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It’s not all Gen Z. I have heard from several friends who are older Gen X guys that they’ve done cash out refinancing to dump money into the stock market. The r
by throwaway9980 5y ago
It’s not all Gen Z. I have heard from several friends who are older Gen X guys that they’ve done cash out refinancing to dump money into the stock market. The reasoning is that they’d be idiots not to borrow at 2.5% and put it into stocks. Hard to argue with when the US stock market has a 100 year track record of producing 7% on average.
A couple weeks after hearing about this from one guy, his wife tells me that he made $80k on AMC today. It’s gone up another 3-4x from that day. No idea if he’s still in or not, but this kind of thing feels like the end of days of bubbles. It won’t end well.
- deleted 5y ago[deleted]
- an_opabinia 5y agoMost of the money a retail trader is making comes from another retail trader. Is a poker table a bubble? Another way to interpret the price is, “the most recent payout at the poker table.”
- PragmaticPulp 5y ago> A couple weeks after hearing about this from one guy, his wife tells me that he made $80k on AMC today. Speculative traders like to talk about their biggest wins, but they're generally quiet about losses. Sure, it's possible that one guy YOLOed everything into a single stock at just the right time, cashed out, and walked away. It's more common for these traders to make a lot of bad bets, then get excited when one of them pays off. The problem gets worse when these payoffs come in the form of black swan market events that the trader just happened to be on the right side of. Or maybe I'm wrong and the meme stonk trend will continue forever, making the gamblers wealthy while the rest of us lose out.
- Animats 5y agoSpeculative traders like to talk about their biggest wins, but they're generally quiet about losses. Um, yes. This is zero-sum. There have to be a lot of losers out there.
- gbasin 5y agoStock markets are not zero-sum. Derivatives markets would be, though
- KMag 5y agoDerivatives markets are zero-sum measured in currency, but few people/organizations have perfectly linear utility functions. Transferring risk from more risk averse people to less risk averse people is not necessarily zero-sum if the accounting is done in utility instead of currency.
- chollida1 5y agoI buy Microsoft at 10 and sell to you at 20. You then sell at 30. We have both won and clearly no one has lost. Cash equity Markets are not zero sum.
- simcop2387 5y agoWho did j sell to and who did You buy from?
- x4e 5y agoYou have not factored in the person that I sold it to for 30.
- gruez 5y agoIt depends on your perspective. The act of speculation is zero sum, but holding onto the stock and letting it appreciate isn't zero sum. Seeing how "speculative traders" are in it to make more than the 8% average (or whatever), we're probably talking about the former and not the latter.
- AcerbicZero 5y agoI’ve been on wsb for years and Ive seen more loss porn than gains up until relatively recently. I think the current stonks situation and folks involved are a bit more nuanced than you’re implying here, but I can certainly see how you might come to such a conclusion from the outside looking in.
- shiftpgdn 5y agoThe cultural shift of not posting “loss porn” on WSB is going to be the undoing. Well, the eternal September it’s been going through since this time last year has been a big contributor too.
- tomlagier 5y agoI'd guess that a lot of the WSB crowd has some exposure to crypto, which isn't doing so hot recently.
- WalterBright 5y agoI don't see how gamblers make you lose out.
- WalterBright 5y agoThere's no way to tell if stocks going up is a bubble or not. But if you never invest when stocks are going up, you'll never make money.
- elevenoh 5y agoThe meme stock thing is very different than the S&P in terms of state of the market. When denominator is M2 money supply, the stock market doesn't look bubbly at all..