But, this whole thing makes me feel so dumb. I get anxiety about investing and portfolios and medium growth funds or whatever because I have a hard time understanding. I know we can't all be experts at everything, but this is one of those areas in life I struggle with. I remember when we bought our first home, and it took me an embarrassingly long time to understand escrow.
I think the reason so many people are struggling to understand this specific situation is because it doesn't make a whole lot of sense. It goes against the logic most of us use. Most of the stock market does.
And most of us haven't been well prepared for things like mortgages, etc. It should absolutely be covered in more depth in high school.
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I was going to add it to my list in the education thread!
Is it just me, or is anyone else annoyed/angry that a woman is all "hehe explain it to me using Sephora and Ulta" .
This isn't a relatively straight forward thing to understand. The stock market is complicated, hence why a lot of people don't invest (among other reasons). Why not just say "can someone explain it in simple terms" rather than falling back on a trope that women only understand makeup?
I thought this was a pretty good explainer, but just leaves me with a bunch of questions. I think the Citadel/Robinhood/Melvin Capital piece needs to be investigated by the SEC.
Is it just me, or is anyone else annoyed/angry that a woman is all "hehe explain it to me using Sephora and Ulta" .
This isn't a relatively straight forward thing to understand. The stock market is complicated, hence why a lot of people don't invest (among other reasons). Why not just say "can someone explain it in simple terms" rather than falling back on a trope that women only understand makeup?
I think that the author was just trying to make it more fun. @ Just like my elementary school teacher taught me how to understand fractions using slices of pizza.
I explained shorts to my husband last night using a specific brand of sweaters as an example.
I never feel as unintelligent as I do when trying to understand the stock market. Ultimately my brain freezes up and reroutes to questioning the existential concept of "value" rather than unraveling the intricacies of short sales.
I never feel as unintelligent as I do when trying to understand the stock market. Ultimately my brain freezes up and reroutes to questioning the existential concept of "value" rather than unraveling the intricacies of short sales.
Post by imojoebunny on Jan 28, 2021 10:41:47 GMT -5
If you can figure out what to do with all the stuff Sephora sells and make enough money to afford to buy it, you can understand what is happening in the stock market. I have an MBA in finance, and the only thing I know what to do with in Sephora, is sunscreen.
I never feel as unintelligent as I do when trying to understand the stock market. Ultimately my brain freezes up and reroutes to questioning the existential concept of "value" rather than unraveling the intricacies of short sales.
#englishmajorforlife
Same. Just call me Barbie, "Math is hard."
But I think this ultimately proves that we're right. Why is a stock assigned a particular dollar amount? Because a bunch of people decided it should be worth that. That isn't math. That's anthropology.
But I think this ultimately proves that we're right. Why is a stock assigned a particular dollar amount? Because a bunch of people decided it should be worth that. That isn't math. That's anthropology.
Or psychology that at some point someone tricked the masses into believing a made up point system had value equal to the value of gold.
I never feel as unintelligent as I do when trying to understand the stock market. Ultimately my brain freezes up and reroutes to questioning the existential concept of "value" rather than unraveling the intricacies of short sales.
#englishmajorforlife
Given that most investors get their gains via stock price rather than dividends these days, 'value' is a shared myth that only works to the degree everyone believes in it. (Absent the stock hitting actual zero because the company has gone under).
I came into this thread to get some clarity on the subject because I'd seen it mentioned on CNN.com and I still have no idea what's going on. The stock market just confuses me so much.
The hedge fund planned to make a lot of money by assuming game stop will go out of business soon. There have been examples of hedge funds doing this with businesses in the past by literally putting out fake press releases and such to mess with stock prices. By essentially pushing others to support their prediction with investments, they can get what they want.
In this case, they planned to make money by shorting the GME stock. They borrowed a ton of shares from owners, and then they sell them. They wait for the expected price drop of the shares, and then buy the shares back at the lower price. They then give the repurchased shares back to the original owner, having made their money off buying them back at less than they sold.
They have to put up collateral to borrow the shares to begin with. So obviously if the lender sees the share price going up for their stock, they want more collateral to support the value. If the lender asks for more and more collateral or you run out, you’d have to take a loss to return the shares to the lender.
The Reddit users simply saw this happening and did the opposite to the hedge fund people. They started buying a ton of shares collectively to drive the GME stock price up, therefore making the hedge fund bet on the price drop a huge mistake. In many cases, the hedge fund’s contracts for borrowing are now coming due (thurs/fri), meaning they have to return all those borrowed shares at $300/share instead of $5 (or whatever the numbers are, i didn’t pull the specifics). So they made a bet expecting to profit off bankrupting game stop and instead possibly got bankrupted.
Eta: hopefully this helps lol.
This was so helpful! What happens when/if the hedge fund goes bankrupt? I'm assuming the folks who are letting them borrow their shares are out of luck and lose their investment? I'm assuming those people are typically UMC/wealthy folks who know that it's a gamble but I can't but think about my blue collar father, whose pension and/or 401K is managed by whoever the HR department at the factory uses. Are people like him going to be hurt by stuff like this?
They’re probably covering their ass from the eventual downturn this was going to take. You have massive amounts of people buying into super inflated stock, with no basis in actual business outlook. It was always going to burst, and when that happens a whole lot of people left holding shares, which they thought they could cash out on, will be angry.
Is the whole point of this project for the Reddit people (or whoever) to get rick quick, or are they doing this as a big “fuck you” to wealthy Wall Street investors?
Is the whole point of this project for the Reddit people (or whoever) to get rick quick, or are they doing this as a big “fuck you” to wealthy Wall Street investors?
So full disclosure, I have followed WallStreetBets for a long time and have made some money here or there from the moves I see people making. I am invested in GME from a while back because I saw the user who was describing the short squeeze and decided that investing a few hundred dollars wasn't going to break me. I've seen my stock skyrocket in value and now have seen it plummet, but am still in the black and could cash out now for a profit.
It started out as a way to make money quickly as this is what the forum is known for the "YOLO" moves that make quick cash and just as quickly lose big cash. Sometimes you win, sometimes you lose. This one has been different because it has grown into a unity horse of watching the hedge funds squirm and has become for many an example of the 99% vs. the 1%. People like AOC and Warren are throwing support behind the cause, which further adds to the feeling of the "little guy" winning.
This morning there is a ton of outrage that buying has been halted on retail apps while it is still available to hedge funds. Could this be because of ripple effect market concerns or because the hedge funds are pissed and calling in favors? No one knows for sure.
For me and a lot of people like me, my stock market money is fun money that I use much like you would use in Vegas. The hard part of this is that a lot of people that are buying don't have fun money, they are hoping to make a profit. The comments of "so when do we sell" "should we sell now" are heartbreaking to me because those people probably didn't have an extra $200 to "YOLO" and will be hurt in the long run because like the house in Vegas, in almost every situation the market always wins.
Edited to add: I am a semester away from finishing my MBA, have an undergrad in History and have a full skin regiment and a whole bunch of makeup from Sephora.
Is the whole point of this project for the Reddit people (or whoever) to get rick quick, or are they doing this as a big “fuck you” to wealthy Wall Street investors?
I think it's both. I was reading the sub last night again and some have cashed out enough to pay their student loans or grandma's medical bill, but a lot of them were attesting they were going to hold partly because of the Wall Street FU and also because they just believe in Game Stop in general.
Edit - but there's probably a bunch of clueless people on there too.
Is the whole point of this project for the Reddit people (or whoever) to get rick quick, or are they doing this as a big “fuck you” to wealthy Wall Street investors?
I think it's both. I was reading the sub last night again and some have cashed out enough to pay their student loans or grandma's medical bill, but a lot of them were attesting they were going to hold partly because of the Wall Street FU and also because they just believe in Game Stop in general.
Edit - but there's probably a bunch of clueless people on there too.
There's also a little bit of nostalgia at play as well. How many of these millennial/Gen Z investors have fond memories of going to GameStop with their allowance money and buying games? I have wondered if this would be the same if it was some weird, no name stock with no emotional attachment.
Post by susquehanna on Jan 28, 2021 12:24:40 GMT -5
I read somewhere last night that a message board full of Mets fans are concerned about this. The new owner of the Mets just gave several billion dollars to one of the hedge funds that got killed by this so that the hedge fund can pay off what they owe and get out of their short. The Mets fans were concerned that this is going to affect player's salaries now.
I read somewhere last night that a message board full of Mets fans are concerned about this. The new owner of the Mets just gave several billion dollars to one of the hedge funds that got killed by this so that the hedge fund can pay off what they owe and get out of their short. The Mets fans were concerned that this is going to affect player's salaries now.
Well boo fucking hoo.
I am 100% behind these "retail investors". The hedge funds and market makers have been manipulating the market for YEARS. These are the same people that caused 2008 to happen. I think it's a true David vs. Goliath story in the making and obviously the "haves" are PISSED that the "have nots" have caught them with their pants down.
And for certain brokerages to not let you buy a completely legit stock is absolutely bullshit.
And it is possible this will affect the market overall, but any damage done will be short-lived, and again, it's NOT the reddit guys' fault, it's the hedge funds that bet billions on a company to fail. Let's place the blame where it truly belongs.
AOC and TED CRUZ agree that it's fucked up for Robinhood to pull the stocks. Apparently it's okay for hedge fund managers to manipulate the market but not normal people.
AOC and TED CRUZ agree that it's fucked up for Robinhood to pull the stocks. Apparently it's okay for hedge fund managers to manipulate the market but not normal people.