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If you actually believe that it's "artificial", then sure. There are hundreds of billions of dollars looking for situations like this, if the money managers act

If you actually believe that it's "artificial", then sure. There are hundreds of billions of dollars looking for situations like this, if the money managers actually believed the absurd conspiracy theories. Many HN visitors seems foolishly naive in the belief that a couple of players make the market (clearly because they have a personal interest. Never before have I seen such an interest in the stock market, or this feeling of profound victimization because it doesn't always move in one direction), when there are tens of thousands of very large players in the market, all of which want to screw every other player to the greatest extent possible. If AAPL were underpriced, there would be enormous buy pressure to the point that it is no longer underpriced. (Sidenote: Among one of the loudest proponents of the conspiracy theory is John Gruber, who today proclaimed that $500 proved it. Only the article he linked actually said $550. It turns out that there are psychological pivot points that are often hit nearing close. The market is made by people, and people understand and gravitate to emotional numbers)

ChuckMcM 14y ago
Whenever someone pitches me some 'sure fire' deal that will get me 12 - 15% returns for sure, I ask the obvious question which is "Why did all the rich people who have hundreds of people on staff searching to find these deals pass you by so that you could pitch me?" Kind of fun to watch them try to wriggle through the pitch.
- ajaymehta 14y ago
  Clearly, you should be skeptical of anyone offering a "surefire deal" on anything. Skepticism is healthy and good. But suppose the founders of Airbnb came to you when they were raising angel money. I'm sure they were convinced at that time (maybe objectively irrationally) that investing in their company was a "surefire deal." They were passed on by Fred Wilson (the equivalent of your "rich person with hundreds of staff"), among countless others I'm sure. By this point, their returns are certainly far more than 12-15%.
  - ChuckMcM 14y ago
    And there risk is higher than 'surefire' :-) I've invested in, been part of, and advised startups so I understand those risks. And, for example when FB stock dropped to 17 I bought a chunk and put a limit order to sell it at $28 (I ended up getting it at 18 and my limit order was purchase + $10) But again, it was a lot riskier than "surefire". When people guarantee results without risk, that is when I say "oh really? and just how do you do that?" There are lots of ideas, but the tried and true one is 'Ponzi Scheme' :-)
    - ajaymehta 14y ago
      Alright -- I think I understand your initial point now. Definitely agree with everything you just said. Thanks for elaborating.
ajaymehta 14y ago
You might think many HN visitors are "foolishly naive," and I would respond no: HN is instead full of too many people who believe that they're somehow less naive than everyone else. I'm not an experienced trader, but I know about the efficient-markets hypothesis and that analyses such as this one are often "priced-in" to a certain extent. But when the market opens on Tuesday, AAPL is going to go up or down. "Underpriced" is a measure that can only be fully assessed in retrospect -- if AAPL goes up on Tuesday, it was underpriced tonight. You're right that there are tens of thousands of large players with billions, all trying to screw each other over. I believe that 100%. But there's still room in there for Joe Normal to buy some AAPL stock. If his hunch is correct, the stock will go up in value and he'll make money. Individual people still make money trading stocks, and it's "naive" to think it's solely based on luck.
- corresation 14y ago
  It shall be seen what happens on Tuesday. I am not discounting that there are unknowns that will surprise the market. In that sense the market is like betting, albeit based upon hints and rumors and misinformation. The market is speculative. A lot of people are speculating that Apple's best days are past them -- which is how $9 billion worth of AAPL was sold in the $500 range on Friday -- while a lot of people are speculating that it is still a growth company. Those competing interests set the market price (and FWIW those who bought at $700 -- if they actually still believed in that entrance price, would be doubling down right now for dollar-cost averaging, which itself would pull the price up). What I said above is not at all what the conspiracy theory is, which is where everyone apparently thinks everything is fantastic and it's going to shoot to the moon and there is no uncertainty or risk, but for options reasons everyone is looking the other way for a couple of weeks/months and letting it slide because something-something-options. Market manipulation absolutely happens, and it happens a lot. However it generally targets low volume, low cap, low interest equities, or less common instruments like resource futures. It would be incredibly expensive to manipulate AAPL, it being one of the most watched, most traded equities.

ChuckMcM 14y ago

Whenever someone pitches me some 'sure fire' deal that will get me 12 - 15% returns for sure, I ask the obvious question which is "Why did all the rich people who have hundreds of people on staff searching to find these deals pass you by so that you could pitch me?" Kind of fun to watch them try to wriggle through the pitch.

ajaymehta 14y ago
Clearly, you should be skeptical of anyone offering a "surefire deal" on anything. Skepticism is healthy and good. But suppose the founders of Airbnb came to you when they were raising angel money. I'm sure they were convinced at that time (maybe objectively irrationally) that investing in their company was a "surefire deal." They were passed on by Fred Wilson (the equivalent of your "rich person with hundreds of staff"), among countless others I'm sure. By this point, their returns are certainly far more than 12-15%.
- ChuckMcM 14y ago
  And there risk is higher than 'surefire' :-) I've invested in, been part of, and advised startups so I understand those risks. And, for example when FB stock dropped to 17 I bought a chunk and put a limit order to sell it at $28 (I ended up getting it at 18 and my limit order was purchase + $10) But again, it was a lot riskier than "surefire". When people guarantee results without risk, that is when I say "oh really? and just how do you do that?" There are lots of ideas, but the tried and true one is 'Ponzi Scheme' :-)
  - ajaymehta 14y ago
    Alright -- I think I understand your initial point now. Definitely agree with everything you just said. Thanks for elaborating.

ajaymehta 14y ago

You might think many HN visitors are "foolishly naive," and I would respond no: HN is instead full of too many people who believe that they're somehow less naive than everyone else. I'm not an experienced trader, but I know about the efficient-markets hypothesis and that analyses such as this one are often "priced-in" to a certain extent. But when the market opens on Tuesday, AAPL is going to go up or down. "Underpriced" is a measure that can only be fully assessed in retrospect -- if AAPL goes up on Tuesday, it was underpriced tonight. You're right that there are tens of thousands of large players with billions, all trying to screw each other over. I believe that 100%. But there's still room in there for Joe Normal to buy some AAPL stock. If his hunch is correct, the stock will go up in value and he'll make money. Individual people still make money trading stocks, and it's "naive" to think it's solely based on luck.

corresation 14y ago
It shall be seen what happens on Tuesday. I am not discounting that there are unknowns that will surprise the market. In that sense the market is like betting, albeit based upon hints and rumors and misinformation. The market is speculative. A lot of people are speculating that Apple's best days are past them -- which is how $9 billion worth of AAPL was sold in the $500 range on Friday -- while a lot of people are speculating that it is still a growth company. Those competing interests set the market price (and FWIW those who bought at $700 -- if they actually still believed in that entrance price, would be doubling down right now for dollar-cost averaging, which itself would pull the price up). What I said above is not at all what the conspiracy theory is, which is where everyone apparently thinks everything is fantastic and it's going to shoot to the moon and there is no uncertainty or risk, but for options reasons everyone is looking the other way for a couple of weeks/months and letting it slide because something-something-options. Market manipulation absolutely happens, and it happens a lot. However it generally targets low volume, low cap, low interest equities, or less common instruments like resource futures. It would be incredibly expensive to manipulate AAPL, it being one of the most watched, most traded equities.