Tempted to take a short position on GameStop on Monday. They are a fundamentally overvalued company now.
I think they will tumble some time soon.
The "some time soon" is the issue here for me, not the fact that they are an overvalued company...... if you are going to take out the short....... at what price for what period? it might be expensive given the current stalemate. Having seen a few of Ken Griffin's interviews, his nature appears to be to stand and fight and to eventually work out a solution that gets him out as cheap as possible, .... it may end up being a case of who blinks first. The shorts still being > 100%........and I do not think the retailers are letting go anytime soon as they know that fact and realise there is plenty more meat on the bone........ an interesting situation that will run for a little while longer is my guess. I am not in GME but do find the conundrum fascinating. In years gone by, I would have always thought that the Goliath would win, but in this particular age, I'm not so sure.
“ A hedge fund raises its capital from a variety of sources, including high net worth individuals, corporations, foundations, endowments, and pension funds.”
so potentially people’s pensions will be fucked, greeeeeeeat ffs
Yes. An adult on BBC World Service this morning was explaining that the hedge funds are reacting by selling their shares in normal stocks that they would not otherwise sell, in order to cover themselves. That is why Apple was down 5% on record breaking figures. Many pension funds will hold Apple.
I'm not taking sides on this either way at this stage. There is a lot to play out yet. The same adult pointed out that there are three players in this, the hedgies, the Reddit -driven retail investors, and then the platforms.
That is fascinating. Was the suggestion that this was part of the reason of the couple of % wiped off the stock markets in the past few days?
Tempted to take a short position on GameStop on Monday. They are a fundamentally overvalued company now.
I think they will tumble some time soon.
I am not in GME but do find the conundrum fascinating. In years gone by, I would have always thought that the Goliath would win, but in this particular age, I'm not so sure.
I got told about it super early so I am The thing is, I've made my money off it as have a lot of people, but the thing is at this point, after Thursday where Robinhood started selling people's shares when they were unable to buy specifically at the biggest dip and then had the audacity to say it was " for the customers own good" a lot of people are now going to hold more out of principle than anything else.
Yes it's going to drop like a stone at some point and people will get hurt but from the side of somebody who has been in the middle of this and have been having to keep a super close eye on it, general consensus is that people have mostly used disposable income and that they don't mind making losses of it drives for change.
Tempted to take a short position on GameStop on Monday. They are a fundamentally overvalued company now.
I think they will tumble some time soon.
I am not in GME but do find the conundrum fascinating. In years gone by, I would have always thought that the Goliath would win, but in this particular age, I'm not so sure.
I got told about it super early so I am The thing is, I've made my money off it as have a lot of people, but the thing is at this point, after Thursday where Robinhood started selling people's shares when they were unable to buy specifically at the biggest dip and then had the audacity to say it was " for the customers own good" a lot of people are now going to hold more out of principle than anything else.
Yes it's going to drop like a stone at some point and people will get hurt but from the side of somebody who has been in the middle of this and have been having to keep a super close eye on it, general consensus is that people have mostly used disposable income and that they don't mind making losses of it drives for change.
Sadly I think people will get burned and claim that there should have been regulation from preventing them from making these mistakes.
I have no doubt that a lot of people are using disposable income, I intend to do the same to bet against these kids, but many of them will end up paying for my beer with their rent money, and they will moan about it.
I also have next to no doubt that there are some big institutions piggybacking on this. No way could retail investors on Reddit make that much of a market movement imo.
Ironically, these people will end up being the victims of the very same institutions that they are complaining about.
If you were thinking about shorting Gamestop when it was at the price it was at a month ago, now, you would be a fool not to.
I don't even like what I am saying above, but it is all correct. You can rage against the machine, but eventually, the machine will win.
looking to open a global index tracker after reading various things. What is the best one to keep investing into each month without requiring much checking? I’ve seen various options with vanguard and HSBC.
See a financial adviser first.
Why a global equity fund Why a tracker Where is your diversification if Covid21 hits
FWIW.......I don't rate either of your 2 suggestions.
“ A hedge fund raises its capital from a variety of sources, including high net worth individuals, corporations, foundations, endowments, and pension funds.”
so potentially people’s pensions will be fucked, greeeeeeeat ffs
Yes. An adult on BBC World Service this morning was explaining that the hedge funds are reacting by selling their shares in normal stocks that they would not otherwise sell, in order to cover themselves. That is why Apple was down 5% on record breaking figures. Many pension funds will hold Apple.
I'm not taking sides on this either way at this stage. There is a lot to play out yet. The same adult pointed out that there are three players in this, the hedgies, the Reddit -driven retail investors, and then the platforms.
That is fascinating. Was the suggestion that this was part of the reason of the couple of % wiped off the stock markets in the past few days?
I didn't hear him go that far. Wish I could recall his name, he was talking a lot of sense. He wasn't seeking to defend hedge funds per se, either, just trying to point out that it's not as simple as the little guy sticking it to the Man, and that there could be a variety of unforeseen consequences.
“ A hedge fund raises its capital from a variety of sources, including high net worth individuals, corporations, foundations, endowments, and pension funds.”
so potentially people’s pensions will be fucked, greeeeeeeat ffs
Yes. An adult on BBC World Service this morning was explaining that the hedge funds are reacting by selling their shares in normal stocks that they would not otherwise sell, in order to cover themselves. That is why Apple was down 5% on record breaking figures. Many pension funds will hold Apple.
I'm not taking sides on this either way at this stage. There is a lot to play out yet. The same adult pointed out that there are three players in this, the hedgies, the Reddit -driven retail investors, and then the platforms.
That is fascinating. Was the suggestion that this was part of the reason of the couple of % wiped off the stock markets in the past few days?
I didn't hear him go that far. Wish I could recall his name, he was talking a lot of sense. He wasn't seeking to defend hedge funds per se, either, just trying to point out that it's not as simple as the little guy sticking it to the Man, and that there could be a variety of unforeseen consequences.
So a hedge fund way overleverages itself attempting to manipulate a stock, gets caught out and yet it’s the retail investors fault?
Any "unforeseen consequences" can be directly attributed to the hedge funds who didn't manage their risk, in fact they went out on a limb to take positions of unlimited risk and continue to do so. The only risk the retail investors took was to their "OWN" bank balance. There is absolutely zero responsibility that can be aimed or attributed to the "little guy" here. If you want to look for someone to blame if your assets take an unrealised "hit" (they will bounce back as usual) then you need to look no further than a Ken Griffin, a Steve Cohen or others of their ilk and also the people who "should" have been regulating them, but didn't.
Here is what a psychologist said about his experience working with the ultra high net worth individuals "They have this feeling that rules don’t apply to them, although that mind-set is often the key to much of their success. If they’re told something can’t be done a certain way, they think that doesn’t apply to them and find a way around it. It can be viewed as elitist or having a sense of entitlement, but it’s also a highly effective strategy for innovative thinking. One reason is a lack of boundaries. They think the rules don’t apply to them. And you know what? They are right, the rules don’t. They get all this exclusive access to everything, because people are courting them for their money. The rules don’t apply even if the billionaire wants them to apply, and that makes it challenging to have boundaries. Professionals with very strict codes of conduct will loosen their own boundaries to work with these individuals and not get fired by them. It becomes hard for a billionaire to get objective feedback from others because of their status.
When the regulators who are being funded and paid by the people that they are supposed to be regulating, you can quite easily end up in a Game Stop situation. "unlimited risk" WTF??
Any "unforeseen consequences" can be directly attributed to the hedge funds who didn't manage their risk, in fact they went out on a limb to take positions of unlimited risk and continue to do so. The only risk the retail investors took was to their "OWN" bank balance. There is absolutely zero responsibility that can be aimed attributed to the "little guy" here. If you want to look for someone to blame if your assets take an unrealised "hit" (they will bounce back as usual) then you need to look no further than a Ken Griffin, a Steve Cohen or others of their ilk and also the people who "should" have been regulating them, but didn't.
Here is what a psychologist said about his experience working with the ultra high net worth individuals "They have this feeling that rules don’t apply to them, although that mind-set is often the key to much of their success. If they’re told something can’t be done a certain way, they think that doesn’t apply to them and find a way around it. It can be viewed as elitist or having a sense of entitlement, but it’s also a highly effective strategy for innovative thinking. One reason is a lack of boundaries. They think the rules don’t apply to them. And you know what? They are right, the rules don’t. They get all this exclusive access to everything, because people are courting them for their money. The rules don’t apply even if the billionaire wants them to apply, and that makes it challenging to have boundaries. Professionals with very strict codes of conduct will loosen their own boundaries to work with these individuals and not get fired by them. It becomes hard for a billionaire to get objective feedback from others because of their status.
When the regulators who are being funded and paid by the people that they are supposed to be regulating, you can quite easily end up in a Game Stop situation. "unlimited risk" WTF??
Wish I could like this more than once. The situation they put themselves in is unacceptable. Hedge funds hunt on people’s greed, that’s not necessarily a dig, who else looks at RSI and if a stock is oversold or overbought? it’s just this time it was the retail investor who got the laugh.
A combination of smart investing (buying a stock that had been artificially kept low for a long time), millennial nostalgia (who else used to hang out for hours in their local GAME shop? Spent some great hours there) and anti institutional sentiment since 2008 and their greed snowballed it into the situation.
Overleveraged longs caused the last crash, looks like overleveraged shorting will cause the next. In short, these institutions need more regulating.
Here's a good read on a 2014 "short story" where the erstwhile Steve A. Cohen and his crew were "successful"....... karma how well his investment in Melvin Capital is working out. Hopefully he will keep throwing plenty of cash their way to pay their dues.
“ A hedge fund raises its capital from a variety of sources, including high net worth individuals, corporations, foundations, endowments, and pension funds.”
so potentially people’s pensions will be fucked, greeeeeeeat ffs
Yes. An adult on BBC World Service this morning was explaining that the hedge funds are reacting by selling their shares in normal stocks that they would not otherwise sell, in order to cover themselves. That is why Apple was down 5% on record breaking figures. Many pension funds will hold Apple.
I'm not taking sides on this either way at this stage. There is a lot to play out yet. The same adult pointed out that there are three players in this, the hedgies, the Reddit -driven retail investors, and then the platforms.
That is fascinating. Was the suggestion that this was part of the reason of the couple of % wiped off the stock markets in the past few days?
I didn't hear him go that far. Wish I could recall his name, he was talking a lot of sense. He wasn't seeking to defend hedge funds per se, either, just trying to point out that it's not as simple as the little guy sticking it to the Man, and that there could be a variety of unforeseen consequences.
So a hedge fund way overleverages itself attempting to manipulate a stock, gets caught out and yet it’s the retail investors fault?
Er no, I don' think that's what he said at all. I haven't got anything to add to what I previously reported him to say. But "unforeseen consequences" will, I suggest, turn out to be the key phrase.
Let's see. I'm just happy to be watching from the sidelines. I can take a whack on my tech stock holdings for the privilege.
Anyone else in on Nokia, I’m in big but not for any short squeeze or Reddit hype. I generally believe they are undervalued compared to the rest of the 5G market.
Yes it is. Just like GameStop was undervalued - it just snowballed because it became a meme, because it’s funny that such a nostalgic company and in a dying industry is actually undervalued.
Anyone else in on Nokia, I’m in big but not for any short squeeze or Reddit hype. I generally believe they are undervalued compared to the rest of the 5G market.
Yes it is. Just like GameStop was undervalued - it just snowballed because it became a meme, because it’s funny that such a nostalgic company and in a dying industry is actually undervalued.
I think it's pointless to ask, as you can easily look it up before answering...but do you actually know what industry Nokia is in nowadays? If so, why do you say it is "dying" ?
TBF I'm only aware of the answer thanks to my old and very dear Finnish friend who spent a long time with Nokia earlier in his career. But the point is @WillmoreTheRed looks like he has invested in Nokia for the right reasons, while all those kids in their pyjamas on Reddit, how many of them can say that? That's what makes me uneasy, and is a similar unease to what I get from crypto.
Anyone else in on Nokia, I’m in big but not for any short squeeze or Reddit hype. I generally believe they are undervalued compared to the rest of the 5G market.
Yes it is. Just like GameStop was undervalued - it just snowballed because it became a meme, because it’s funny that such a nostalgic company and in a dying industry is actually undervalued.
I think it's pointless to ask, as you can easily look it up before answering...but do you actually know what industry Nokia is in nowadays? If so, why do you say it is "dying" ?
TBF I'm only aware of the answer thanks to my old and very dear Finnish friend who spent a long time with Nokia earlier in his career. But the point is @WillmoreTheRed looks like he has invested in Nokia for the right reasons, while all those kids in their pyjamas on Reddit, how many of them can say that? That's what makes me uneasy, and is a similar unease to what I get from crypto.
I believe KA was talking about GameStop - high street video game stores are dying as sales move to downloads
Anyone else in on Nokia, I’m in big but not for any short squeeze or Reddit hype. I generally believe they are undervalued compared to the rest of the 5G market.
Yes it is. Just like GameStop was undervalued - it just snowballed because it became a meme, because it’s funny that such a nostalgic company and in a dying industry is actually undervalued.
I think it's pointless to ask, as you can easily look it up before answering...but do you actually know what industry Nokia is in nowadays? If so, why do you say it is "dying" ?
TBF I'm only aware of the answer thanks to my old and very dear Finnish friend who spent a long time with Nokia earlier in his career. But the point is @WillmoreTheRed looks like he has invested in Nokia for the right reasons, while all those kids in their pyjamas on Reddit, how many of them can say that? That's what makes me uneasy, and is a similar unease to what I get from crypto.
Anyone else in on Nokia, I’m in big but not for any short squeeze or Reddit hype. I generally believe they are undervalued compared to the rest of the 5G market.
Yes it is. Just like GameStop was undervalued - it just snowballed because it became a meme, because it’s funny that such a nostalgic company and in a dying industry is actually undervalued.
I think it's pointless to ask, as you can easily look it up before answering...but do you actually know what industry Nokia is in nowadays? If so, why do you say it is "dying" ?
TBF I'm only aware of the answer thanks to my old and very dear Finnish friend who spent a long time with Nokia earlier in his career. But the point is @WillmoreTheRed looks like he has invested in Nokia for the right reasons, while all those kids in their pyjamas on Reddit, how many of them can say that? That's what makes me uneasy, and is a similar unease to what I get from crypto.
Some of those "kids in their pyjamas" are financial analysts and have made millions already 🙄
Anyone else in on Nokia, I’m in big but not for any short squeeze or Reddit hype. I generally believe they are undervalued compared to the rest of the 5G market.
Yes it is. Just like GameStop was undervalued - it just snowballed because it became a meme, because it’s funny that such a nostalgic company and in a dying industry is actually undervalued.
I think it's pointless to ask, as you can easily look it up before answering...but do you actually know what industry Nokia is in nowadays? If so, why do you say it is "dying" ?
TBF I'm only aware of the answer thanks to my old and very dear Finnish friend who spent a long time with Nokia earlier in his career. But the point is @WillmoreTheRed looks like he has invested in Nokia for the right reasons, while all those kids in their pyjamas on Reddit, how many of them can say that? That's what makes me uneasy, and is a similar unease to what I get from crypto.
I believe KA was talking about GameStop - high street video game stores are dying as sales move to downloads
If that’s the case then I apologise for misinterpreting his post
Anyone else in on Nokia, I’m in big but not for any short squeeze or Reddit hype. I generally believe they are undervalued compared to the rest of the 5G market.
Yes it is. Just like GameStop was undervalued - it just snowballed because it became a meme, because it’s funny that such a nostalgic company and in a dying industry is actually undervalued.
I think it's pointless to ask, as you can easily look it up before answering...but do you actually know what industry Nokia is in nowadays? If so, why do you say it is "dying" ?
TBF I'm only aware of the answer thanks to my old and very dear Finnish friend who spent a long time with Nokia earlier in his career. But the point is @WillmoreTheRed looks like he has invested in Nokia for the right reasons, while all those kids in their pyjamas on Reddit, how many of them can say that? That's what makes me uneasy, and is a similar unease to what I get from crypto.
Some of those "kids in their pyjamas" are financial analysts and have made millions already 🙄
That may be true, sort of. With these bubbles, gong back more than a century, there are the few who know exactly what they are doing, and make a shedload.
But if you think you are one of the few, dont let me stop you, fill yer boots.
Having trawled through the WSB thread, it's clear Gamestop was a genuine deep value play originally, with a large dollop of sentiment which then turned into 'stick it to the man'. Going to be difficult for a regulator to suggest that it was market manipulation on that basis.
Was reminded of Newton, who famously made a 100% turn on the South Sea Bubble, got out when it got a bit mad, only to go back in when it carried on going up and ultimately lost 3 times his original stake ...
A bit of background on Hedge Funds, for those who haven't come across them. Originally they only risked their own capital (they've been around since about 1949). The idea is that they use derivatives and smart algorithms to maximise returns and minimise risks.
In the early naughties there was a big surge in raising institutional money when the latter wanted in on the big returns they were making. I worked for a few in those years (including Citadel & SAC, the precursor to Point72), helping them choose and install derivatives systems because they needed to prove to the institutions that they could manage the risks they were taking. Let's just say that there are more hedge funds than there is smart talent and many went bust in the GFC.
SAC famously got done for insider trading (Damien Lewis' character, Bobby Axelrod, in Billions, is heavily based on Steve Cohen) and a few went to prison. After the crisis, proprietary trading (trading on your own account) was banned in banks under the Dodd Frank rules, so, ironically a lot of the guys I worked for in the big banks left to set up new hedge funds. Essentially, prop trading moved to the (relatively) non-regulated world. Dodd Frank did bring any but the smallest under regulation and required detailed reporting, but they aren't prevented from prop trading, unlike the banks, as they aren't considered systemic.
If you haven't already, Billions is well worth watching - it's a pretty accurate view of the hedge fund industry, in my opinion, albeit with a focus on accusations of insider trading. (Gordon Gekko was a 'barbarian at the gate' private equity 'leveraged buy-out', asset stripper.)
Comments
Having seen a few of Ken Griffin's interviews, his nature appears to be to stand and fight and to eventually work out a solution that gets him out as cheap as possible, .... it may end up being a case of who blinks first.
The shorts still being > 100%........and I do not think the retailers are letting go anytime soon as they know that fact and realise there is plenty more meat on the bone........ an interesting situation that will run for a little while longer is my guess.
I am not in GME but do find the conundrum fascinating. In years gone by, I would have always thought that the Goliath would win, but in this particular age, I'm not so sure.
The thing is, I've made my money off it as have a lot of people, but the thing is at this point, after Thursday where Robinhood started selling people's shares when they were unable to buy specifically at the biggest dip and then had the audacity to say it was " for the customers own good" a lot of people are now going to hold more out of principle than anything else.
Yes it's going to drop like a stone at some point and people will get hurt but from the side of somebody who has been in the middle of this and have been having to keep a super close eye on it, general consensus is that people have mostly used disposable income and that they don't mind making losses of it drives for change.
I have no doubt that a lot of people are using disposable income, I intend to do the same to bet against these kids, but many of them will end up paying for my beer with their rent money, and they will moan about it.
I also have next to no doubt that there are some big institutions piggybacking on this. No way could retail investors on Reddit make that much of a market movement imo.
Ironically, these people will end up being the victims of the very same institutions that they are complaining about.
If you were thinking about shorting Gamestop when it was at the price it was at a month ago, now, you would be a fool not to.
I don't even like what I am saying above, but it is all correct. You can rage against the machine, but eventually, the machine will win.
Why a global equity fund
Why a tracker
Where is your diversification if Covid21 hits
FWIW.......I don't rate either of your 2 suggestions.
If you want to look for someone to blame if your assets take an unrealised "hit" (they will bounce back as usual) then you need to look no further than a Ken Griffin, a Steve Cohen or others of their ilk and also the people who "should" have been regulating them, but didn't.
Here is what a psychologist said about his experience working with the ultra high net worth individuals "They have this feeling that rules don’t apply to them, although that mind-set is often the key to much of their success. If they’re told something can’t be done a certain way, they think that doesn’t apply to them and find a way around it. It can be viewed as elitist or having a sense of entitlement, but it’s also a highly effective strategy for innovative thinking. One reason is a lack of boundaries. They think the rules don’t apply to them. And you know what? They are right, the rules don’t. They get all this exclusive access to everything, because people are courting them for their money. The rules don’t apply even if the billionaire wants them to apply, and that makes it challenging to have boundaries. Professionals with very strict codes of conduct will loosen their own boundaries to work with these individuals and not get fired by them. It becomes hard for a billionaire to get objective feedback from others because of their status.
When the regulators who are being funded and paid by the people that they are supposed to be regulating, you can quite easily end up in a Game Stop situation. "unlimited risk" WTF??
A combination of smart investing (buying a stock that had been artificially kept low for a long time), millennial nostalgia (who else used to hang out for hours in their local GAME shop? Spent some great hours there) and anti institutional sentiment since 2008 and their greed snowballed it into the situation.
I can't risk the price of GameStop but I might try buy some AMC shares.
https://www.newyorker.com/magazine/2014/10/13/empire-edge
Let's see. I'm just happy to be watching from the sidelines. I can take a whack on my tech stock holdings for the privilege.
TBF I'm only aware of the answer thanks to my old and very dear Finnish friend who spent a long time with Nokia earlier in his career. But the point is @WillmoreTheRed looks like he has invested in Nokia for the right reasons, while all those kids in their pyjamas on Reddit, how many of them can say that? That's what makes me uneasy, and is a similar unease to what I get from crypto.
When you can spin up plenty of computing power via AWS or Google Cloud for not much money, these kids can match these hedge funds in lots of way
got excited for a minute as some of mine start 398 bought end of June ..... but alas not me.
Having trawled through the WSB thread, it's clear Gamestop was a genuine deep value play originally, with a large dollop of sentiment which then turned into 'stick it to the man'. Going to be difficult for a regulator to suggest that it was market manipulation on that basis.
Was reminded of Newton, who famously made a 100% turn on the South Sea Bubble, got out when it got a bit mad, only to go back in when it carried on going up and ultimately lost 3 times his original stake ...
A bit of background on Hedge Funds, for those who haven't come across them. Originally they only risked their own capital (they've been around since about 1949). The idea is that they use derivatives and smart algorithms to maximise returns and minimise risks.
In the early naughties there was a big surge in raising institutional money when the latter wanted in on the big returns they were making. I worked for a few in those years (including Citadel & SAC, the precursor to Point72), helping them choose and install derivatives systems because they needed to prove to the institutions that they could manage the risks they were taking. Let's just say that there are more hedge funds than there is smart talent and many went bust in the GFC.
SAC famously got done for insider trading (Damien Lewis' character, Bobby Axelrod, in Billions, is heavily based on Steve Cohen) and a few went to prison. After the crisis, proprietary trading (trading on your own account) was banned in banks under the Dodd Frank rules, so, ironically a lot of the guys I worked for in the big banks left to set up new hedge funds. Essentially, prop trading moved to the (relatively) non-regulated world. Dodd Frank did bring any but the smallest under regulation and required detailed reporting, but they aren't prevented from prop trading, unlike the banks, as they aren't considered systemic.
If you haven't already, Billions is well worth watching - it's a pretty accurate view of the hedge fund industry, in my opinion, albeit with a focus on accusations of insider trading. (Gordon Gekko was a 'barbarian at the gate' private equity 'leveraged buy-out', asset stripper.)