Look, it's great that you managed to be one of the people who came out ahead in all of this.
But while you personally have seen some success so far, it's important to recognize that overall this is a transfer of wealth from people in your financial situation to the wealthy. The fact that this one situation is so incredibly newsworthy should be strong evidence of how unlikely such successes are in practice.
Further, a lot of the people holding on to $GME right now will be caught holding the bag once the selloff begins. Once the reversion happens, there won't be buyers willing to take this rapidly-pluging asset at every price point along the way. Certainly some people will get out at sky-high prices, but the overwhelming majority will be left holding a $10 asset they purchased at $400+.
> I made >40% of my network in the first 2 weeks of January alone...
Only if you've sold. And if you haven't, I do genuinely hope that you're one of those who manages to get out in time. But even if you are, it's important to realize that the eventual winners of this scenario aren't going to be the Redditors holding on to $GME shares, but the wealthy short-sellers who manage to either predict the pop or simply have enough assets to hold on long enough for it to happen.
> I have literally nothing to lose.
No, you had 4 digits of net worth to lose. And while that might not seem like "much", it's quite literally not nothing. And while you've been fortunate to win on this play, the statistics are pretty clear that plays like this keep more poor people poor than make the poor rich.
> Keeping track of my bets even before getting into this, I was right more often than not, and I am aware of survivorship bias and confirmation bias. In the limit, it makes more sense to spend 4-5 hours per day learning about market analysis, observing trends close to me and making decisions about sectors/fields that I know about.
First off, compare your plays to overall market returns, not to net-zero. Your benchmark over the past five years should be something around +90% (about 14% YoY returns). Actually, you need to be a little better due to trading expenses and (in the U.S. at least) short-term capital gains tax raets vs. long-term gains.
Second, it's astonishingly easy to be profitable when the overall market is having record returns. The trick is not losing your shirt when the market goes upside down, and everyone thinks that part is going to be much easier than it really is in practice.
In sum, I genuinely wish you luck, but I'm sadly all too aware that the statistical reality is that spending 4-5 hours per day learning about market analysis and making trades based on your findings is overwhelmingly more likely to leave you poorer than richer.
You can find people who've become rich betting it all on black at the casino, but that money didn't come from the house. It's just redistributing funds from all of the other suckers at the table, while the casino takes home the real winnings.
Thank you for your concern, I appreciate it. Yes I have an exit strategy, and with the second semester starting again, I won't really have the time to deal with this all of this. I made enough to setup a system to run experiments and fund my research for a year or two without needing to bug professors or make commitments on topics that don't really interest me.
> But even if you are, it's important to realize that the eventual winners of this scenario aren't going to be the Redditors holding on to $GME shares, but the wealthy short-sellers who manage to either predict the pop or simply have enough assets to hold on long enough for it to happen.
What the hell are you talking about? The short sellers are literally losing tens of billions of dollars, and I believe they are going to lose several times more within the next week.
The short sellers are overleveraged right now, and unless they find some bullshit way to fuck everybody (people are switching away from RobinHood in droves) then they are going to not just lose more money, but go insolvent.
I don't know what's going to happen, and rumors are Melvin is about to get a giant capital infusion, but it really seems like the short sellers are the ones that are fucked and believing otherwise is ignoring data and simply assuming nothing ever changes. The fact that they're doubling down is a sign of desperation, not strength. It's like saying Lehman Brothers can never lose money in 2008.
> What the hell are you talking about? The short sellers are literally losing tens of billions of dollars, and I believe they are going to lose several times more within the next week.
Yes, Melvin is losing their shirts.
But if you accept that the price is going to go down, and sharply at that, then somebody is going to make an absolute killing here from a short position when the price inevitably craters. And that amount will utterly dwarf the gains from WSB redditors, mostly coming at their expense.
There’s orders of magnitude more money to be made today shorting $GME at $400 than there was shorting it at $20.
> There’s orders of magnitude more money to be made today shorting $GME at $400 than there was shorting it at $20.
I have been running scenarios of this in my head over the previous days. This play would be to short while the squeeze is near closure and force the remaining shorts to purchase your stock. The problem with this play is that eventually you need to cover, albeit at much lower price, unless, of course, the bag holders i.e. remaining retail isn't willing to sell to you at a lower price, so you can never close. If anyone else attempts to short at the rebounded prices, you can close your position, but this becomes a perpetual game of hot potato. For this play to you work, you need to assume the retail will paper hand, but if WSB is any indication, WSB can, as they put it, stay retarded longer than you can stay solvent and if they don't paper hand at those prices, they won't give it to you that easy.
The alternative play, is to make a deal with other firms where you rotate who owes the shares and you share the profits from shorting the top, but I suppose that constitutes market manipulation. If we were to assume that the market moves up and the profits can be reinvested and profit more than the interest, this play makes the most sense.
These two plays assume that all the floating shares are held by WSB, and if that is true; the bag holders will be people willing to let the prices literally moon. Then the only solution would be to wait for GME to issue more shares. The most plausible case is that WSB will be the ones holding the shares when it eventually squeezes and the shorts need to cover since all others in retail would have already sold.
This isn't a particularly good position for anyone to be in because no institution will be selling and nobody will be buying, so you will end up with a staring contest between you and WSB, and if the past few days are any indication, your only bet is your profits outweigh the interest.
If you can imagine the actual play executing in a scenario where WSB doesn't hold you by the ..., please share, I am interested.
On Thursday, Citadel reported overall retail GME activity was 50.2% sellers and 49.8% buyers[1]. Assuming they aren’t lying about this, retail as a whole isn’t “diamond handing” and holding to the moon, just a few outspoken redditors who stand to gain the more others hold.
> There’s orders of magnitude more money to be made today shorting $GME at $400 than there was shorting it at $20.
There's also orders of magnitude more money to be lost, because there's just more money on the table. At the end of the day it's a bet based on assumptions. A month ago everybody that was investing in GME was told the same thing by people that wanted to short it.
The market can remain irrational longer than you can remain solvent.
> There's also orders of magnitude more money to be lost, because there's just more money on the table.
And my point is that the losing side of this is inevitably going to be the majority of people long $GME.
> The market can remain irrational longer than you can remain solvent.
Billionaires can remain solvent longer than you can remain irrational.
Again, Melvin is almost certain to lose their shirts on this. But there’s many, many more hedge funds that are sharks circling the waters. And Melvin and WSB are both going to be their prey.
> Billionaires can remain solvent longer than you can remain irrational.
Melvin Capital has a very real chance of going insolvent. Also have you heard of Lehman Brothers? Hell, just watching Cramer get upset is enough for me to realize the rich aren't happy with what's happening. It seems pretty obvious they're worried. Why else would they pay for ads claiming to have closed a position for which they supposedly no longer have an investment stake?
> And my point is that the losing side of this is inevitably going to be the majority of people long $GME.
I said the same thing about TSLA way back when. So did David Einhorn. I still believe TSLA is more than 10x overvalued, and people continue to get rich despite my "rational" obstinance.
Also you're completely missing the point. Do you not even understand most of these people aren't trying to make money? If you don't understand that, then you don't even have a basis to start the conversation.
> Hell, just watching Cramer get upset is enough for me to realize the rich aren't happy with what's happening.
The "rich" are a large group. Much larger than the few names that have been on the news recently. There have been plenty of believable reports about funds that already made crapton of money on this attempted squeeze. Now, that everyone's eyes are on $GME, many more will make fortunes riding the stock down. Believe me, they are very happy about it. That kind of predictability on the market happens rarely, and is a gift for the funds.
There's been wall-to-wall coverage of DeepF*Value and the other lucky people who are getting out early. Half the stories on here, on Reddit, in newspapers and on TV. You sound frankly delusional claiming nobody talked about them.
(Highlighting the past winners is essential for every pyramid scheme, for recruiting greater fools.)
One redditor has made (at least if he gets out now) somewhere around $50m. It’s highly likely this redditor is one of the biggest winners from the WSB crowd.
Melvin is down $5,000m.
Who do you suppose accounts for most of the remaining $4,950m in Melvin’s losses?
> Melvin Capital has a very real chance of going insolvent
I just don’t know how many more times I’m going to have to say that Melvin is going to lose everything.
Melvin and WSB are not the only two players in the market.
> Also you're completely missing the point. Do you not even understand most of these people aren't trying to make money? If you don't understand that, then you don't even have a basis to start the conversation.
That’s the meme. We’ll see how the people with tens of thousands YOLO’d feel when things turn south.
And if that’s the point, that makes this whole thing all the more depressing. They’re sticking it to the hedge funds by… blowing a bunch of money taking out one while dozens of others profit off of them?
The point I'm making is that Melvin is going under, a few Redditors will make money if they get out in time, but the eventual impact of this will be a different set of billionaires gets richer while most Redditors are going to be stuck holding the bag.
Which isn't exactly the "Reddit gets rich off of evil billionaires" narrative that's being sold. And it makes the diamond hands strategy all the more foolish when literally the only way Redditors will actually stick it to the billionaires is if they all manage to get out in time. Diamond hands as a strategy just makes WSB the eventual suckers donating their money to the funds who shorted at $400.
Again, for many people it's not about making money.
And many (most?) people are aware that billionaires will still get rich on this trade.
You keep explaining this to me as if it's something I don't already know. The part you are failing to understand is we hold fundamentally different values.
But while you personally have seen some success so far, it's important to recognize that overall this is a transfer of wealth from people in your financial situation to the wealthy. The fact that this one situation is so incredibly newsworthy should be strong evidence of how unlikely such successes are in practice.
Further, a lot of the people holding on to $GME right now will be caught holding the bag once the selloff begins. Once the reversion happens, there won't be buyers willing to take this rapidly-pluging asset at every price point along the way. Certainly some people will get out at sky-high prices, but the overwhelming majority will be left holding a $10 asset they purchased at $400+.
> I made >40% of my network in the first 2 weeks of January alone...
Only if you've sold. And if you haven't, I do genuinely hope that you're one of those who manages to get out in time. But even if you are, it's important to realize that the eventual winners of this scenario aren't going to be the Redditors holding on to $GME shares, but the wealthy short-sellers who manage to either predict the pop or simply have enough assets to hold on long enough for it to happen.
> I have literally nothing to lose.
No, you had 4 digits of net worth to lose. And while that might not seem like "much", it's quite literally not nothing. And while you've been fortunate to win on this play, the statistics are pretty clear that plays like this keep more poor people poor than make the poor rich.
> Keeping track of my bets even before getting into this, I was right more often than not, and I am aware of survivorship bias and confirmation bias. In the limit, it makes more sense to spend 4-5 hours per day learning about market analysis, observing trends close to me and making decisions about sectors/fields that I know about.
First off, compare your plays to overall market returns, not to net-zero. Your benchmark over the past five years should be something around +90% (about 14% YoY returns). Actually, you need to be a little better due to trading expenses and (in the U.S. at least) short-term capital gains tax raets vs. long-term gains.
Second, it's astonishingly easy to be profitable when the overall market is having record returns. The trick is not losing your shirt when the market goes upside down, and everyone thinks that part is going to be much easier than it really is in practice.
In sum, I genuinely wish you luck, but I'm sadly all too aware that the statistical reality is that spending 4-5 hours per day learning about market analysis and making trades based on your findings is overwhelmingly more likely to leave you poorer than richer.
You can find people who've become rich betting it all on black at the casino, but that money didn't come from the house. It's just redistributing funds from all of the other suckers at the table, while the casino takes home the real winnings.