I've always had my foot in the market, but only through mutual funds in the last few years. However, I pulled my money out of the fund and started playing the market regularly in November last year. I've gone from having 20 stocks on my watch list to having closer to 200. I'm not legally a "day trader", but I buy and sell several times a day - I just can't buy and sell a stock the same day...well, I can but I get warned and if I do so three times in 5 days my account gets suspended (on TD-Ameritrade anyway). So anyway, I'm up 50% in 10 weeks and having a lot of fun studying, researching, buying and selling. Mostly small and mid-caps. Just wondering if there is anyone else on here that does the same thing. I've spent so much time playing with stocks in the last few weeks that I've not had much to say on here about the Giants or other subjects. That will change as we get closer to draft day.
I do. I don't have a lot of patience so I bet on microcap stocks that are usually OTC. I had one nice hit but most of my picks didn't pan out. One went dark. One was poorly managed and was ran into the ground. Another one was kicked off of the OTC and now trades on the grey market.
I have only two stocks now and I like my chances. I learned something in my bad picks. One of my stocks is not a microcap and it soon won't be a small cap. I like the business model. The chairman and CEO is from India the country and he manages retirement accounts for 35k Indians. He also has connections with billionaires. His company is focused on buying companies at value or distressed prices. His company does intense research around the world. He either buys companies for his own group using the mentioned retirement funds or he locates companies for other companies or billionaires to buy. He gets a nice 13% commission. These are not 1 to 2 million dollar transactions. They are up to a billion dollar transaction. They are growing fast. There are only 6.9 million shares and only a 350k float.
The down side is they have yet to file financials with the SEC so that is one reason the are trading at $3.50/share. That's about a four year time span. One investor told me the reason they have not filed yet is because they were focused on building the company and only started having revenue months ago. The CEO swears up and down that all the financials will be filed with the SEC by the end of this month. He plans to apply for the NYSE in the spring. The CEO was once a market maker in the Indian exchange so he is a market man and knows how to get the story out there. Most of the 6.9 million shares are with family and friends so the motivation is there to unlock shareholder value. The book value of the stock is projected to be $300/share in the not so distant future(not sure of time frame). So this could be a 100-300 bagger some day but obviously many things can go wrong. The shorts are betting the company won't file the financials by the end of this month. The company didn't follow through on filing the financials before so there is skepticism but the CEO sounds convincing to me that this time is different. So my 6k investment could be 300k-900K somewhere in the future. Wish me luck. If it hits, I will buy steak dinners at the next BBH get together.
We use a financial advisor for quite a few years and are pretty happy with him. We are VERY conservative in our approach now that we are older and retired, but we were always sort of that way. I don't care if I make a bundle, I just want to sleep quite comfortably at night. We are very happy with our slow but sure approach. Won't become rich but will also stay off the window ledge.
Quote from: squibber on January 23, 2021, 06:03:55 PM
I do. I don't have a lot of patience so I bet on microcap stocks that are usually OTC. I had one nice hit but most of my picks didn't pan out. One went dark. One was poorly managed and was ran into the ground. Another one was kicked off of the OTC and now trades on the grey market.
I have only two stocks now and I like my chances. I learned something in my bad picks. One of my stocks is not a microcap and it soon won't be a small cap. I like the business model. The chairman and CEO is from India the country and he manages retirement accounts for 35k Indians. He also has connections with billionaires. His company is focused on buying companies at value or distressed prices. His company does intense research around the world. He either buys companies for his own group using the mentioned retirement funds or he locates companies for other companies or billionaires to buy. He gets a nice 13% commission. These are not 1 to 2 million dollar transactions. They are up to a billion dollar transaction. They are growing fast. There are only 6.9 million shares and only a 350k float.
The down side is they have yet to file financials with the SEC so that is one reason the are trading at $3.50/share. That's about a four year time span. One investor told me the reason they have not filed yet is because they were focused on building the company and only started having revenue months ago. The CEO swears up and down that all the financials will be filed with the SEC by the end of this month. He plans to apply for the NYSE in the spring. The CEO was once a market maker in the Indian exchange so he is a market man and knows how to get the story out there. Most of the 6.9 million shares are with family and friends so the motivation is there to unlock shareholder value. The book value of the stock is projected to be $300/share in the not so distant future(not sure of time frame). So this could be a 100-300 bagger some day but obviously many things can go wrong. The shorts are betting the company won't file the financials by the end of this month. The company didn't follow through on filing the financials before so there is skepticism but the CEO sounds convincing to me that this time is different. So my 6k investment could be 300k-900K somewhere in the future. Wish me luck. If it hits, I will buy steak dinners at the next BBH get together.
Sounds like the kind of company I'd roll the dice with. Now that I've made quite a bit, I'm getting more and more nervous as I think the market is quite overblown. I've had Tesla, but I'm out now and don't trust it. The stock is literally trading as if the car company is several times more valuable than all the other car companies in the world combined. That scares me. Trading at 800+ and I've read it will go to 1200 as well as drop to 200. Financially, it makes no sense.
I am not into the FANG stocks, although if I was going long term, I'd have a bundle in Amazon and Walmart. But I follow the small cap/ mid cap tech sector and with a Biden Presidency I like all green energy stocks (except Tesla and Nio). The semi-conductor industry and the new gene editing companies are also fun to watch. Crypto stocks have heaped rewards for me as well as kicked me in the rear end. Staying away from crypto for awhile. Anything in the EV world is going nuts as well as the Fuel Cell (Hydrogen) stocks - they've been running wild; however, very volatile and not for the faint of heart, LOL
Lenn, I know what you mean. 90% of my money is in very conservative investments. I like to swing for the fences a little because it could mean lots of fun travel, etc..
Jolly Blue,
I lost money in a gene editing company. They are on the grey market now. They came out with a Covid test and shortly after, the SEC came down on them. No one seems to know if there was any wrong doing but the stock is still on the grey market after 9 months.
I think the market is quite overblown too. If I make money on my two gambles, I will sit on the money for a while. If there is a big correction down the road, I probably will buy some undervalued stuff.
I'm sure you know the Federal Reserve is a big reason why the market is holding it's value but how long can the FR do that?
Quote from: squibber on January 24, 2021, 09:55:27 AM
Jolly Blue,
I lost money in a gene editing company. They are on the grey market now. They came out with a Covid test and shortly after, the SEC came down on them. No one seems to know if there was any wrong doing but the stock is still on the grey market after 9 months.
I think the market is quite overblown too. If I make money on my two gambles, I will sit on the money for a while. If there is a big correction down the road, I probably will buy some undervalued stuff.
I'm sure you know the Federal Reserve is a big reason why the market is holding it's value but how long can the FR do that?
In general, I stay away from pharm/health stocks (including gene editing). They seem to lose money day after day and suddenly pop 20% only to lose it all the next day. I am incredibly interested in gene editing though. Gene editing is supposed to be the most incredible discovery of the 21 century and by reprogramming genes will be able to defeat cancer and pretty much every other disease. But you are spot on - you'd never know it by watching their stock. It will be an incredible addition to medical care that borderlines a "God-like miracle". I figure I will die just before the process is perfected, LOL
Trying to figure out when the next big correction will be is tough. It could be tomorrow or months from now as a bull market runs wild. I'm sure that once the bond market picks up as well as the first real signs of the inevitable coming inflation. I kind of think nothing is going to change though until this damn pandemic is under control. Once life returns to normal things will happen rapidly and probably not in good ways for growing a cash reserve. I just hope I have my money on the sidelines once the big correction hits!
I've personally only bought stock one time, and it was on a whim. Luckily I hit a home run. Back in the fall of 2007 MGM was selling for around $100 a share. By 1Q09 is was under $2 a share. Believing it couldn't go much lower, and once the recession was over it would likely go up as people start spending money once again, I convinced my wife we should jump on it, and we did - several thousand dollars worth. Last year it hit $36 a share and we sold some. Got all our money back and a bunch more. Today it's sitting around $30 a share and we still own more than half of what we bought. It's our rainy day fund that, no matter what happens from here on out, we've already made money on.
Quote from: Sem on January 24, 2021, 05:16:28 PM
I've personally only bought stock one time, and it was on a whim. Luckily I hit a home run. Back in the fall of 2007 MGM was selling for around $100 a share. By 1Q09 is was under $2 a share. Believing it couldn't go much lower, and once the recession was over it would likely go up as people start spending money once again, I convinced my wife we should jump on it, and we did - several thousand dollars worth. Last year it hit $36 a share and we sold some. Got all our money back and a bunch more. Today it's sitting around $30 a share and we still own more than half of what we bought. It's our rainy day fund that, no matter what happens from here on out, we've already made money on.
That was a great play. The dream of every investor.
Quote from: LennG on January 23, 2021, 07:30:08 PM
We use a financial advisor for quite a few years and are pretty happy with him. We are VERY conservative in our approach now that we are older and retired, but we were always sort of that way. I don't care if I make a bundle, I just want to sleep quite comfortably at night. We are very happy with our slow but sure approach. Won't become rich but will also stay off the window ledge.
Len,
You are being very smart. Here is the thing, the older you are the more conservative your investing should be. When you are younger you can easily ride out a market downturn (or two). As you get older and you are often cashing out investments a market downturn could cost you a lot of money.
JBG,
To answer your question, I am an investor, not a trader. I buy stocks I like and hold on to them. Recently I have been looking at ETFs over individual stocks as I can get the benefits of what I believe to be a good market to invest in without the risk of betting on a single company.
I have had some hits, but I have had stocks that seriously bellied up. My research was thorough and yet it never uncovered the danger or warning signs.
As for beating the market, I am mindful that three are experts with more knowledge, experience, education, and resources than me. That's why I prefer to just invest.
Also I remember a saying- "for every trade there is a person that thinks they are doing the right thing buying, while there is another person who thinks they are doing the right thing selling"
Quote from: MightyGiants on January 25, 2021, 01:36:13 PM
Len,
You are being very smart. Here is the thing, the older you are the more conservative your investing should be. When you are younger you can easily ride out a market downturn (or two). As you get older and you are often cashing out investments a market downturn could cost you a lot of money.
JBG,
To answer your question, I am an investor, not a trader. I buy stocks I like and hold on to them. Recently I have been looking at ETFs over individual stocks as I can get the benefits of what I believe to be a good market to invest in without the risk of betting on a single company.
I have had some hits, but I have had stocks that seriously bellied up. My research was thorough and yet it never uncovered the danger or warning signs.
As for beating the market, I am mindful that three are experts with more knowledge, experience, education, and resources than me. That's why I prefer to just invest.
Also I remember a saying- "for every trade there is a person that thinks they are doing the right thing buying, while there is another person who thinks they are doing the right thing selling"
That's a few great sayings about the market. Another one is, "Value stocks are about as exciting as watching grass grow, but have you ever noticed just how much your grass grows in a week?"
"The stock market is a device for transferring money from the impatient to the patient"
"More money has been lost selling in fear of a decline than actual money lost in a decline"
"Buy when everyone else is selling and hold when everyone else is buying. This is not merely a catchy slogan. It is the very essence of successful investments"
"Many people rush into the game of investing thinking they are predators. When they get to the middle of the game, they then realize they are the prey"
"No price is too low for a bear or too high for a bull"
Anyway, I have bought into a couple of ETFs and it's definitely a safer (albeit slower) move. But the turtle always beats the rabbit in the end, LOL
this is a troubling new trend
https://www.huffpost.com/entry/in-battle-over-gamestop-shares-two-big-players-flinch_n_60119c83c5b67848ee7d4deb
It's also why I am glad I am an investor and not a trader.
I trade everyday. What happening right now with GME and other stocks it
Quote from: MightyGiants on January 27, 2021, 01:14:54 PM
this is a troubling new trend
https://www.huffpost.com/entry/in-battle-over-gamestop-shares-two-big-players-flinch_n_60119c83c5b67848ee7d4deb
It's also why I am glad I am an investor and not a trader.
The new "Robinhooders" (those who trade on Robinhood) are millennials who are driving traditional stock professionals crazy. The youngsters treat it like it's a game and try to outsmart the big guys. They certainly did with GameStop, which is now trading as though the little store is twice as valuable as WalMart. They understand how big guys set up computers to automatically buy and sell using the "short selling" method. In fact, the computers do all the work for them and the computers simply mine money from the market and at night time, the big guys look at how much money was siphoned off the system for the day before heading home to their mansions. So a huge group of the Robinhood 20-something kids communicated via a website to target them by pushing up the price of GameStop forcing the big guys (well...their computers do it automatically) to buy the stock because it doesn't short as long as the stock doesn't fail (go lower); therefore, the computer automatically buys it back. Hence, some big hedge funds have nearly gone bankrupt while some kids have become millionaires overnight and at least three guys have made over a billion dollars from it. Since the stock has been sitting around 5.00 a share for the last couple years and the company just went into debt to keep the company afloat, it made sense for the big guys to short it betting on it to fail. So if you bought a thousand dollars worth of stock, it would have been worth over 9 million dollars at the close yesterday. Gotta hand it to the kids, they took down some fat cats and became very wealthy. And it was all legal. And quite frankly, genius.
I am sure the SEC will come up with new regulations to keep that from happening again. Protect the big cats!
I've read some complaints by the fat cats on Wall Street hating on the Robinhooders. One guy wrote, "go ahead kid - you're so smart - nothing could go wrong....and make sure to use all your margin...etc., etc."
One kid responded, "my grandfather left me 100,000 dollars and I turned it into 800,000 in the past year. Now I've gotten a professional trader and have diversified 75% of it into a variety of options like precious metals, various energy companies, tech, EV, etc., but have taken 200,000 to purchase real estate in a growing area near Phoenix that has nowhere but to go up. Make fun of me all you want, I am going to be a millionaire before I turn 30".
Crazy world in the stock market right now. And I love it! Keeps the big guys on their toes, LOL
Quote from: Jolly Blue Giant on January 28, 2021, 03:44:53 PM
The new "Robinhooders" (those who trade on Robinhood) are millennials who are driving traditional stock professionals crazy. The youngsters treat it like it's a game and try to outsmart the big guys. They certainly did with GameStop, which is now trading as though the little store is twice as valuable as WalMart. They understand how big guys set up computers to automatically buy and sell using the "short selling" method. In fact, the computers do all the work for them and the computers simply mine money from the market and at night time, the big guys look at how much money was siphoned off the system for the day before heading home to their mansions. So a huge group of the Robinhood 20-something kids communicated via a website to target them by pushing up the price of GameStop forcing the big guys (well...their computers do it automatically) to buy the stock because it doesn't short as long as the stock doesn't fail (go lower); therefore, the computer automatically buys it back. Hence, some big hedge funds have nearly gone bankrupt while some kids have become millionaires overnight and at least three guys have made over a billion dollars from it. Since the stock has been sitting around 5.00 a share for the last couple years and the company just went into debt to keep the company afloat, it made sense for the big guys to short it betting on it to fail. So if you bought a thousand dollars worth of stock, it would have been worth over 9 million dollars at the close yesterday. Gotta hand it to the kids, they took down some fat cats and became very wealthy. And it was all legal. And quite frankly, genius.
I am sure the SEC will come up with new regulations to keep that from happening again. Protect the big cats!
I've read some complaints by the fat cats on Wall Street hating on the Robinhooders. One guy wrote, "go ahead kid - you're so smart - nothing could go wrong....and make sure to use all your margin...etc., etc."
One kid responded, "my grandfather left me 100,000 dollars and I turned it into 800,000 in the past year. Now I've gotten a professional trader and have diversified 75% of it into a variety of options like precious metals, various energy companies, tech, EV, etc., but have taken 200,000 to purchase real estate in a growing area near Phoenix that has nowhere but to go up. Make fun of me all you want, I am going to be a millionaire before I turn 30".
Crazy world in the stock market right now. And I love it! Keeps the big guys on their toes, LOL
JBG,
Big cat or little cat, it makes no difference to me. I abhor market manipulation as it effectively screws over everyone not "in the know". I have heard the arguments that try to justify wrongdoing (like manipulating the market) by saying it's okay because it harms the big cats and how the big cats are "already manipulating the markets". I feel very strongly that two wrongs don't make a right and when market integrity is breached it harms all of us who invest.
I think a good analogy would be approving of refs throwing a game in the Giant's favor because they were playing the hated Cowboys. Sure you destroy the integrity of the game, but boy do we hate the Cowboys and love to see them lose. For me, that isn't how I roll
Thing is if WE screw up and lose money we don
Quote from: MightyGiants on January 27, 2021, 01:14:54 PM
this is a troubling new trend
https://www.huffpost.com/entry/in-battle-over-gamestop-shares-two-big-players-flinch_n_60119c83c5b67848ee7d4deb
It's also why I am glad I am an investor and not a trader.
This is very, very, very worrying.
But I am sure the SEC will be monitoring this closely. Matter of fact there are selling restrictions applied on this stock I believe.
Overall, the volatility on this stock is absolutely unbelievable. To me, this is a Ramping / Pump and Dump scheme. Problem is that if you do not monitor the communications between the individuals in agreement to put those schemes up you will never find anything from an order / trade manipulation perspective as they potentially fly under the radar with lower volumes.
I have digged a little deeped on that, and there's 2 sides of things:
1. The Dodd Frank Regulation clearly forbits naked short sellings. First issue is how can a Hedge Fund go naked short if it's against the Rules? Second issue is, how can they go short with a value that is 140% of the oustanding shares through levereged products?
2. The scheme that has been put up by hobbytraders / retail investors is wrong. In fact the selling restrictions put in place aim to limit speculators.
Quote from: Jolly Blue Giant on January 28, 2021, 03:44:53 PM
The new "Robinhooders" (those who trade on Robinhood) are millennials who are driving traditional stock professionals crazy. The youngsters treat it like it's a game and try to outsmart the big guys. They certainly did with GameStop, which is now trading as though the little store is twice as valuable as WalMart. They understand how big guys set up computers to automatically buy and sell using the "short selling" method. In fact, the computers do all the work for them and the computers simply mine money from the market and at night time, the big guys look at how much money was siphoned off the system for the day before heading home to their mansions. So a huge group of the Robinhood 20-something kids communicated via a website to target them by pushing up the price of GameStop forcing the big guys (well...their computers do it automatically) to buy the stock because it doesn't short as long as the stock doesn't fail (go lower); therefore, the computer automatically buys it back. Hence, some big hedge funds have nearly gone bankrupt while some kids have become millionaires overnight and at least three guys have made over a billion dollars from it. Since the stock has been sitting around 5.00 a share for the last couple years and the company just went into debt to keep the company afloat, it made sense for the big guys to short it betting on it to fail. So if you bought a thousand dollars worth of stock, it would have been worth over 9 million dollars at the close yesterday. Gotta hand it to the kids, they took down some fat cats and became very wealthy. And it was all legal. And quite frankly, genius.
I am sure the SEC will come up with new regulations to keep that from happening again. Protect the big cats!
I've read some complaints by the fat cats on Wall Street hating on the Robinhooders. One guy wrote, "go ahead kid - you're so smart - nothing could go wrong....and make sure to use all your margin...etc., etc."
One kid responded, "my grandfather left me 100,000 dollars and I turned it into 800,000 in the past year. Now I've gotten a professional trader and have diversified 75% of it into a variety of options like precious metals, various energy companies, tech, EV, etc., but have taken 200,000 to purchase real estate in a growing area near Phoenix that has nowhere but to go up. Make fun of me all you want, I am going to be a millionaire before I turn 30".
Crazy world in the stock market right now. And I love it! Keeps the big guys on their toes, LOL
This trend is making INVESTORS lose confidence into the markets, and this is worrying. In fact the Swiss Market Index is down 2% today. Why? Because of the lack of confidence into the markets.
We can talk about transparency and all that buzz as long as we want, but is this transparent? No, it's not.
Quote from: GordonGekko80 on January 29, 2021, 07:26:52 AM
I have digged a little deeped on that, and there's 2 sides of things:
1. The Dodd Frank Regulation clearly forbits naked short sellings. First issue is how can a Hedge Fund go naked short if it's against the Rules? Second issue is, how can they go short with a value that is 140% of the oustanding shares through levereged products?
2. The scheme that has been put up by hobbytraders / retail investors is wrong. In fact the selling restrictions put in place aim to limit speculators.
I think you are mixing up two different things. Short selling by its nature is "naked" (meaning you don't have the shares)
What you are referring to involves options trading (which is essentially is buying or selling the right to buy or sell stocks at a given price in the future). If you buy and option to sell stocks (a call) you don't actually own. The Dodd-Frank act actually covers something similar but with Mortgages
I think a simple way to look at this is
The hedge firms were engaging in perfectly legal and legit investments involving short selling. When you short sell you are betting that a stock will go down in price and you essentially "borrow the stock" and agree to buy it at a later date to pay those stocks you owe back. Short selling has been around for a long long time and it's a way for investors to make money in a bear (when markets are going down) market or if you think a company's stock is going down. It's a risky investment in the sense that stocks have theoretical unlimited upsides and the losses are hence unlimited.
What the people on Reddit did was get together as a group and MANIPULATE the price of a stock to go up with coordinated buying.
So while the "big cats" are ingrained in many people's minds as always being the evil villains, in this case, they were not. On the other hand, any action intended to CHANGE the price of a stock (rather than betting on the natural changes) is immoral and unethical and harms all investors not involved in the scheme
The Reddit community pumped the price with a coordinated action (so called "collusion" practice, which is forbidden from a Market Manipulation standpoint) to a level where the hedge funds needed to buy the stocks to cover their shorts and limit their losses, which made the price spike even further.
But: How can a platform, like for example Robbinhood, restrict trading in GME for Retailers then, while professional investors such as Hedge Funds, can continue trading normally?
Another question:
Who owns Robbinhood? 70% Citadel.
Who owns the Hedge Funds which were short? Citadel.
Is this not also a clear conflict of interest?
Quote from: MightyGiants on January 29, 2021, 09:03:59 AM
any action intended to CHANGE the price of a stock (rather than betting on the natural changes) is immoral and unethical and harms all investors not involved in the scheme
The prices we're seeing in GME, AMC or BBBY are disconnected from any fundamentals whatsoever. This is what harms the markets and the investors in general.
This will be a hollywood movie at some point for sure.
Quote from: GordonGekko80 on January 29, 2021, 09:20:44 AM
The Reddit community pumped the price with a coordinated action (so called "collusion" practice, which is forbidden from a Market Manipulation standpoint) to a level where the hedge funds needed to buy the stocks to cover their shorts and limit their losses, which made the price spike even further.
But: How can a platform, like for example Robbinhood, restrict trading in GME for Retailers then, while professional investors such as Hedge Funds, can continue trading normally?
Another question:
Who owns Robbinhood? 70% Citadel.
Who owns the Hedge Funds which were short? Citadel.
Is this not also a clear conflict of interest?
If we get into the Robinhood investment platform and it's the relationship with hedge funds we go down a rabbit hole full of questionable ethics and practices. Perhaps the most troubling is that Robinhood's relationship with a hedgefund allows that hedgefund to know all the sell and buy requests of those traders before they are executed
Quote from: GordonGekko80 on January 29, 2021, 09:28:55 AM
The prices we're seeing in GME, AMC or BBBY are disconnected from any fundamentals whatsoever. This is what harms the markets and the investors in general.
This will be a hollywood movie at some point for sure.
Robinhooders have been disconnected from fundamentals for a long time now. It goes to the old stock trader's saying, "when you start, it's all about the money, but at some point it becomes all about the game". This morning I've read that Blockbuster Video (has been bankrupt and in solvency for a long time and has only one store left [in Bend, Oregon]) is up 700%! =))
I have no problem with it at all. I don't hate the rich. I say "more power to them", they figured out a way to beat the system so now they live in luxury in a high rise condo and keep a million dollar yacht in Miami along with their second home along the beach. However, they have also become complacent knowing they can simply let their expensive computers and their algorithms keep their cash flow coming. They beat the system. Now there's a new group that is "beating the system" at the expense of those who live the good life from beating the system. The little guy pushing back...and winning.
I suspect the insiders will come up with a method to protect their monopoly on milking the market like a farmer milks his cows. I don't know if there is a good football analogy here. It's probably closer to the "Battle of Bighorn" where Custer had sophisticated weaponry and training, but was overwhelmed by a hoard of angry natives with far inferior weapons.
As a side note, this morning on TD Ameritrade (the platform I use) I got this warning:
"
Securities with trading restrictionsWe have placed some restrictions on the following securities. These restrictions will not prevent clients from making basic buy and sell transactions. This list is as of January 28, 2021, 4:00PM ET.
AMC, CVM, EXPR, FOSL, GME, NOK, BB, BBBY, FIZZ, GSX, IRBT, NCMI, TR, UONE, VIR, NAK, NAKD, DDS, KOSSThe following restrictions are in place:
- Stocks - 100% holding requirement (not marginable)
- Long calls and puts are allowed
- Covered call and short put orders may only be placed with a broker. Please be aware that wait times to speak with a broker may be longer than normal due to current market conditions.
- Covered calls only allowed if your account currently has the shares
- Short puts only if you have the maintenance/cash to cover the entire exercise amount of the short puts
- All other complex options orders will not be accepted
- We may also implement additional restrictions on the opening of option trades that expire Friday, January 29th
Please keep in mind that this list is not inclusive of every security restriction and may change at any time."
Quote from: Jolly Blue Giant on January 29, 2021, 09:57:09 AM
Robinhooders have been disconnected from fundamentals for a long time now. It goes to the old stock trader's saying, "when you start, it's all about the money, but at some point it becomes all about the game". This morning I've read that Blockbuster Video (has been bankrupt and in solvency for a long time and has only one store left [in Bend, Oregon]) is up 700%! =))
I have no problem with it at all. I don't hate the rich. I say "more power to them", they figured out a way to beat the system so now they live in luxury in a high rise condo and keep a million dollar yacht in Miami along with their second home along the beach. However, they have also become complacent knowing they can simply let their expensive computers and their algorithms keep their cash flow coming. They beat the system. Now there's a new group that is "beating the system" at the expense of those who live the good life from beating the system. The little guy pushing back...and winning.
I suspect the insiders will come up with a method to protect their monopoly on milking the market like a farmer milks his cows. I don't know if there is a good football analogy here. It's probably closer to the "Battle of Bighorn" where Custer had sophisticated weaponry and training, but was overwhelmed by a hoard of angry natives with far inferior weapons.
As a side note, this morning on TD Ameritrade (the platform I use) I got this warning:
"Securities with trading restrictions
We have placed some restrictions on the following securities. These restrictions will not prevent clients from making basic buy and sell transactions. This list is as of January 28, 2021, 4:00PM ET.
AMC, CVM, EXPR, FOSL, GME, NOK, BB, BBBY, FIZZ, GSX, IRBT, NCMI, TR, UONE, VIR, NAK, NAKD, DDS, KOSS
The following restrictions are in place:
- Stocks - 100% holding requirement (not marginable)
- Long calls and puts are allowed
- Covered call and short put orders may only be placed with a broker. Please be aware that wait times to speak with a broker may be longer than normal due to current market conditions.
- Covered calls only allowed if your account currently has the shares
- Short puts only if you have the maintenance/cash to cover the entire exercise amount of the short puts
- All other complex options orders will not be accepted
- We may also implement additional restrictions on the opening of option trades that expire Friday, January 29th
Please keep in mind that this list is not inclusive of every security restriction and may change at any time."
JBG,
Do you see a difference between betting on a price going up or down (not actually affecting the price) and actively conspiring to change the price of a stock?
It seems to me, a lot of people are acting like short selling is some sort of sinister unethical action, which it is not. They act like hedge funds are these sinister organizations when they are just private mutual funds that have pretty high fees (which had them out of favor for many years).
I believe very firmly that using insider knowledge or actively conspiring to change the price of a stock is both highly unethical and very harmful to investors, the market, and ultimately our economy. The market needs to allow market forces to change prices, not some billionaire, not a bunch of people on Reddit, not any person. You talked about doing stock research. What schemes people are plotting to change a stock price is not something you can generally research
Quote from: MightyGiants on January 29, 2021, 09:46:47 AM
If we get into the Robinhood investment platform and it's the relationship with hedge funds we go down a rabbit hole full of questionable ethics and practices. Perhaps the most troubling is that Robinhood's relationship with a hedgefund allows that hedgefund to know all the sell and buy requests of those traders before they are executed
Does Frontrunning ring a bell? /sarcasm/
Robinhood has articulated their restrictions with the fact that they were asked to post 1bln USD in Margins as Security to the Clearing Houses.
Well, go ask Citadel for that then...
@ JBG - Isn't TD Ameritrade owned by Charles Schwab?
Quote from: GordonGekko80 on January 29, 2021, 10:17:41 AM
Does Frontrunning ring a bell? /sarcasm/
Robinhood has articulated their restrictions with the fact that they were asked to post 1bln USD in Margins as Security to the Clearing Houses.
Well, go ask Citadel for that then...
@ JBG - Isn't TD Ameritrade owned by Charles Schwab?
Yes, Schwab purchased it last year
Quote from: Jolly Blue Giant on January 29, 2021, 10:26:34 AM
Yes, Schwab purchased it last year
Not sure they were involved in the shorts too, though.
Apart from TD, WeBull have also restricted the opening of new positions.
The explanation across the board appears to be the Clearing House asking for that restriction to be applied - simply because the margins to be posted on such volatile issuers are extremely high (e.g. the more volatile, the more the margins cost).
Obviously this leads to expensive Margin Calls, such as the one of 1bn USD to Robinhood, which is massive.
But obviously the constellation of Robinhood vs Citadel being a major shareholder of Robinhood vs Citadel's Hedge Funds being short GME is one that looks really, really bad. That's the worst part of it all I think.
So when a big firm downgrades a stock and makes it go down and makes money on that dip which might create a panic sell and make them more money. How
Quote from: Grime Time on January 29, 2021, 10:55:15 AM
So when a big firm downgrades a stock and makes it go down and makes money on that dip which might create a panic sell and make them more money. How
Quote from: MightyGiants on January 29, 2021, 10:13:15 AM
JBG,
Do you see a difference between betting on a price going up or down (not actually affecting the price) and actively conspiring to change the price of a stock?
It seems to me, a lot of people are acting like short selling is some sort of sinister unethical action, which it is not. They act like hedge funds are these sinister organizations when they are just private mutual funds that have pretty high fees (which had them out of favor for many years).
I believe very firmly that using insider knowledge or actively conspiring to change the price of a stock is both highly unethical and very harmful to investors, the market, and ultimately our economy. The market needs to allow market forces to change prices, not some billionaire, not a bunch of people on Reddit, not any person. You talked about doing stock research. What schemes people are plotting to change a stock price is not something you can generally research
I have no problem with those who short sell. It's a high risk method to make or lose a lot of money. Not all hedge funds are short-selling to grow their customer's value (as far as I know anyway). I own a couple shares of Blackrock that focuses on long term value stocks. They have over seven trillion dollars in stock holdings of course. Their top holdings are Apple, Microsoft, Amazon, Facebook, Alphabet, etc. The reason I bought stock in Blackrock is because Biden has loaded up his advisory board and administration with Blackrock's top execs (Chief Executive Larry Fink will serve as a top official at the Treasury Dept; Blackrock's investment executive Brian Deese will head Biden's National Economic Council; Adewale "Wally" Adeyemo, former chief of staff to BlackRock chief executive Larry Fink will be a top official at the Treasury Department; Michael Pyle [BlackRock's global chief investment strategist] is going to be chief economic advisor to Vice President-elect Kamala Harris). Biden has ridden the Whitehouse of Goldman Sachs, Trump's primary team of economic strategists. For all practical purposes, Blackrock will be running the economy through Biden.
As far as the Robinhood millennials toying with the system, they are subject to lose as well as gain. The idea that the stock market is all about owning a small piece of a company and holding onto it to gain wealth has long left the building. Today's market is not your father's paper portfolio of train stocks and the likes of IBM, Kodak, and GE. Like it or not, it's become an electronic casino of sorts pitting wit against wit. And the big guys have a huge advantage because they can (and do) pay "professional analysts" to write pieces in the WSJ, or Baron's or Forbes or Motley Fool about a stock that is going to run or pull back so that the big guys can manipulate your thoughts and potential moves. You can no longer just study PE ratios and look at revenues and growth as a good indicator. Now it's all about momentum and the latest trend.
I got a kick out of a recent article about the SPAC offering of Canoo (a new Electric Vehicle (EV) stock) that raised millions more than they hoped for when it hit the market as an IPO. The article talked about how crazy life is in the "new market" and said that as far as their research shows (this is a direct quote): "Canoo (GOEV) is a wannabee EV company that seems to consist of a website and a dream,
unencumbered by mundane things like factories, revenue or customers. Its shares were trading at twice the SPAC issue price last week"...LOL I will never forget that line "unencumbered by mundane things like revenue or customers". Still makes me laugh out loud. I see stocks rising on a 45 degree angle since last March that haven't had revenue in the green for several years.
Anyway, like I said, it's crazy.
Quote from: Grime Time on January 29, 2021, 10:55:15 AM
So when a big firm downgrades a stock and makes it go down and makes money on that dip which might create a panic sell and make them more money. How
Quote from: MightyGiants on January 29, 2021, 10:59:16 AM
You are suffering the harm I was talking about that was created by a bunch of Redditors conspiring to manipulate stock prices
As for big firms, they are allowed to make projections on stocks, but they are not allowed to profit on those projections
Plus: The Volcker Rule clearly forbids Principal Trading for Proprietary Purposes.
Quote from: Jolly Blue Giant on January 29, 2021, 11:03:52 AM
I have no problem with those who short sell.
But how is it possible that a company's stock can be oversold or overshorted by 140%?
This is where the system fails.
Quote from: Jolly Blue Giant on January 29, 2021, 11:03:52 AM
I have no problem with those who short sell. It's a high risk method to make or lose a lot of money. Not all hedge funds are short-selling to grow their customer's value (as far as I know anyway). I own a couple shares of Blackrock that focuses on long term value stocks. They have over seven trillion dollars in stock holdings of course. Their top holdings are Apple, Microsoft, Amazon, Facebook, Alphabet, etc. The reason I bought stock in Blackrock is because Biden has loaded up his advisory board and administration with Blackrock's top execs (Chief Executive Larry Fink will serve as a top official at the Treasury Dept; Blackrock's investment executive Brian Deese will head Biden's National Economic Council; Adewale "Wally" Adeyemo, former chief of staff to BlackRock chief executive Larry Fink will be a top official at the Treasury Department; Michael Pyle [BlackRock's global chief investment strategist] is going to be chief economic advisor to Vice President-elect Kamala Harris). Biden has ridden the Whitehouse of Goldman Sachs, Trump's primary team of economic strategists. For all practical purposes, Blackrock will be running the economy through Biden.
As far as the Robinhood millennials toying with the system, they are subject to lose as well as gain. The idea that the stock market is all about owning a small piece of a company and holding onto it to gain wealth has long left the building. Today's market is not your father's paper portfolio of train stocks and the likes of IBM, Kodak, and GE. Like it or not, it's become an electronic casino of sorts pitting wit against wit. And the big guys have a huge advantage because they can (and do) pay "professional analysts" to write pieces in the WSJ, or Baron's or Forbes or Motley Fool about a stock that is going to run or pull back so that the big guys can manipulate your thoughts and potential moves. You can no longer just study PE ratios and look at revenues and growth as a good indicator. Now it's all about momentum and the latest trend.
I got a kick out of a recent article about the SPAC offering of Canoo (a new Electric Vehicle (EV) stock) that raised millions more than they hoped for when it hit the market as an IPO. The article talked about how crazy life is in the "new market" and said that as far as their research shows (this is a direct quote): "Canoo (GOEV) is a wannabee EV company that seems to consist of a website and a dream, unencumbered by mundane things like factories, revenue or customers. Its shares were trading at twice the SPAC issue price last week"...LOL I will never forget that line "unencumbered by mundane things like revenue or customers". Still makes me laugh out loud. I see stocks rising on a 45 degree angle since last March that haven't had revenue in the green for several years.
Anyway, like I said, it's crazy.
JBG,
Believe it or not, there are still investors like myself. Look up Motley Fool (Which has great podcasts) as they are dedicated to the idea of investing in stocks rather than stock trading. You have stock options, you have short selling, you have bought on margin. Those are all tools that stock traders use.
As I said, I buy good companies (or good markets via ETFs) and sit on them. I personally like dividend stocks. I know they generally don't go up as much as other stocks, but I love the idea of making money from my investment without having to actually sell said investment.
While day traders and stock traders in general, get all the press, people like me still exist and I believe exist in large numbers. We tend the follow the principles of Warren Buffet and we try to find good companies to invest in and then hold on to those investments for a long time
I just looked at the markets today and they are all down 2% on a day that the news should have driven them higher. If I had to guess I would say the pressure driving stocks down is all the manipulation news coming from the asshats over at Reddit. People don't like to participate in something they feel is rigged
(null)
Exactly that.
Markets are totally out of sync because what was supposed to be a free market is in fact a closed market for the few only.
Just give me the same rules. It
Quote from: GordonGekko80 on February 01, 2021, 06:48:48 AM
I agree on the fact that the Rules need to be the same for everyone. Therefore:
a) DO NOT allow a stock to be over-shorted or short squeeze
b) DO NOT allow collusion, no matter if it's done by retail investors or financial institutions (the latter being forbidden by rules and regs anyways)
c) DO NOT allow the Conflict such as the one seen between Melvin Capital, Citadel and Robinhood
Point blank. I read some of the comments on the Reddit Forum; Guys advising others to hold station and sit on their position, only enter selling limits at 500 USD and above.
Don't you think that this guy saying it doesn't sell his position to make the profit? Yeh, there may be a few fundamentalists who own the position because of the "war" they started vs the Hedge Funds, but there's so many speculators in there now they don't give a damn about the money and just want to make money.
But apparently the Reddit Cowboys (this is what I have decided to call them) now are into Commodity Futures (more specifically Silver). Why? Because there is a shortage of the commodity vs the Futures (same applies for Gold btw).
In other words; Would the holders of the Futures contracts wanting to deliver the underlying there would be a shortage of the Commodity. Again, an over-shortage but this has always been a known one.
Having said that; I wish the Reddit Cowboys luck in going into physical delivery on the Futures - Warehouse Costs, Shipping, Commissions... All of those are outrageously high. Doesn't even make sense to go into Delivery on it if you don't really need it.
That is a hard one to do. Unless... they are manipulating the price yet again by colluting.
Call it what you want, but principally, the GME stock had been a "victim" of the "pump and dump" type of scheme. In the case of GME and other stocks, this scheme worked very well, especially after the Occupy Wall Street 2 moniker had been attached to the "buy and hold" advise. The OWS2 resonated with many, many people and they purchased as much GME stock as they could afford. This pumped up the stock price to an insane level, that not supported by any investment metric. The institutional investors had sold their GME and other stocks and cut their losses. They can afford to and may even get some financial aid from the feds. GameStock employees had also sold their existing stock and/or exercised their stock options.
The people initiated the "pump and dump" schema will be investigated by SEC and probably will come down hard on them. Reddit will, or already did provide the logs and the content for GME stock discussion. Based on that, it really not that hard to determine the timeline for how it started up, when OWC2 entered the picture, etc.
What left by now the many, many people, who had purchased GME stock at the inflated price. Like my daughter, who purchased two GME stock for $400, against my advise. At least she listened and put in a stop loss order. Hopefully, she'll learn that trading based on ideology isn't the best way investing in stocks.
In my view, shorting stocks, or betting, should be outlawed. It servers no other purpose, but accelerate the demise of a company and provide a windfall to the trader.
In addition, automated, digital training should be substantially restricted, like delay the actual trading. A lot of investment/trading companies run digital trading, where the latency is measured in milliseconds. This latency determines how far ahead they can get of others trading and make couple of pennies by executing the trade before others.
I recall, back in the late 90s trading companies installed direct fiber connections to the stock market, cost did not matter as long as the latency improved. Nowadays, it's short radio wave installation preferred to the stock market. The reason is simple. Fiber transfer speed is roughly 1/3 of the speed of light, while short radio waves are roughly 2/3 of the speed of light. Basically cutting fiber connection latency in half and beat other traders, who still use fiber connections...
Quote from: Blue4Life on February 01, 2021, 11:25:32 AM
Call it what you want, but principally, the GME stock had been a "victim" of the "pump and dump" type of scheme. In the case of GME and other stocks, this scheme worked very well, especially after the Occupy Wall Street 2 moniker had been attached to the "buy and hold" advise. The OWS2 resonated with many, many people and they purchased as much GME stock as they could afford. This pumped up the stock price to an insane level, that not supported by any investment metric. The institutional investors had sold their GME and other stocks and cut their losses. They can afford to and may even get some financial aid from the feds. GameStock employees had also sold their existing stock and/or exercised their stock options.
The people initiated the "pump and dump" schema will be investigated by SEC and probably will come down hard on them. Reddit will, or already did provide the logs and the content for GME stock discussion. Based on that, it really not that hard to determine the timeline for how it started up, when OWC2 entered the picture, etc.
What left by now the many, many people, who had purchased GME stock at the inflated price. Like my daughter, who purchased two GME stock for $400, against my advise. At least she listened and put in a stop loss order. Hopefully, she'll learn that trading based on ideology isn't the best way investing in stocks.
In my view, shorting stocks, or betting, should be outlawed. It servers no other purpose, but accelerate the demise of a company and provide a windfall to the trader.
In addition, automated, digital training should be substantially restricted, like delay the actual trading. A lot of investment/trading companies run digital trading, where the latency is measured in milliseconds. This latency determines how far ahead they can get of others trading and make couple of pennies by executing the trade before others.
I recall, back in the late 90s trading companies installed direct fiber connections to the stock market, cost did not matter as long as the latency improved. Nowadays, it's short radio wave installation preferred to the stock market. The reason is simple. Fiber transfer speed is roughly 1/3 of the speed of light, while short radio waves are roughly 2/3 of the speed of light. Basically cutting fiber connection latency in half and beat other traders, who still use fiber connections...
Superb analysis. I concur with everything you said, but I wonder how the whole Wall Street system (that probably runs on a bank of Cray-type computers) could differentiate between a digital buy/sell vs. a non-digital trade. I think it would be great if it's possible, but I can't think of any way to enforce it. No doubt, the heavies have an unfair advantage with superior equipment to work with; however, even a little schmuck like me can make some serious profit as long as I "buy low - sell high" of proven stocks. Of course the big guys will make more, but at least if I stick to the fundamentals there's plenty of profits for everyone. The "new millennials" (or "Robinhooders", as I like to call them) have sure made it more interesting than the stodgy old days of ticker tape and cigar filled offices. Just got to keep fully aware of the new players attempts at creative manipulations.
Quote from: Blue4Life on February 01, 2021, 11:25:32 AM
Call it what you want, but principally, the GME stock had been a "victim" of the "pump and dump" type of scheme. In the case of GME and other stocks, this scheme worked very well, especially after the Occupy Wall Street 2 moniker had been attached to the "buy and hold" advise. The OWS2 resonated with many, many people and they purchased as much GME stock as they could afford. This pumped up the stock price to an insane level, that not supported by any investment metric. The institutional investors had sold their GME and other stocks and cut their losses. They can afford to and may even get some financial aid from the feds. GameStock employees had also sold their existing stock and/or exercised their stock options.
The people initiated the "pump and dump" schema will be investigated by SEC and probably will come down hard on them. Reddit will, or already did provide the logs and the content for GME stock discussion. Based on that, it really not that hard to determine the timeline for how it started up, when OWC2 entered the picture, etc.
What left by now the many, many people, who had purchased GME stock at the inflated price. Like my daughter, who purchased two GME stock for $400, against my advise. At least she listened and put in a stop loss order. Hopefully, she'll learn that trading based on ideology isn't the best way investing in stocks.
In my view, shorting stocks, or betting, should be outlawed. It servers no other purpose, but accelerate the demise of a company and provide a windfall to the trader.
In addition, automated, digital training should be substantially restricted, like delay the actual trading. A lot of investment/trading companies run digital trading, where the latency is measured in milliseconds. This latency determines how far ahead they can get of others trading and make couple of pennies by executing the trade before others.
I recall, back in the late 90s trading companies installed direct fiber connections to the stock market, cost did not matter as long as the latency improved. Nowadays, it's short radio wave installation preferred to the stock market. The reason is simple. Fiber transfer speed is roughly 1/3 of the speed of light, while short radio waves are roughly 2/3 of the speed of light. Basically cutting fiber connection latency in half and beat other traders, who still use fiber connections...
Yeah, in the end, the whole Game Stop market manipulation was just a more elaborate version of a pump and dump that played on people's emotions and political ideologies. As is always the case those doing the manipulating made out like bandits and everyone else got screwed. What I found truly impressive if that they found a selling point that both liberals and conservatives could get on board with. This was a doctorate level class on manipulating people for profit.
Like you I hope new laws and regulations will be put in place to stop this sort of nefarious activity.
As for computer trading and the speed of trading, I suspect that is toothpaste that will never be put back in the tube.
Quote from: MightyGiants on February 06, 2021, 10:23:52 AM
Yeah, in the end, the whole Game Stop market manipulation was just a more elaborate version of a pump and dump that played on people's emotions and political ideologies. As is always the case those doing the manipulating made out like bandits and everyone else got screwed. What I found truly impressive if that they found a selling point that both liberals and conservatives could get on board with. This was a doctorate level class on manipulating people for profit.
Like you I hope new laws and regulations will be put in place to stop this sort of nefarious activity.
As for computer trading and the speed of trading, I suspect that is toothpaste that will never be put back in the tube.
Out of curiosity, I am confounded about the political angle you seem to bring up. I don't see anything political about this. Wall Street is equally divided between both sides of the political spectrum and in fact, the majority of wealthy elite are politically active for the left (Warren Buffet, Jeff Bezos, Bill Gates, Mark Zuckerberg, Jack Dorsey, George Soros, etc.) and in fact, the wealthiest of the elites in Wall Street work(ed) for BlackRock (assets measured in trillions of dollars) have left BlackRock for positions in Biden's administration. Before that, many of Trump's advisors in the financial world were from Goldman Sachs. But I would not conclude that BlackRock big wigs are liberal or that Goldman Sachs big wigs are conservative. In fact, I guarantee the people who work at both places have both liberals and conservatives sitting in their cubicles staring at computer screens all day.
This is more a story of David and Goliath where individuals who don't have private jets and a multi-million dollar escape pads in Miami and 200 ft yachts to play on, and in fact probably tend to live in one or two-story homes stuck there for a year because of the pandemic. I personally know five people who are trading regularly on Robinhood. Two of them are Trump fans, the other three Biden fans (one in particular tends to lean obnoxious in his hatred of Trump). I just don't see how individuals playing in the market have anything to do with their political affiliations. The rich have both political leanings as do the middle class and the poor.
I'm reminded of a great scene by Leonardo DiCaprio in the "Wolf of Wall Street" when he went through a fit of rage and obscenities saying, "This is OUR #%$#^ HOUSE, and we - not them - built this @#@$ system and no one else is allowed...." etc. This is simply classic small guys vs. the wealthy elite who have built a money making system for themselves and only want outside players willing to lend money to their system money for their own gain.
But don't worry, the wealthy are going to survive and come up with new ways to fleece the little guy as they relax on their yachts being waited on by a bevy of gorgeous 20-somethings to serve their every desire. No matter what his or her political affiliation, he or she will enjoy the good life til the day they die. I'm also reminded of Bill Gates saying, "you have to be a genius to turn a $1.00 into a $1.01, but if you have a 100 million dollars, you can't stop it from becoming 101 million". Money begets more money, lack thereof begets misery.
Quote from: Jolly Blue Giant on February 06, 2021, 12:32:18 PM
Out of curiosity, I am confounded about the political angle you seem to bring up. I don't see anything political about this. Wall Street is equally divided between both sides of the political spectrum and in fact, the majority of wealthy elite are politically active for the left (Warren Buffet, Jeff Bezos, Bill Gates, Mark Zuckerberg, Jack Dorsey, George Soros, etc.) and in fact, the wealthiest of the elites in Wall Street work(ed) for BlackRock (assets measured in trillions of dollars) have left BlackRock for positions in Biden's administration. Before that, many of Trump's advisors in the financial world were from Goldman Sachs. But I would not conclude that BlackRock big wigs are liberal or that Goldman Sachs big wigs are conservative. In fact, I guarantee the people who work at both places have both liberals and conservatives sitting in their cubicles staring at computer screens all day.
This is more a story of David and Goliath where individuals who don't have private jets and a multi-million dollar escape pads in Miami and 200 ft yachts to play on, and in fact probably tend to live in one or two-story homes stuck there for a year because of the pandemic. I personally know five people who are trading regularly on Robinhood. Two of them are Trump fans, the other three Biden fans (one in particular tends to lean obnoxious in his hatred of Trump). I just don't see how individuals playing in the market have anything to do with their political affiliations. The rich have both political leanings as do the middle class and the poor.
I'm reminded of a great scene by Leonardo DiCaprio in the "Wolf of Wall Street" when he went through a fit of rage and obscenities saying, "This is OUR #%$#^ HOUSE, and we - not them - built this @#@$ system and no one else is allowed...." etc. This is simply classic small guys vs. the wealthy elite who have built a money making system for themselves and only want outside players willing to lend money to their system money for their own gain.
But don't worry, the wealthy are going to survive and come up with new ways to fleece the little guy as they relax on their yachts being waited on by a bevy of gorgeous 20-somethings to serve their every desire. No matter what his or her political affiliation, he or she will enjoy the good life til the day they die. I'm also reminded of Bill Gates saying, "you have to be a genius to turn a $1.00 into a $1.01, but if you have a 100 million dollars, you can't stop it from becoming 101 million". Money begets more money, lack thereof begets misery.
JBG,
I watch the left and the right of the political spectrum with equal interest. Before I address that point, I need to back up. It sounds like you are not really familiar with the pump and dump scheme that Blue4Life correctly noted. A pump and dump scheme was one investor or a handful of investors would buy a penny stock. They would then use social media to pump up the stock providing fake insider tips, talking about how the company is on the verge of taking off, etc. With their coordinated PR campaign, they would get people to buy the stock and pump on the price of the stock. Once it went as high as the manipulators think it can go they sell out of their positions, abandon the PR campaign, and leave all those who fell for their stunt holding the worthless stock and losing a fortune.
Here the scam artists recognized stocks that were excessively short (allowing their scheme to work) and did the same thing. They coordinated their efforts to convince people to buy the stock-raising the price, selling out (making a fortune for themselves), and then leaving all the people who bought into their hype and bought the overinflated stock holding worthless stock and losing a fortune. Sure the short-sellers got hurt but so did the vast majority of people they conned into helping them with their money-making scam. As Blue4Life said, just a sophisticated pump and dump scheme.
To circle back, I said I watch the left and the right with equal interest. I was truly impressed to find the scammers had created a narrative that played as well with those on the right as it did those on the left. That was truly an impressive feat of manipulation. They united those on the right and the left cheering as the scheme they believed stuck it to the elites or the wealthy (depending on your ideological flavor)
Quote from: MightyGiants on February 06, 2021, 01:58:41 PM
JBG,
I watch the left and the right of the political spectrum with equal interest. Before I address that point, I need to back up. It sounds like you are not really familiar with the pump and dump scheme that Blue4Life correctly noted. A pump and dump scheme was one investor or a handful of investors would buy a penny stock. They would then use social media to pump up the stock providing fake insider tips, talking about how the company is on the verge of taking off, etc. With their coordinated PR campaign, they would get people to buy the stock and pump on the price of the stock. Once it went as high as the manipulators think it can go they sell out of their positions, abandon the PR campaign, and leave all those who fell for their stunt holding the worthless stock and losing a fortune.
Here the scam artists recognized stocks that were excessively short (allowing their scheme to work) and did the same thing. They coordinated their efforts to convince people to buy the stock-raising the price, selling out (making a fortune for themselves), and then leaving all the people who bought into their hype and bought the overinflated stock holding worthless stock and losing a fortune. Sure the short-sellers got hurt but so did the vast majority of people they conned into helping them with their money-making scam. As Blue4Life said, just a sophisticated pump and dump scheme.
To circle back, I said I watch the left and the right with equal interest. I was truly impressed to find the scammers had created a narrative that played as well with those on the right as it did those on the left. That was truly an impressive feat of manipulation. They united those on the right and the left cheering as the scheme they believed stuck it to the elites or the wealthy (depending on your ideological flavor)
I am well aware of the "pump and dump" method of driving up stock. It's only been happening for decades. I just don't see any political connection whatsoever. If you look at those in high places in politics that have taken advantage of the stock market because they have "inside information" about pending bills that will pass before a vote is cast, and it would list politicians from both sides of the political aisle. Republicans Richard Burr and Kelly Loeffler dumped their stock holdings just before the Covid shutdown because of advanced knowledge of a pending shutdown that was not yet public knowledge. Burr and Loeffler received a ton of negative Press over it. Left out from the main stream media was that Democrat Diane Feinstein did the exact same thing with nary an eyebrow raised or a story to be found. Regardless, not wanting to get into a political discussion, I fully believe that greed effects the entire political spectrum and I suspect most politicians in D.C. are worse than shady used car salesmen or the cigar smoking whales in Wall Street. At the center of this Gamestop phenomena is basically nothing more than the "haves" vs the "have nots" and politics has nothing to do with it. In short, the "haves" are really, really pissed that the "have nots" played them. Boo hoo! They can sell one of their five Bentleys or one of a hundred priceless paintings used as decor in their foyer or stair case to cover their losses.
Quote from: Jolly Blue Giant on February 06, 2021, 03:05:54 PM
I am well aware of the "pump and dump" method of driving up stock. It's only been happening for decades. I just don't see any political connection whatsoever. If you look at those in high places in politics that have taken advantage of the stock market because they have "inside information" about pending bills that will pass before a vote is cast, and it would list politicians from both sides of the political aisle. Republicans Richard Burr and Kelly Loeffler dumped their stock holdings just before the Covid shutdown because of advanced knowledge of a pending shutdown that was not yet public knowledge. Burr and Loeffler received a ton of negative Press over it. Left out from the main stream media was that Democrat Diane Feinstein did the exact same thing with nary an eyebrow raised or a story to be found. Regardless, not wanting to get into a political discussion, I fully believe that greed effects the entire political spectrum and I suspect most politicians in D.C. are worse than shady used car salesmen or the cigar smoking whales in Wall Street. At the center of this Gamestop phenomena is basically nothing more than the "haves" vs the "have nots" and politics has nothing to do with it. In short, the "haves" are really, really pissed that the "have nots" played them. Boo hoo! They can sell one of their five Bentleys or one of a hundred priceless paintings used as decor in their foyer or stair case to cover their losses.
JBG,
As I said, I watch message boards of the right and the left, both sides discussed this issue heavily. Both sides were equally taken in by and cheering this pump and dump scheme (at least initially).
I have one basic premise that I follow. I'm not privy to the information that people that do this for a living have at their disposal. As a result I have an investment firm that I'm comfortable with handle it for me. I guess I'm more like Lenn then some us but I feel that there is no way that I can compete with the big guys who have too many tools that they they use.
Quote from: Shoelessjoe on February 13, 2021, 10:40:09 PM
I have one basic premise that I follow. I'm not privy to the information that people that do this for a living have at their disposal. As a result I have an investment firm that I'm comfortable with handle it for me. I guess I'm more like Lenn then some us but I feel that there is no way that I can compete with the big guys who have too many tools that they they use.
There's a lot of information at our fingertips that are the same numbers the big boys use. However, they have a lot of advantages. Where we might buy a 100 shares of stock "WXYZ", a hedge fund like BlackRock might buy 20 million shares of the same stock. Their volume alone can easily effect the stock price whereas our buys and sells is like spitting in the ocean trying to raise the tide. Also, the big boys have big media at their disposal and they release "analyses" that can make a price go up or down. A good example was in Barron's a couple of weeks ago when one of their analysts were downgrading a stock from "buy to neutral". In the comments section, one of the writers wrote, "this means they are about to buy a million shares and they want the price to go down first before pulling the trigger"....which was probably right because the stock price dropped and two days later lit up.
Regardless, no way the little guy can expect to profit from the market the way the big dogs get to profit. However, with interest rates at basically net-zero, the market is the only place to put your money and even though you might only get a 10% return compared to a mega-millionaire getting 20+%, 10% is better than the pennies you get in return for leaving your money in a bank somewhere.
If there is any lesson to be learned about playing the market, it's "never brag about your gains".
I am heavy into tech stocks. I buy rising tech stocks whenever they dip and then turn around and sell them a few days later when they recover. It has worked very well for me. I started in mid-November with an input of 10k just to see if I could squeeze out some extra money. I felt like a genius as by the middle of February - a mere 3 months playing the market - I was up 54% and felt like a genius. Then came the third week of February and some of my favorite stocks were down 10-12% so I snatched up several of them seeing it as a great opportunity. Then they went down again...hmmm. The next day, even further....hmmm. By the second week of continual going down I began to panic - I was an absolute miserable person to be around. I went through 3 weeks of hell watching my stocks go down, down, down and couldn't believe it when my initial investment was now down -6% overall. I went from +54% to -6% in 3 friggin weeks - more than half of my portfolio's value. It was no consolation when I read that Elon Musk lost 22 billion during the tech sell off and I was perplexed by the idea that since the bond market went up .01% that people would panic and decide they had to put their money in bonds with a whopping interest rate of 1.5% over 20 years.
Anyway, it was a stressful three weeks, but finally a pretty good recovery this past week. I had no choice but to sit pat with my fingers crossed and hope for the best. This past week my portfolio recovered 2.5k, and I'm up 15.4%, but all my stocks but one are still in the red and I need another couple of good weeks just to get back to where I was. If it ever gets back up to where it was, I'm going to sell them all and put it into savings and wait for the next big tech sell off before jumping back in. I think I have aged about 5 years in the last few weeks. Part of me thinks the big guys on Wall Street are getting together to see how many individual small investors they can shake out or go bankrupt as a bit of payback for the Robinhood's gang of Gamestop players that made the short selling millionaire's club get butt hurt. Just thinking out loud.
Anyone else have a near heart attack during the tech selloff?