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BS: G A M E S T O P and market plays

robomatic 01 Feb 21 - 09:37 PM
Stilly River Sage 01 Feb 21 - 11:11 PM
robomatic 02 Feb 21 - 01:26 AM
Nigel Parsons 02 Feb 21 - 05:07 AM
Mrrzy 02 Feb 21 - 09:10 AM
Stilly River Sage 02 Feb 21 - 10:42 AM
punkfolkrocker 02 Feb 21 - 10:58 AM
Mr Red 02 Feb 21 - 04:15 PM
robomatic 02 Feb 21 - 04:22 PM
Stilly River Sage 02 Feb 21 - 06:17 PM
Mr Red 03 Feb 21 - 02:52 AM
robomatic 03 Feb 21 - 09:29 PM
leeneia 04 Feb 21 - 02:20 PM
Manitas_at_home 04 Feb 21 - 02:43 PM
robomatic 04 Feb 21 - 08:44 PM
leeneia 05 Feb 21 - 11:59 AM
Mr Red 07 Feb 21 - 07:49 PM
Stilly River Sage 08 Feb 21 - 12:29 AM
leeneia 08 Feb 21 - 11:17 AM
Mr Red 09 Feb 21 - 05:44 AM
Stilly River Sage 10 Feb 21 - 10:36 AM
robomatic 10 Feb 21 - 02:52 PM
punkfolkrocker 10 Feb 21 - 03:55 PM
punkfolkrocker 10 Feb 21 - 04:01 PM
DonMeixner 13 Feb 21 - 08:48 AM
leeneia 14 Feb 21 - 04:19 PM

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Subject: BS: G A M E S T O P and market plays
From: robomatic
Date: 01 Feb 21 - 09:37 PM

I enjoyed the story about what was basically an investment flashmob enlisted to buy a going nowhere stock that some hedgefund investors had decided to short into oblivion. Apparently the flashmob made some fast gains but the overall effect of this tactic is raising questions for all sorts of folk.

Alexandria Ocasio-Cortez has weighed in. So has Ted Cruz. So has Elizabeth Warren.

It led me to wonder what other investments such as concepts we have invested in or expect to slide hence we are shorting such things as fair-mindedness or curiosity.


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Subject: RE: BS: G A M E S T O P and market plays
From: Stilly River Sage
Date: 01 Feb 21 - 11:11 PM

Did you space out the name of the company to stay under the radar of search engines?

There are some things that are legal now as far as investing that didn't used to be. Reagan started it all off with the savings and loan scandals, but the Glass Steagall Act of 1933 was doing good work and (from a web site with the basics about the act "The Gramm-Leach-Bliley Act eliminated the Glass-Steagall Act's restrictions against affiliations between commercial and investment banks in 1999, which some argue set-up the 2008 financial crisis."

And Trump and the Bushes didn't do anything to make banks and investing safer or more fair.


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Subject: RE: BS: G A M E S T O P and market plays
From: robomatic
Date: 02 Feb 21 - 01:26 AM

SRS:
No, never thought of that. What would the effect here be if someone searched and found it. It will surely come up within the thread. I am no financial maven but what caught my attention with the Reddit Gamestop story was the apparent collaboration of daytrading 'amateurs' to actually affect an organization with much more experience and money and power.

I think in the Gamestop case it is the influence of technology far more than federal regulations, but I may be wrong as look at how some congresspeople are weighing in.

There are many details of this story that I expect to emerge and I thought people here in the BS portion of Mudcat would find it interesting.

As of this evening the price of Gamestop has come down significantly.


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Subject: RE: BS: G A M E S T O P and market plays
From: Nigel Parsons
Date: 02 Feb 21 - 05:07 AM

South Sea bubble anyone?
Or its modern equivalent, Bitcoin?

Like 'Ponzi' schemes and 'pyramid selling', at the outset some people will make a good profit, but eventually the bubble bursts and the profit made by some is paid for by the losses made by those left holding the shares (or whatever) when the bubble bursts.


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Subject: RE: BS: G A M E S T O P and market plays
From: Mrrzy
Date: 02 Feb 21 - 09:10 AM

My kids are enjoying that story all out. I think one might have shares.

They practically lived in that store as older kids. I remember them wanting to grow up to get summer jobs there.


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Subject: RE: BS: G A M E S T O P and market plays
From: Stilly River Sage
Date: 02 Feb 21 - 10:42 AM

My kids also - that was a favorite destination with holiday money, and I remember making several trips to one store where I was on a waiting list for the particular hot player of the year.

I suppose it will go the way of Blockbuster, but it leaves a nice memory glow for kids of that generation.


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Subject: RE: BS: G A M E S T O P and market plays
From: punkfolkrocker
Date: 02 Feb 21 - 10:58 AM

Even though I studied and passed economics at college 4 decades ago,
I've never really understood the mechanics of market speculation/gambling..

I'm content enough presuming it's not a 'good' thing..

Anyway I've been following a few youtubers on this current frenzy...

Those I think are relatively politically moderate, ie not too crazy,
are pushing a line that this battle of amateurs versus hedge fund 'criminals'
is what the USA needs right now..

A healing potential to bring left and right better back together ,
bonding against a common greater enemy..

The little guys fighting back against their wealthy exploiters...


Perhaps these youtube influencers are onto something,
or perhaps they are too naively optimistic...???


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Subject: RE: BS: G A M E S T O P and market plays
From: Mr Red
Date: 02 Feb 21 - 04:15 PM

Elon Musk explained it:

"When the Pony Express was the fastest thing, people promised to buy in advance of the paperwork" adding, "no longer relevant".

He has had his run-ins with Shorters. And they tried it on Tesla recently and it cost them heavy in the same way. The process of shorting is immoral because people can use it to depress a stock that could be bought cheaply then asset stripped. Basically fuelled by a tissue of lies.

Methinks governments can be bought that way. Perhaps not for 4 years at the moment.

And for those not following Tesla, Musk, in reaction, sold (at profit) red shorts with the letters S3XY on the back. And the pun is that his cars are Models; S, 3, X and Y.


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Subject: RE: BS: G A M E S T O P and market plays
From: robomatic
Date: 02 Feb 21 - 04:22 PM

Leave us not forget George Soros who made some lunch money via his short of the Great British Pound


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Subject: RE: BS: G A M E S T O P and market plays
From: Stilly River Sage
Date: 02 Feb 21 - 06:17 PM

For all that it has a long-standing reputation in the American West, the Pony Express only ran for two years. There are places out in open desert areas where you'll see signs indicating the extant trail left from the paths they followed for those two years. You can still see some of the rutted wagon roads in those dry areas.

I've heard Elizabeth Warren talk at length about banking and things that should or shouldn't be happening as far as investors, bankers, and more. I hope there will be commentary from her soon, or legislation to help stop this lopsided economy where there are so few who own so much these days. It wasn't always this way.


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Subject: RE: BS: G A M E S T O P and market plays
From: Mr Red
Date: 03 Feb 21 - 02:52 AM

Elon Musk delayed date of Tesla joining the S&P 500 until Dec 21.

The shortest day of the year.

The guy is a genius. Even the telescopic-eyed short sellers couldn't fail to see that jibe at them.


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Subject: RE: BS: G A M E S T O P and market plays
From: robomatic
Date: 03 Feb 21 - 09:29 PM

yebbut the market will be open for a set number of hours that won't change.

Clever reference, though.

As far as the Pony Express goes, it's an excellent example of image over substance. Only not really, because it was an example of how far certain technology had to be utilized to achieve a new standard. Many horses had to be kept fresh, many stations were required. And the cost of utilizing the service was exorbitant if that service was to be maintained.

Think Concorde versus 747.

When the dream was realized it was through the transcontinental railroad.

They will realize the effective dream of the Concorde, just right now we're not too sure of the specific way it'll be done. Isn't it Elon Musk who is trying to push a vacuum tube through which vehicles pass?

The idea dates back to the great Isambard Kingdom Brunel, and perhaps even farther...


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Subject: RE: BS: G A M E S T O P and market plays
From: leeneia
Date: 04 Feb 21 - 02:20 PM

We need to study how putting normal social activities on the Internet makes them too big to handle. Examples:

In my town, a teenager put the invitation to his eighteenth birthday picnic on Facebook. 400 people showed up, many of whom he didn't know. The party became a superspreader event.

The president invites all his unhappy supporters to a rally in Washington, using Twitter, etc. 8000 people show up, and he has made no preparations, not even portapotties.

Somebody finds out a fund is shorting Gamestop and maliciously puts the news online. An unknown number of people decide to damage the hedge fund, not understanding or not caring that they are actually hurting the investors, not the manager so much. The manager probably has private assets. For the investors, their life savings probably have vanished.


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Subject: RE: BS: G A M E S T O P and market plays
From: Manitas_at_home
Date: 04 Feb 21 - 02:43 PM

You think that short selling doesn't hurt the investors whose stocks are being shorted?


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Subject: RE: BS: G A M E S T O P and market plays
From: robomatic
Date: 04 Feb 21 - 08:44 PM

On a slightly related note, Bitcoin is way up. I used to see this guy in Starbucks who owned Bitcoin. I recommended he sell. I have run into him twice in the last couple years, once during the pandemic. Turns out he doesn't own an entire Bitcoin, but he might be grinning to himself now. I never understood Bitcoin hence the only reason to get into it was on the greater fool theory, and I certainly won't get into it now, though recent event have shown that my nation has many tens of millions of fools.


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Subject: RE: BS: G A M E S T O P and market plays
From: leeneia
Date: 05 Feb 21 - 11:59 AM

Manitas, maybe not. If I buy a stock in a good company, and the price drops temporarily, a player might make money shorting it. But if I hold on and sell it later when it has gone up past where I bought it, I'm good.

Robomatic, I agree. I have yet to find a clear explanation of what Bitcoin is for.


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Subject: RE: BS: G A M E S T O P and market plays
From: Mr Red
Date: 07 Feb 21 - 07:49 PM

Bitcoin is for buying and selling, not for paying with.

From what I hear, it has a limit on the number of coins that can be made (aka mined). Which will keep the price high.

The record of how many and who owns what is contained in a string of bytes that everyone has access to. To get coins for free PCs do an obscure mathematical calculation. Called mining. Which in the process chews threw the records (block chain) for the rest of the owners. People had whole warehouses full of computers just mining away. I suspect it is not cost effective now.

Apparently stolen paintings are traded among the criminal fraternity as currency. I equate the concepts because paintings have minimal intrinsic value, but command high prices because they are "wanted" for the price they can command.

BTW - perhaps I should have said Wells Fargo not Pony Express. Or even "courier". Telegraph killed the Pony Express. But in the 19thC you couldna carry stocks over the wire, only the promise to pay! Modern money exchanges work to the millisecond.


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Subject: RE: BS: G A M E S T O P and market plays
From: Stilly River Sage
Date: 08 Feb 21 - 12:29 AM

The Atlantic has another take on the Gamestop story. They don't think the Davids of the story are so small (with hedge fund managers being the Goliths)

The GameStop Story You Think You Know Is Wrong

Reddit investors are not new populists descended from the radicals of Occupy Wall Street.

The story you might have heard goes like this: A group of regular-Joe traders on Reddit took down a hedge fund by bidding up the stock price of the sleepy video-game store GameStop. Their righteous revolution was briefly thwarted last week when Robinhood, the popular brokerage app, restricted trading because it was secretly in cahoots with the hedge funds. This was an outrage: It was as if, in the matchup between David and Goliath, the magical slingshot stopped firing because it was secretly controlled by the giant. So, right-thinking people on TV and social media hailed the common day traders, demanded prison for various Robinhood executives, and generally extolled the salutary populism of stock speculation and day-trading.

Almost every piece of that story is misleading, tendentious, or totally wrong.

First, are the Reddit revolutionaries new populists descended from the radicals of Occupy Wall Street? No. They’re basically a bunch of dudes upvoting memes with cash. Or, to be more generous, they represent an extremely online evolution of Big Finance itself, a kind of decentralized hedge fund duking it out with other hedge funds. The typical day trader is a pretty well-off man in his 30s, and various reports so far show that some of the Reddit group’s leading members are current and former finance workers, some of whom make enough money to live in gated communities. By using a message board to move markets and cream billionaires, they’ve done something truly fascinating. But while some Redditors made millions recently, the largest holders of GameStop stock, like the giant asset manager BlackRock, made billions. None of this has anything to do with “the little guy”—a moniker that, by any reasonable definition, refers to the roughly 50 percent of American adults with no money whatsoever in the stock market and who probably shouldn’t kick off their investment career by buying into a mania.

The story isn't terribly long, but this gives you a good idea of how the rest of it goes if you can't link to it.


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Subject: RE: BS: G A M E S T O P and market plays
From: leeneia
Date: 08 Feb 21 - 11:17 AM

What the story overlooks is the game-changing power of the Internet to bring kooks together. Whether it's 8000 vandals charging the Capitol, 400 teenagers showing up for a beer party, or a cadre of "rebels" vandalizing a hedge fund, it's a new phenomenon in our society, and it's one we are not equipped to deal with.


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Subject: RE: BS: G A M E S T O P and market plays
From: Mr Red
Date: 09 Feb 21 - 05:44 AM

Quite. I thought the Arab spring was a breath of fresh air. And how did that go?

Obama was a breath of fresh air. And Putin noticed! So did Putin's Puppies. You know who they are.


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Subject: RE: BS: G A M E S T O P and market plays
From: Stilly River Sage
Date: 10 Feb 21 - 10:36 AM

So is this tempest in a teapot over? How will it shake out for Gamestop as the stock recedes in value and (again) hedge funds can sell short? I looked at my modest investment account - it is back to it's original level and a little more. (In hindsight I can see that I made a wise move to invest the first stimulus check there last April, in effect buying at the lowest point we've seen in ages, and the share values have now resumed their typical level.)


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Subject: RE: BS: G A M E S T O P and market plays
From: robomatic
Date: 10 Feb 21 - 02:52 PM

It's the eternal story of trying to get a leg up.

A recent book about real competition, not all of it strictly on the up and up, was "The Flash Boys" by Michael Lewis. It involved the uncovering of a scheme to place stock trades through electronic means ahead of legitimate traders by placing copies of their trades through faster electronic pathways, thus gaming their plays.

A recent movie which I don't believe is based on real events, but I found absorbing while I was watchine, was "The Hummingbird Project" about a competition to establish a fast data line from Kansas City to New York City. It had Salma Hayek, Alexander Skarsgård, and Jesse Eisenberg.

And I heard a very intersting story from my extended family about a ne-er do well who made his family proud when he became a telegraph operator, only to undo some of that pride when he used his skills to promote crooked stock trading via electrical means. We're talking Morse code in this case!

I don't think we've heard the last of this type of story. Because it's not really a new story.


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Subject: RE: BS: G A M E S T O P and market plays
From: punkfolkrocker
Date: 10 Feb 21 - 03:55 PM

No time to google right now for confirmation.
But vague memories of a history documentary about the first transatlantic cable
being secretly rigged at one end for illegal trading...??????


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Subject: RE: BS: G A M E S T O P and market plays
From: punkfolkrocker
Date: 10 Feb 21 - 04:01 PM

.. or it could have been first transatlantic radio connection...???


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Subject: RE: BS: G A M E S T O P and market plays
From: DonMeixner
Date: 13 Feb 21 - 08:48 AM

I don't understand how buying short works, I don't see how Robin Hood is capable of stopping trade on a duly registered stock. I don't understand how they continue to make pennies in the US when they cost twice as much to make as their purchase ability.

What I do understand is that this dicking around in the silver and gold market has destabilized my jewelry craft business. With the COVID pandemic essentially putting me out of business for the past year by causing the cancellation of craft shows the instability in the metals market makes it impossible for me to buy metals at a price I can reasonably make up for resale. This is still a problem for big manufacturers but it is an impossible situation for One Off operations like mine.

Don Meixner


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Subject: RE: BS: G A M E S T O P and market plays
From: leeneia
Date: 14 Feb 21 - 04:19 PM

I'm sorry to hear about the destruction of your jewelry business, Don. That is truly sad. (I like to make jewelry, too, but I don't use silver and gold. But I know how nice it feels to have something beautiful come from the work of your hands.)
===============
How short trading works:

A person, Mr. First, owns shares of a stock, let's call it Falter Co.

A trader, Mr. Trader, thinks Falter Co. will be going down in price.
Mr. Trader goes to Mr. First and says "Let me borrow 100 of your shares. I will return 100 shares to you in six months along with a small interest payment." At this time, Falter Co. shares are selling for $25 a share.

Soon Mr. Trader sells the shares to a buyer, Mr. Second, and he gets $2500 for them.

Six months pass, and Falter Co. shares have dropped to $15. Mr. Trader buys 100 shares on the market for $1500 and gives them to Mr. First along with the small interest payment. He has a profit of almost $1000.
=============
Recently I asked my broker if it becomes public knowledge when a person is trading in shorts, and my broker said it is. What happened with Gamestop is that a group of lads on Reddit found out that hedge fund managers were shorting Gamestop, and they decided, apparently out of pure malice and class prejudice, to start buying Gamestop and driving the price up, merely to stick it to people they were jealous of for being rich.

Along the way, they were operating on the greater-fool theory, one lad buying Gamestop at an inflated price and then selling it to another at an even-more inflated price. Ultimately there will be a last buyer who loses his shirt, but they didn't want to talk about that.

This wouldn't have happened if not for the power of the Internet to bring kooks together.


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