3 ms·

Can you please explain a bit more? Is "NVDA" the NVIDIA ticker? What do the 400 basis points mean? Who is paying for, and who is getting free drinks?

• lofaszvanitt 2y ago
  It's a joke. Claude will explain it to you.
• benreesman 2y ago
  If you play perfect basic strategy on a six card shoe at the Wynn your odds are a matter of some dispute but a reasonable consensus figure might be on the order of 1% to the house, or a hundred basis points. Only professionals can maintain perfect basic 21 for any serious stretch, a tourist who keeps their wits is probably at something like a 4% disadvantage, or 400 bps. I was making fun of people who sit down at a table with Citadel as their counterparty and don’t consider it gambling.
  • greyw 2y ago
    The bid ask spread is not even 10 basispoints for your regular stocks out there. In fact for NVDA right now it's less than 1 basispoint. Anyhow the comparison doesnt make a whole lot of sense
    • benreesman 2y ago
      There are a lot of different forms of Fama EMH, but even under very weak versions of it an uninformed speculator has the uniform geometric Brownian motion of holding an equity pretty much pegged at 0.5, expected value is par in the absence of an arbitrage opportunity. This is eliding fees and other friction, and eliding the market microstructure in a stand price-time precedence setting. People (uninformed speculators) routinely think they have alpha by virtue of knowledge that was priced into a Citadel regression days, weeks, or months before they obtained it. Uninformed speculators are almost by definition gamblers, and it’s pretty much a set cover between gamblers and arbitrageurs. I wasn’t making fun of arbitrageurs. P.S. Equities on Island and ARCA are decimalized on the consolidated tape, lit venues can’t have a spread less than one penny.
      • kqr 2y ago
        I'm surprised you're getting downvoted. You're absolutely right -- the expectation less fees from holding a stock a short period is equal to the risk-free interest rate. Over longer horizons it gets more complicated because compounding, but it's not obviously in favour of the speculator, even though it has historically turned out that way.
        • benreesman 2y ago
          I’ve been told that I tend to “TED Talk” / lecture, and on re-reading I can see why someone might get that vibe. It isn’t my intention to condescend, I know a bit about this stuff and try to make informative comments when the opportunity arises. Thank you for having my back on the substantial accuracy of the comment.
      • benreesman 2y ago
        Post/post script. It is in fact a time when HODL the Magnificent Seven has been a great trade for years: it hasn’t been this easy to turn money into more money since the 1920s. But that’s a combination of sanctioned monopoly fraud and wild levels of stimulus: in the last decade we basically transferred half of all wealth from working people to Boomer 401ks, and the New Wall St guys got a pretty hefty cut. NVIDIA has some very smart people, but they don’t fab EUV wafers and they don’t do whatever it is where it’s ok for a dorky guy in a leather jacket to sign a girl’s breasts. The price of the stock is “supported”.
        • greyw 2y ago
          > NVIDIA has some very smart people, but they don’t fab EUV wafers and they don’t do whatever it is where it’s ok for a dorky guy in a leather jacket to sign a girl’s breasts. Why does it matter whether NVDA fabricates wafers or not? It's not their business model. The dorky guy sells something all of the mag7 and more want desperately. > The price of the stock is “supported”. Supported by gigantic growing cashflows. Did you ever valuate/analyze a business? You know people don't put random numbers on the stock price (looking at longer timewindows obviously).
      • 2y ago
• seanhunter 2y ago
  A basis point is 1% of 1%, so 400bps is 4%.