5 ms·

Markets measure the tiny fraction of buyers and sellers on a given day and ignore the super majority of holders. It almost feels like length of ownership should

by dd36 4y ago

Markets measure the tiny fraction of buyers and sellers on a given day and ignore the super majority of holders. It almost feels like length of ownership should be more determinative of price movements than anything else. If long-term holders start selling, it’s concerning.

rcme 4y ago
> Markets measure the tiny fraction of buyers and sellers on a given day and ignore the super majority of holders. Not really. The decision to not sell and to not buy is itself reflective of the price. If a stock is super cheap, people will buy. If the stock is priced fairly or overpriced, few people will buy. Same goes for selling.
somethoughts 4y ago
It almost feels like length of ownership should be more determinative of price movements than anything else. >> Length of ownership AND relatedly original cost basis. I think a lot of stocks can seem to defy gravity (i.e. high PE and/or high P/FCF) when the founder and the early investors HODL stocks. At $0.0001 per share, HODLing (in say TSLA, META, MSFT, BTC) is easy since there is/was no upfront capital paid in and holding has essentially no cost basis - so there's no need to act like rationally like a later stage investor. >> Founders and early investors can easily own up to 30-50% of the company and really its only when the founder retires/starts diversifying and the founder and early investors start to unload - does price discovery occur on the entirety of the shares outstanding.[1][2][3] [1] Mark Zuckerberg Sold Facebook Stock Nearly Every Weekday Last Year For Almost 11 Months https://www.forbes.com/sites/rachelsandler/2022/01/06/mark-zuckerberg-sold-facebook-stock-nearly-every-weekday-last-year-for-almost-11-months/?sh=5570993f3f71 https://www.forbes.com/sites/rachelsandler/2022/01/06/mark-z... [2] https://techcrunch.com/2013/02/15/zuckerberg-now-owns-29-3-percent-of-facebook-representing-18-billion/ https://techcrunch.com/2013/02/15/zuckerberg-now-owns-29-3-p... [2] Amazon founder Jeff Bezos decreased his stake to 24% from 42% in the first nine years after IPO.
- dd36 4y ago
  Agree. I think that fully explains all of TSLA’s movement. Mostly HODL but then Elon had to sell into light purchasing. Since he stopped, purchasing again outpaces selling so we get a steady rise.

by dd36 4y ago

rcme 4y ago

> Markets measure the tiny fraction of buyers and sellers on a given day and ignore the super majority of holders. Not really. The decision to not sell and to not buy is itself reflective of the price. If a stock is super cheap, people will buy. If the stock is priced fairly or overpriced, few people will buy. Same goes for selling.

somethoughts 4y ago

It almost feels like length of ownership should be more determinative of price movements than anything else. >> Length of ownership AND relatedly original cost basis. I think a lot of stocks can seem to defy gravity (i.e. high PE and/or high P/FCF) when the founder and the early investors HODL stocks. At $0.0001 per share, HODLing (in say TSLA, META, MSFT, BTC) is easy since there is/was no upfront capital paid in and holding has essentially no cost basis - so there's no need to act like rationally like a later stage investor. >> Founders and early investors can easily own up to 30-50% of the company and really its only when the founder retires/starts diversifying and the founder and early investors start to unload - does price discovery occur on the entirety of the shares outstanding.[1][2][3] [1] Mark Zuckerberg Sold Facebook Stock Nearly Every Weekday Last Year For Almost 11 Months https://www.forbes.com/sites/rachelsandler/2022/01/06/mark-zuckerberg-sold-facebook-stock-nearly-every-weekday-last-year-for-almost-11-months/?sh=5570993f3f71 https://www.forbes.com/sites/rachelsandler/2022/01/06/mark-z... [2] https://techcrunch.com/2013/02/15/zuckerberg-now-owns-29-3-percent-of-facebook-representing-18-billion/ https://techcrunch.com/2013/02/15/zuckerberg-now-owns-29-3-p... [2] Amazon founder Jeff Bezos decreased his stake to 24% from 42% in the first nine years after IPO.

dd36 4y ago
Agree. I think that fully explains all of TSLA’s movement. Mostly HODL but then Elon had to sell into light purchasing. Since he stopped, purchasing again outpaces selling so we get a steady rise.