Some smart person explain the GME (gamestop) thing

[Benny Profane]

Oh, the irony.

https://www.vice.com/en/article/qjpn...re-the-product

[JimmyCarter]

FIFY

Not private equity, hedge funds. PE doesn’t do short selling, private stock can’t be shorted.

[BmillsSkier]

So wind shear is impacting GME volatility?

Absolutely. You can make a connection between just about anything and the activity of GME.

What we should really be investigating is who shorted the Killington outpost of TGR?

[huckbucket]

Feels like we need input from the "loafer cam®" for an in-the-trenches perspective.

[Dantheman]

FIFY

No, the games PE firms engage in are completely different from short selling.

[JimmyCarter]

Absolutely. You can make a connection between just about anything and the activity of GME.

What we should really be investigating is who shorted the Killington outpost of TGR?

I’m not saying it was Greg, but...

[Cono Este]

“Sell when you can, not when you have to”


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[MontuckyFried]

No, the games PE firms engage in are completely different from short selling.

My bad. Twas a snarky swing and a miss. Doh!

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[Cono Este]

Short selling needs to be illegal, period.

Is there an example where it helps the business?

It’s essential. Stocks would be way over pumped and the average retail investor hosed much more frequently.

The real purpose of short selling is to hedge warrants and options that companies issue. If you can’t hedge it, then there is no market for that.

Most short interest is not speculative, it’s a hedge against something. Professionals don’t gamble like everyone thinks. That’s why they are called pros.


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[gravitylover]

What's the difference between warrants and options?

[schuss]

Yeah, the problem isn't shorting, it's shorting more than 100% of stock and doing it on margin.

[JimmyCarter]

What's the difference between warrants and options?

Primary difference is warrants are arrangements between the investor and company, options are arrangements between investors.

[Cono Este]

What's the difference between warrants and options?

Companies issue warrants. They usually have the same characteristics as listed options, I.e a premium, strike price, length of time etc. they usually get sold away under valued though. Warren buffets buys his, then either shorts the stock, or sells listed options against them, and locks in a lot of theoretical edge. That’s where the big guys get free money.


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[Core Shot]

I saw this on Twitter and it made me laugh.

"Wall Street clearly underestimated a generation raised on highly coordinated Friday night World of Warcraft raids." Which is as probably as close to the truth as anything else.

Classic!

GME taken down by LEEEEEROYYYY JENNNNNKINS

[Skidog]

It’s essential. Stocks would be way over pumped and the average retail investor hosed much more frequently.

The real purpose of short selling is to hedge warrants and options that companies issue. If you can’t hedge it, then there is no market for that.

Most short interest is not speculative, it’s a hedge against something. Professionals don’t gamble like everyone thinks. That’s why they are called pros.


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id tend to agree that shorts are part of the game, just limit them.

[4matic]

Without shorts there is less future buying power and broad market becomes more vulnerable to sharp correction.

[gravitylover]

Primary difference is warrants are arrangements between the investor and company, options are arrangements between investors.

Companies issue warrants. They usually have the same characteristics as listed options, I.e a premium, strike price, length of time etc. they usually get sold away under valued though. Warren buffets buys his, then either shorts the stock, or sells listed options against them, and locks in a lot of theoretical edge. That’s where the big guys get free money.

Thanks guys

[4matic]

Anyone sleeping the weekend on GME has far more fortitude than I ever will. Who knows what gets said or done on the weekend to blow the whole thing up.

[gravitylover]

I was wondering if I should get in on a couple of these others that are only strong because of the chatter but with the weekend and the discussions that are bound to be going on I'm not feeling like playing the game is a wise move today

[Skidog]

Anyone sleeping the weekend on GME has far more fortitude than I ever will. Who knows what gets said or done on the weekend to blow the whole thing up.

the reddit masses all claim the be HOLDING....how true that will be is yet to be seen, but....Keith Gill is diamond hands.

[rod9301]

And someone swiped right on your 100 shares. Bought it and is now up 140. Ain't the market great?

Yep, not unhappy though. I'm regularly short a few bucks, now dash, amrs, tesla( a lot more than a few bucks), and of course the us stock market, but that's to hedge my oil and emerging stocks.

My plan is to ride oil for a while for dividends, then when the market is down, go more into emerging or whatever's cheap at the time.


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[Benny Profane]

Haha. She's an "expert", and you're not.

https://twitter.com/IsicaLynn/status...208348673?s=20

[Bunion 2020]

Opinion: The GameStop chaos may be a ‘bubble,’ but what does that actually mean?

Opinion by Maureen O'Hara
Jan. 29, 2021 at 6:00 a.m. MST


Maureen O’Hara is the Purcell Professor of Finance at Cornell University and a former president of the American Finance Association.

The market gyrations involving GameStop’s 64-fold rise in price since August are certainly eye-opening. How a money-losing company whose stock previously traded less than 10 million shares a day can shoot up to trading 50 million-plus shares in a day — and cause the stock price of a completely unrelated but similarly named Australian company (GME Resources) to rise 50 percent on Thursday — is hard to reconcile with today’s uber-efficient high-frequency markets.

Media coverage routinely refers to GameStop’s price surge as a bubble. But what are financial bubbles — and what causes them? As I noted when writing about bubbles in 2008 in the Review of Financial Studies, the phenomenon had been around for centuries — in the 18th century, Scottish economist Adam Smith called it “overtrading.” But that doesn’t explain what starts a bubble in the first place. Plenty of economists, historians and others have tried.

The Swedish economist Knut Wicksell, in an observation that resonates today, argued in 1898 that bubbles are attributable to interest rates that are too low. In 1929 — we know what happened in the markets then — the Dutch economist historian N.W. Posthumus cited the entrance of nonprofessional buyers fueled by credit. In this view, today’s Federal Reserve and the Reddit crowd would seem natural culprits.

An alternative view in history is that bubbles can emerge if traders are rational but markets are irrational. The economist and historian Charles P. Kindleberger makes this argument in his classic 1978 book, “Manias, Panics, and Crashes: A History of Financial Crises.” What drives market irrationality, Kindleberger says, is the fallacy of composition: Each trader believes he can sell at a higher price, and if he can in fact do so, then it is rational for him to buy. But not everyone in the market can do that, so the market as a whole behaves irrationally.

A variant on this irrationality of the market theme underlies the “beauty contest” analogy offered in 1936 by the English economist John Maynard Keynes. He argued that individuals do not pick stocks based on what they think a firm is worth, but rather on what they think other people will think it is worth. (Has Keynes’s “beauty contest” morphed into today’s “chat room”?) In that description, each individual is acting rationally, but the market overall is not.

Short sellers in GameStop — mostly hedge funds that had been betting massively on the company’s stock to fall — had reportedly lost $23.6 billion as of Wednesday. They may find little consolation in the dictum often attributed to Keynes: “Markets can stay irrational longer than you can stay solvent.”

Then there is the explanation that says bubbles form when both irrational markets and irrational traders are at work. The notion that somehow markets are swept up in “manias” is still with us, but it has a long history. The English mathematician Isaac Newton, in addition to his many well-known accomplishments, was a disappointed investor in the trading company that become known for the South Sea Bubble of 1720. Newton confessed, “I can calculate the motions of heavenly bodies, but not the madness of people.”

Scottish writer Charles Mackay must have been having similar thoughts in 1841 when he published “Extraordinary Popular Delusions and the Madness of Crowds.” MacKay took a dim view of the intelligence of individual traders and an even dimmer view of the collective intelligence of the market: “Men, it is well said, think in herds. It will be seen that they go mad in herds, while they only recover their sense slowly, and one by one.”

Clearly, Mackay would have felt right at home reading about some of today’s market shenanigans. So, too, would Bernard Baruch, the famous Wall Street investor of the early 1900s, who quoted the poet Friedrich Schiller when he said, “Anyone taken as an individual is tolerably sensible and reasonable — as a member of a crowd, he at once becomes a blockhead.”

Are there bubbles? Are markets really irrational? Markets are generally very good at providing price discovery, so I am firmly in the camp that markets are rational. But history shows that individual asset prices can be swayed by collective trading driven by greed, fear or simply boredom. American economist Peter Garber, in “Famous First Bubbles,” concluded that the Dutch tulip bubble of 1636 “was no more than a meaningless winter drinking game, played by a plague-ridden population that made use of a vibrant tulip market.”

For those contemplating where the GameStop chaos ends, perhaps the best advice is to recall the German American economist Oskar Morgenstern’s dictum, “A thing is only worth what someone else will pay for it.”

.

[bennymac]

[Benny Profane]

Haha, this is fucking perfect. Peak Silicon Valley, indeed. What, no free UBER rides?

https://twitter.com/eliotwb/status/1...177119751?s=20