keep holding, we're all taking down the hedgies together, whatever.
- rualca 6y ago
  > Sure, if everybody holds, there's nobody to buy shares from. Not really. For your belief to have any basis, you'd need to believe that the whole world was comprised of either WSB-blend of redditors or hedge fund shorters, which is a highly silly assumption. > But it just takes some defectors to sell You're somehow assuming that a hand-full of single- or double-digit stock portfolio retail investors are able to manipulate the stock price by selling their residual position.
  - rspeele 6y ago
    I think we're talking past each other. I'm saying that the reddit-power short squeeze to-the-moon fantasy is a fantasy because the market is composed of many participants and lots of them will choose to sell at a price that's profitable, but not astronomical.
    - rualca 6y ago
      It seems clear that you don't have much in the sense of a context regarding what the WSB crowd does or thinks or days. You're talking about "fantasy" about wins regarding a community renowned for posting screenshots of stock market losses under the premise of "loss porn". You're also talking about the possibility of losing money while talking about a phenomenon with a highly emotional and defiant tone, with multiple and reiterating and recurrent threads about how they don't care if they lose money or withstand massive losses if that means they have a shot at screwing hedge funds and their blatantly manipulative tactics. You're talking about the risk of losses on investments from a community where "exit strategy" is a kin to an inside joke. In essence, you're trying to find an explanation to a social and political event through the optics of basic conservative textbook investment principles, and your conclusion is that nothing fits your personal explanation.
      - rspeele 6y ago
        I think the political side of it "screwing hedge funds" is a bunch of BS. It's about as real as Bitcoin being for "enabling worldwide payments free from censorship". It's a nice story but the big price swings are driven by people trying to get rich quick. And hey, more power to them, nothing wrong with trying to get rich quick. Diamond hands might force short sellers to pay high prices to cover. But they pay those high prices to the people who sell, not to the people holding. Those sellers are the real winners -- well, them and anybody who shorts it again at the peak. Are they other hedge funds? Retail investors with "paper hands"? Who knows. All that's obvious to me is that if you're the last to sell, the only person you succeeded in screwing over is yourself.
        rualca 6y ago
        > I think the political side of it "screwing hedge funds" is a bunch of BS. You're free to ignore or downplay whatever facts you'd like, but it takes a lot of will power to turn a blind eye to the political and protest aspect of gamestop's stock purchases. You're talking about a bunch of small WSB-like retail investors who purchase half a dozen stocks with their disposable cash because they feel that contributes to evil hedge funds of the likes of Melvin Capital to lose half their cash on their manipulative shorts. You're talking about people who look at gamestop's stock as a high-risk investment where the payoff is not cash but screwing big financial companies out of their cash. It's like you're watching a parade or a protest march and you're there wondering why all those idiots are just standing there instead of running to win the race. The point of a protest march is not to ensure that your everyday flow stays neatly predictable, is it?
vkou 6y ago
I mean, of course they have a point. Some of them are going to win. Some of them have won big. The thing is, I don't think the winners are mostly getting rich off the backs of short sellers. They are getting rich off the backs of other retail investors, most of whom are losing money, because they buy in at $220, hold through $300, and then diamond hands the drop to $50. I understand why people with an exit plan are screaming at everyone else to hold. They need everyone else to hold, so that their exit pays off. This is why I assume they are spreading FUD, and misinformation about how short sales work.
- rualca 6y ago
  > The thing is, I don't think the winners are mostly getting rich off the backs of short sellers. I don't think your definition of winners applies here, because for some this isn't really about making a quick buck. There's a whole class of WSB-based stock purchasers who buy/bought stock in protest, and don't care at all if they lose 200$-2000$ in this as long as they see hedge funds hemorrhaging cash. For them, winning is seeing the likes of Melvin Capital wasting half of their cash on a failed short. https://edition.cnn.com/2021/01/31/investing/melvin-capital-reddit-gamestop/index.html https://edition.cnn.com/2021/01/31/investing/melvin-capital-... And that's something they don't mind paying 2000$ to see.
  - vkou 6y ago
    > I don't think your definition of winners applies here, because for some this isn't really about making a quick buck. There's a whole class of WSB-based stock purchasers who buy/bought stock in protest, and don't care at all if they lose 200$-2000$ in this as long as they see hedge funds hemorrhaging cash. That class of WSB should open their eyes and realize that hedge funds on the long side of the trades aren't hemmorhaging cash. Those funds are happily taking WSB cash, and laughing all the way to the bank. As a form of social protest, giving your money to a hedge fund seems to be an odd one. For some mysterious reason, though, the WSB narrative is that all the hedge funds are on the short side of these trades. Again, no proof is given for this statement, it's just a magical incantation that the tribe keeps repeating. ... Or, it's something that people hoping to get rich from a pump and dump keep repeating, so that bigger fools drive the stock price up for them, and they can cash out. If I were one of those people, that's what I'd be doing.

by rualca 6y ago

rspeele 6y ago

It's the prisoner's dilemma playing out with millions of participants. Sure, if everybody holds, there's nobody to buy shares from. But it just takes some defectors to sell and take the sure profits leaving the rest as bag-holders. And whether you collude or defect, you'd still tell others to keep holding, we're all taking down the hedgies together, whatever.

rualca 6y ago
> Sure, if everybody holds, there's nobody to buy shares from. Not really. For your belief to have any basis, you'd need to believe that the whole world was comprised of either WSB-blend of redditors or hedge fund shorters, which is a highly silly assumption. > But it just takes some defectors to sell You're somehow assuming that a hand-full of single- or double-digit stock portfolio retail investors are able to manipulate the stock price by selling their residual position.
- rspeele 6y ago
  I think we're talking past each other. I'm saying that the reddit-power short squeeze to-the-moon fantasy is a fantasy because the market is composed of many participants and lots of them will choose to sell at a price that's profitable, but not astronomical.
  - rualca 6y ago
    It seems clear that you don't have much in the sense of a context regarding what the WSB crowd does or thinks or days. You're talking about "fantasy" about wins regarding a community renowned for posting screenshots of stock market losses under the premise of "loss porn". You're also talking about the possibility of losing money while talking about a phenomenon with a highly emotional and defiant tone, with multiple and reiterating and recurrent threads about how they don't care if they lose money or withstand massive losses if that means they have a shot at screwing hedge funds and their blatantly manipulative tactics. You're talking about the risk of losses on investments from a community where "exit strategy" is a kin to an inside joke. In essence, you're trying to find an explanation to a social and political event through the optics of basic conservative textbook investment principles, and your conclusion is that nothing fits your personal explanation.
    - rspeele 6y ago
      I think the political side of it "screwing hedge funds" is a bunch of BS. It's about as real as Bitcoin being for "enabling worldwide payments free from censorship". It's a nice story but the big price swings are driven by people trying to get rich quick. And hey, more power to them, nothing wrong with trying to get rich quick. Diamond hands might force short sellers to pay high prices to cover. But they pay those high prices to the people who sell, not to the people holding. Those sellers are the real winners -- well, them and anybody who shorts it again at the peak. Are they other hedge funds? Retail investors with "paper hands"? Who knows. All that's obvious to me is that if you're the last to sell, the only person you succeeded in screwing over is yourself.
      - rualca 6y ago
        > I think the political side of it "screwing hedge funds" is a bunch of BS. You're free to ignore or downplay whatever facts you'd like, but it takes a lot of will power to turn a blind eye to the political and protest aspect of gamestop's stock purchases. You're talking about a bunch of small WSB-like retail investors who purchase half a dozen stocks with their disposable cash because they feel that contributes to evil hedge funds of the likes of Melvin Capital to lose half their cash on their manipulative shorts. You're talking about people who look at gamestop's stock as a high-risk investment where the payoff is not cash but screwing big financial companies out of their cash. It's like you're watching a parade or a protest march and you're there wondering why all those idiots are just standing there instead of running to win the race. The point of a protest march is not to ensure that your everyday flow stays neatly predictable, is it?

vkou 6y ago

I mean, of course they have a point. Some of them are going to win. Some of them have won big. The thing is, I don't think the winners are mostly getting rich off the backs of short sellers. They are getting rich off the backs of other retail investors, most of whom are losing money, because they buy in at $220, hold through $300, and then diamond hands the drop to $50. I understand why people with an exit plan are screaming at everyone else to hold. They need everyone else to hold, so that their exit pays off. This is why I assume they are spreading FUD, and misinformation about how short sales work.

rualca 6y ago
> The thing is, I don't think the winners are mostly getting rich off the backs of short sellers. I don't think your definition of winners applies here, because for some this isn't really about making a quick buck. There's a whole class of WSB-based stock purchasers who buy/bought stock in protest, and don't care at all if they lose 200$-2000$ in this as long as they see hedge funds hemorrhaging cash. For them, winning is seeing the likes of Melvin Capital wasting half of their cash on a failed short. https://edition.cnn.com/2021/01/31/investing/melvin-capital-reddit-gamestop/index.html https://edition.cnn.com/2021/01/31/investing/melvin-capital-... And that's something they don't mind paying 2000$ to see.
- vkou 6y ago
  > I don't think your definition of winners applies here, because for some this isn't really about making a quick buck. There's a whole class of WSB-based stock purchasers who buy/bought stock in protest, and don't care at all if they lose 200$-2000$ in this as long as they see hedge funds hemorrhaging cash. That class of WSB should open their eyes and realize that hedge funds on the long side of the trades aren't hemmorhaging cash. Those funds are happily taking WSB cash, and laughing all the way to the bank. As a form of social protest, giving your money to a hedge fund seems to be an odd one. For some mysterious reason, though, the WSB narrative is that all the hedge funds are on the short side of these trades. Again, no proof is given for this statement, it's just a magical incantation that the tribe keeps repeating. ... Or, it's something that people hoping to get rich from a pump and dump keep repeating, so that bigger fools drive the stock price up for them, and they can cash out. If I were one of those people, that's what I'd be doing.