I spent some time reading the reddit page today and I didn't get the sense that anyone thinks of this as a long-term play. A lot of people seem to think these guys are idiots who know nothing about investing, and while I'm sure there are a good amount of inexperienced investors who are along for the ride and hoping to make a buck, I think pretty much everyone understands this is a short-term move.
OT: Stock and Investment Talk
- Thread starter RU-05
- Start date
The danger in restricting trading when the retail investor is making money by using the excuse that they are trying to "protect the investor" is the following. What happens if the stock market goes down like it did in 2008 or March of 2019? How are the retail investors going to be protected when they may actually be losing money. Are they going to halt all trading in the stock market? Are they going to allow the retail investor to sell all their shares at a discount like they allowed the hedge funds to buy GME today? What they did today will be a huge problem in the future. Mark my words.
The idea that this massive run up was all due to Robinhood traders is wrong. The amount of shares exchanged in the past 2 weeks was in hundreds of millions. This trade may have started on reddit, but we in the hedge fund business contributed heavily to make it parabolic.
My comment explained why Robinhood shut down trading in GME specifically, and a few other names as well. I’m also questioning the wisdom of RH’s business model. I never attributed the run up in GME solely to RH customers.
Trying to compare HLF to this is sad. I can’t tell if you are ignorant or just not that smart.
What a day yesterday. This is going to be a great movie.
Anyway, nothing like waking up to Papa Elon making my day.
www.cnbc.com
Anyway, nothing like waking up to Papa Elon making my day.
Bitcoin spikes 20% after Elon Musk adds #bitcoin to his Twitter bio
The virtual currency climbed suddenly at around 3:30 a.m. ET, adding $5,000 in the space of an hour to trade at $37,299.
This morning as I watched Squawk Box before I left for my office I watched Sorkin say he had talked to some RH customers about GME, and one had said he didn't care if he lost money as long as he stuck it to the hedge funds. This kind of irrationality is why I won't touch it with a 10 foot pole.
Has GM solved their dealer network problem? Too many links in the chain eating at margins compared to TSLAs (practically) direct to consumer model.
They also have other legacy issues related to workers/unions/retirees.
Then they have to buy/lease necessary tech because their own investment into electric vehicles is behind (Ford already started doing this).
Even if we waive a magic wand and solve all those issues, they still need to borrow a ton of capital required to re-tool their factories and retrain assembly workers.
It’s a massive undertaking, IMO...
They also have other legacy issues related to workers/unions/retirees.
Then they have to buy/lease necessary tech because their own investment into electric vehicles is behind (Ford already started doing this).
Even if we waive a magic wand and solve all those issues, they still need to borrow a ton of capital required to re-tool their factories and retrain assembly workers.
It’s a massive undertaking, IMO...
I mean...can ya blame that guy? Look what Leon cooperman said last night. These hedge fund guys have completely lost their senses of reality, and they cant even manage not to show their seething disdain for regular folks in a 4 minute interview.
All the elitist cultural stuff at play over the last decade, compounded by the last financial crisis and the bailouts there -- people are pissed. Really pissed. Weve got a gentry again and these people aren't giving back like carnegie and rockefeller...not great folks
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37.5K, probably not a good buying day for cryptos and miners! :)
Overall, if it is a down day, I'm locked and loaded for more buys. Get those CBs down!
Reddit lottery
www.bloomberg.com
A lot of happy retired teachers in Ontario.
Reddit Ignites Mall Stock and Fund Cashes Out $500 Million
The largest shareholder in mall owner Macerich Co. sold its entire holding for nearly $500 million when the stock soared after being touted on Reddit.
www.bloomberg.com
A lot of happy retired teachers in Ontario.
But didn't that comment mean that he had ALSO completely lost his sense of reality? Do I want to invest is a company caught between the two?
BTW- Not all hedge funds are created evil. Many do not get into shorting and Gordon Gecko type company pillaging. But when the political media gets involved in financial reporting nuance disappears as fast as a fart in a hurricane and wokeness crowds any sort of rationality out of the picture.
More information that RH was close to the edge yesterday. In addition to drawing their credit lines, they raised $1bn from their venture capital investors. More and more, the narrative that RH’s GME trading halt was driven by hedge funds or Citadel is debunked.
@Randal7 What did Cooperman say that you deemed elitist or offensive? I watched the interview. He specifically said he wasn’t damning the reddit crowd, but did say this will end in tears for many of them, Don’t see what he said that was elitist.
@Randal7 What did Cooperman say that you deemed elitist or offensive? I watched the interview. He specifically said he wasn’t damning the reddit crowd, but did say this will end in tears for many of them, Don’t see what he said that was elitist.
Yeah. The RH investor in your example has definitely abandoned rational investing sentiment.
The difference, as I see it in my mind, is that the RH investor knows they can get hurt. In fact, they are probably assuming it as a foregone conclusion. But they choose to play anyway, because -- and here's the key -- what do they have to lose?
Now the hedge funds, they are taking the position we ought to pay patronage to them; they'll protect us little guys from the evil perturbations of the market, as long as we're OK (in the words of leon Cooperman) collecting our 2-3% a year. The hedge fund guys -- masters of the universe -- not only think the retail investor doesn't know what they are doing, they think they don't deserve a seat at the cot dang table!
This week could've been an awesome example of creative destruction. An enormous transfer of wealth would have occured, transparently and fairly, between the gilded gentry to retail; it wouldv'e been the kind of week that was celebrated in its magnitude for a long, long time. But, while it's OK for John Paulson types to bet big and make billions on the housing bust w/ Goldman's Synthetic CDO abacus (at the expense of retail!), it's not OK for retail investors to repeatedly land haymakers to the face when the tables are turned.
It's unjust. Nobody likes a rigged game.
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None of those things debunk the Citadel narrative at all. Citadel controls their business whether by design or the stupidity of Robinhood. What Citadel did or didn't do is going to take a long time to figure out, but the bottom line is this shady game of paying for order flow has finally been brought into the light. Griffin has stayed relatively unknown by the public while Stevie Cohen and others have been made the villain. I would trust Cohen long before I trusted Griffin.
Lucky for him he has Treasury Secretary Janet Yellin on his payroll.
Let me list my beefs:
1) He suggested that the history of retail moving up the risk curve searching for yield was wrong (which is totally asinine; T-bills and savings accounts are yielding nothing; to sit and watch ur money languish would make you a shmuck). This isn't the 80's Leon; we've got 0% interest rates.
2) He openly derided people collecting checks and trading at home. We're in the middle of a pandemic. There's people who wish they could be working and are buoyed by whatever recurring payments they are getting. Get a grip. I know you've been pushing paper your whole life so you don't even know what a hard day's work looks like.
3) He then went onto challenge the valuation of Gamestop saying it's "not worth 200, or 100, or 50...I don't know what it's worth!". An equity, a good, a service, they are all worth what the market will pay for them at any given time. Just because the market will bear a valuation for a short period doesn't make that irrational or foul; it's how the system works. Open up an econ 201 textbook. Actually, don't. Take a nap.
4) He ends the interview with one of the most asinine streams of consciousness ever (and the CNBC guy doesn't roast him b/c of course, they are in bed w/ these big guys too and he's a coward). Talking about the merits of saving money through "prudent" savings approaches and patting himself on the back for voting Biden. Convenient for you brother. You've got $1B in the bank. Normal folks are searching for yield.
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Do you have any sense just how obnoxious you sound? Something someone in the back office/operations would write. Give me a break.
I appreciate his candor and honesty. He's actually showing empathy. I think about 1/10th of the population is capable of doing that.
What do they have to lose? A down payment on a house or condo. Retirement savings. Getting out of student debt. I could go on. And they can have a seat at the table. It's really simple. Index funds. If the long term trend for the entire market isn't up, it will eventually catch up with the hedge funds just like everyone else. There were hedge funds that melted down in 2008 and their investors got hurt big time the the folks running them got hurt as well. If they didn't have substantial funds of their own invested Bernie Sanders wouldn't be screaming about carried interest And that 2% in most cases doesn't get paid if the fund loses money. But index funds don't let you crow on a college football board about the 200% you just nailed down in 3 weeks. That's not to say there's not some value in this type of thread.
Are people really betting a down payment on a house or condo via wsb?I was under the impression it was like 2m people betting anywhere between $300 - $1000 per person, with a couple big rollers mixed in.
You suggesting that everyone just sticks their money in index funds -- OK. That's a fine strategy, no problem with that. But it's also not your money. If individual investors like a business and they want to deploy their capital to support that business that's really the only way they can meaningfully impact the market. It's not like they can "wish" blackberry becomes the standard platform technology in EV and across IoT in automotive. They can't buy the product (it's a pass through). All they can do is buy an equity stake. And yes, there was exuberance this week in BB. it was probably irrational. But that's how markets function.
Can I ask -- do you feel this was handled well this week? Would you have done the same?
I think when this is over there‘ll be a lot of beginner investors that won’t be investors anymore.
How long can this last? One more week, a month or 6 months.
How long can this last? One more week, a month or 6 months.
Come on Davey. Front office guys don't write that "I make millions" crap on anonymous college football boards. Keep buying before earnings announcements and selling immediately thereafter. Sounds like a winner to me.
You have it wrong, buy when the stocks dip 10-15% and sell right before it reaches the 52 week high or before the earning announcement, in most cases it will close to the 52 week high. Simple formulas that works 70-80% of the time.
Unless you are arguing that Citadel instructed the DTCC to inform RH and other brokers that additional collateral was needed, then the story that Citadel told RH to stop purchases of GME is false.
On your points:
1. You’ll have to point me to where in the interview he suggested that as I didn’t hear it.
2. He didn’t deride. He described. He specifically said he wasn’t damning anyone. Again, I think you are mischaracterizing what was said.
3. This is wrong. A price of a stock is not synonymous with its value. I agree completely with Leon.
4. He said he voted for Biden, which was against his economic interest. You’re characterization of him “patting himself on the back” is your editorial.
To be clear, I’m agreeing with your first two sentences. Dave’s a good guy. Good for him with the trades he mentions.
I'm arguing that nobody knows what happened here yet and that you saying it's debunked is premature. You are taking little bits of information, calling them all facts and assuming you have the whole story.
GMEs trading volume was $28 Billion on Wednesday. At $1000. per trade it would have taken 2.8 million people to generate that volume, or 280,000 trading 10 times that day. And if a few big rollers account for $10 billion that's still 180,000 people trading 10 times. I don't think so.
The REAL Video is here (CNBC scrubbed it for their upload because he made himself looked like a jackass at the end):
1) 1:47
2) 0:00 - he dumps on them, then pulls back, then dumps again ("like bill parcells, show me a guy who performs").
At 3:30 he says "fair share is a BS concept"
3) OK. Great.
4) OK. What's your editorial?
Well, my opinion is informed by the reaction of a few brokerage firms to requirements established by the DTCC that led to RH asking for $1bn in incremental equity capital from its owners and drawing an additional $600mm from its banks. RH was against the wall. It needed infusions. Citadel had nothing to do with anything in the above fact pattern and sequence.
Thank you for posting. I reiterate my initial post after listening to the linked audio. Think you’re making most of your contentions up, because they are not based on what he said in that interview.
