Results 101 to 125 of 524
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01-28-2021, 12:19 PM #101
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01-28-2021, 12:20 PM #102
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01-28-2021, 12:24 PM #103Registered User
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01-28-2021, 12:25 PM #104
You left out one nuance. An actual "hedge" fund tends to hedge things so their risk is mostly capped. Now there are things calling themselves "hedge funds" because it's easy to say and rolls off the tongue easier than "unhedged funds." And the media are happy to call them all hedge funds, but these new hedge funds are a sort of bastardized prop trading firm who trade their own money and clients money. Real hedge funds with real investors are rather boring and don't like volatility because it's hard and expensive to hedge.
"timberridge is terminally vapid" -- a fortune cookie in Yueyang
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01-28-2021, 12:28 PM #105guy who skis
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01-28-2021, 12:30 PM #106
This place DEMANDS nuance.
I still call it The Jake.
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01-28-2021, 12:32 PM #107guy who skis
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01-28-2021, 12:35 PM #108
I can sum this up easily in laymen’s terms.
To invoke Gritty,
“They fucked around, and are finding out”.Forum Cross Pollinator, gratuitously strident
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01-28-2021, 12:41 PM #109
The Philadelphia Flyers' mascot Gritty has motivational quotes now?
That's next level.I still call it The Jake.
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01-28-2021, 12:46 PM #110
Ars just dropped a fun piece on this saga thus far:
The complete moron’s guide to GameStop’s stock roller coaster
https://arstechnica.com/gaming/2021/...oller-coaster/
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01-28-2021, 01:00 PM #111
So somebody explain to this boomer how the world, or the country, or the economy would be worse off if shorting was illegal. The standard argument is that short selling punishes poorly run or unprofitable companies and either forces them to improve or go bust, either way making the economy more efficient. But doesn't the market do that without short selling? The stock price goes down, the board fires the CEO and things turn around, or the company keeps losing money and eventually can't raise any more cash to pay its bills and goes belly up. Seems to me that the only thing that short sellers add is profit to them, if they gamble right, and that's money taken out of someone else's pocket. Short selling is an invitation to manipulate the market by driving down the price of stock. A short position, if it's big enough and public enough drives down the price even if the fundamentals are good.
My grandfather knew what to do with short sellers--line them up against a wall and shoot them. All the other capitalists too. He normally voted straight Socialist Worker but I think he would have voted for Bernie.
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01-28-2021, 01:04 PM #112
OG, I was under the impression that you and Woolley were the Greatest Generation?
Learning all kinds of stuff in here today.I still call it The Jake.
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01-28-2021, 01:04 PM #113
OG, short sellers help protect other investors with imperfect information from paying too much for a stock that is otherwise overvalued. In a perfect world it's a signal a stock price is too high.
At a fundamental level markets exist to answer questions like how many widgets should we produce, something hard core socialists don't have an answer for. Short sellers help answer the question how much capital should we allocate.
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01-28-2021, 01:10 PM #114
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01-28-2021, 01:16 PM #115
One reason is because all companies aren't honestly trying to make it in the world. Enron, for example, propped up on bullshit and electric grid manipulation, would be a company that needed to be kept in check. Herbalife is another one if you want to watch an interesting doc called "Betting on Zero."
The thing is the rules are there and people/orgs will always try to push beyond them. If we want a truly "free" market then we need to let the opposing forces act as they see fit, and sometimes get royally fucked over for their stupidity/greed.
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01-28-2021, 01:35 PM #116Registered User
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Some smart person explain the GME (gamestop) thing
Without knowing a whole lot about the stock market, this whole situation is kind of blowing my mind. The actions being taken against retail investors here are kind of crazy.
I’m not on reddit but saw that the wall street bets sub got shut down and people are going bananas. The more the big dogs push is going to come with an equal or greater doubling down by the retail investors.
Also, robin hood has already been hit with a class action suit?
This is some exciting shit for a Thursday that I’m stuck in the office and not skiing pow.
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01-28-2021, 01:46 PM #117
Nothing specifically wrong, but a lot of the issue is hedge funds overleveraging so you see numbers like more than 100% of stock shorted. That would be fine if they had the capital or held stock to fulfill it, but they don't. They also create a meaningful counter to buy and hold. So you have a few options:
1. Ban shorts - a bit overzealous but would solve the problem.
2. Increase capital or stock reqs on short positions - doable but will reduce profit.
3. Crack down on overleveraging and/or positions that short more than 100% of available stock.
All of our recent bubbles have been "financial innovation" of new vehicles that appear to counterbalance risk but have little to no capital test.
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01-28-2021, 01:47 PM #118
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01-28-2021, 02:44 PM #119
I’m still confused about how a stock can be 140% shorted. Hell, anything close to half doesn’t seem possible.
Naked shorts are supposed to be illegal.
But you can borrow against someone that holds the underlying stock. But this is multiple borrowings.
Anyone can explain?
PS, read an interesting Patrick Byrne thing a month ago when he was Drumpf raging. The article is a crazy rage about naked shorts, mafia types, and Jim Kramer inside trading. But the interesting part was where he bought a call for 50,000 shares of overstock, and demanded delivery at the expiry. He got nothing. Stock was so thinly traded it couldn’t be had.
And the SEC did nothing.. . .
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01-28-2021, 02:55 PM #120
Good explanation here: https://www.fool.com/investing/2021/...ver-100-heres/
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01-28-2021, 02:56 PM #121
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01-28-2021, 03:07 PM #122
This whole thing is fascinating to me. Thanks for all the info posted.
And when does the movie start production?
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01-28-2021, 03:07 PM #123Registered User
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To the layman it appears the markets are completely disconnected from day to day reality, push companies to offshore jobs, funnel capital to the top with little regard for the general welfare, are solely focused on profit and shrug off the secondary effects of their profit based decision making as a necessary evil or even a social good despite the real world impacts on humans not bank accounts.
Im saying that as someone who has their retirement riding on the stock market going up.
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01-28-2021, 03:09 PM #124
RH got a margin call from the clearinghouse. Margin requirements can change and Robinhood is not exactly deep pocketed.
Edit: I see that RH self clears. The risk managers probably stepped in. Like the movie "Margin Call."
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01-28-2021, 03:34 PM #125
Yeah, there's an argument equity markets do less to serve the social function equity markets are supposed to serve than they once did. It's also a historical fact that only market-oriented economies allow people to live better lives than their parents lived.
So if casino finance, capital structure manipulation, front-running, socializing risk, creates a situation where lots of people feel like they're no longer seeing forward progress in their material lives then that's a problem for liberal democratic capitalism.
When you step back, it just seems like even though there's always plenty of reasons for short run pessimism the long run story clearly calls for optimism.
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