Reddit Trolls Screw Hedge Funds out of $13 Billion. Wall Street MALDING - Page 3 - Politics Forum.org | PoFo

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#15153396
wat0n wrote:Short the stock? (Un)ironically.


Seems so, all brokers have disabled shorting the stock(because of liquidity issues)

And the stock is now trading at $190, when 1 hour ago it was $480.

Seems like only particular brokers(who?) have access to short the stock.

Some people are going to make lots of money today.

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#15153411
wat0n wrote:It seems there is also a market movement against shorting, the shorting fees have shot up after this (which, again, makes sense since there is a big ass incentive to short it).


The obvious question is if the exchanges are not allowing traders to short the stock then how is the share price collapsing as we speak? Who is shorting it and how?

The obvious answer is that exchanges and funds have closed ranks and are now not even shy to admit that they are rigging it in broad day light allowing only a select few to place trades.
#15153416
@Rancid

Shorting is terrible and very bad investment practice. My personal investment philosophy is keep it simple. Just invest in well diversified, low cost index funds with about 15% of the portfolio in a REIT low cost index fund to combat any inflation. When you short, the odds are not in your favor you will make money over the long term but will in fact lose money (in the long term). Investment is a long term endeavor and there is no such thing as getting rich quick. I have actually successfully made money and never lost money with my approach. However, the returns came over the long term over a number of years and I invested every month into my portfolio of low cost index funds to achieve acceptable returns that made money after taking inflation into account. I wasn't trying to get quick returns like many who short stocks try to do.
#15153424
Politics_Observer wrote:@Rancid

Shorting is terrible and very bad investment practice. My personal investment philosophy is keep it simple. Just invest in well diversified, low cost index funds with about 15% of the portfolio in a REIT low cost index fund to combat any inflation. When you short, the odds are not in your favor you will make money over the long term but will in fact lose money (in the long term). Investment is a long term endeavor and there is no such thing as getting rich quick. I have actually successfully made money and never lost money with my approach. However, the returns came over the long term over a number of years and I invested every month into my portfolio of low cost index funds to achieve acceptable returns that made money after taking inflation into account. I wasn't trying to get quick returns like many who short stocks try to do.


For the regular joe like me and you, I agree that shorting is bad/risky. Mainly because the amount of money you can lose has no limit. Further, when you short, you are taking out a loan, and you have to pay interest while you hold the short position. It's just too much risk for regular people. A bad short will put you in massive debt with a terrible interest rate.

However, as a general concept, it is not evil, wrong, or even bad for the markets. I'd argue it's a good thing. Shorting serves as a mechanism that can keep a bubble from forming (or at least slow down bubbles). It can, and has helped exposed the misdeeds of companies in the past. This is good. Shorting helps ground the markets in reality. That said, in this case, it has failed and created what I'm calling an "inverse bubble". Basically, they went a little too hard on the shorting.
#15153425
If my exchange allowed me to short Gamestop today I would have made 3.25 million with 10k within the hour.

Obviously more people had the same idea and the brokers blocked people from shorting Gamestop which defeats the purpose of trading in the first place.
#15153426
noemon wrote:If my broker allowed me to short Gamestop today I would have made 3.25 million with 10k.

:eek:
I wouldn't dwell on that though. Some people get obsessed with all of their missed opportunities and then get hasty to try and find the next one, only to lose a lot of money.

Side note, one strategy I like though, its to look for struggling tech companies that are rock bottom or near rock bottom. Buy a shit ton of their stock dirty cheap and sit on it (10-20k worth). Usually tech companies, even failing tech companies have many assets that other companies are interested in, like trade secrets and patents. There is usually another tech company that eventually buys up the failing company purely for the patents. Usually that's where a good payout is. Sometimes, the companies also manage to turn around rather than getting bought out, so you get a payout in that case too. Buying the bad news on tech is not a bad idea. Still, not risk free.
Last edited by Rancid on 28 Jan 2021 18:31, edited 1 time in total.
#15153429
@Rancid

Well, if you don't want to invest like the average joe, a good book to invest like Warren Buffet (who is a true investment pro and a track record to back that up) is reading "The Intelligent Investor" by Benjamin Graham on the section that talks about the enterprising investor. People that short are just players in a casino where the game is rigged against them. They will eventually lose in the end when lady luck runs out.
#15153430
Politics_Observer wrote:@Rancid

Well, if you don't want to invest like the average joe, a good book to invest like Warren Buffet is reading "The Intelligent Investor" by Benjamin Graham on the section that talks about the enterprise investor. People that short are just players in a casino where the game is rigged against them. They will eventually lose in the end when lady luck runs out.


I didn't say I don't want to invest like the average joe. :)

It takes waaaayy too much work to do the homework on companies to figure out what's a good bet, long or short. Thus, I stick to mostly index funds. I only occasionally buy individual companies when I think I can do that rock bottom tech play I mentioned above. It's easier for me to do this with tech, since I know the industry. The other strategy is I buy into index funds when I see bad news.

For example, in march and this past fall, I bought into the index funds when coronavirus pushed the markets way down. We have recovered and more since then, so I've made a solid amount of money doing this. It's not making me rich, but it has made me good money, so it's a win.

Buy the bad news! WHen people run from the fire, you run towards it!
Last edited by Rancid on 28 Jan 2021 18:53, edited 1 time in total.
#15153431
@Rancid

I don't have the time for it either hence why I invest in low cost index funds too. However, Warren Buffet didn't make his fortune by making a bet or gambling and he never shorted a stock. He made his fortune because the facts were on his side in his individual stock choices and understood the principles of investment as taught by Benjamin Graham. This is the reason why Warren Buffet recommends Benjamin's book for those who want to invest either not so serious or as serious investment professionals.
#15153438
I haven't enjoyed financial news this much since Bill Ackman got owned by the collapse of Valeant Pharmaceuticals.

The funniest thing by far has been watching hedge fund managers and their jackass PR representatives crying about how r/wallstreetbets is the equivalent of domestic terrorism. :lol:

Exhibit A, courtesy of Linkedin:
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I have to admit that even I'm a little shocked at how transparently they're now rigging things back in the big guys' favour, though. It sounds as though Citadel reloaded a huge short position right before it told Robinhood to stop allowing people to buy Gamestop, which, even by Wall Street standards is open-and-shut market manipulation.

As @blackjack21 noted, anything to make sure Melvin Capital doesn't have to suffer any consequences for putting on such a ludicrously large short bet with apparently no measures to mitigate risk.

(What kind of a name is "Melvin Capital" anyway? Fucking dipshits :lol: )
#15153441
noemon wrote:The exchanges disabled shorting the stock because:

Image

Apparently the liquidity provider has disabled it. Who is that liquidity provider anyway?


Mostly banks, the bigger the financial institutions the bigger their bank will be if they don't outright have their own and through it connected to ECB or FED.
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