Buying Gamestop shares

[tmtomh]

The other thing that i find very interesting is the cyclical nature of economics. It started in asia, migrated to Europe, came across the pond to the US and now, I will guess (but i have no idea) it is time once again for the power to shift back east, this time to China. If people arent prepared for this, what i think is the greatest economic challenge we face, they will be decimated. In my mind, its not a matter of if but rather when. All i can hope is i wont be around long enough to have to go through it

I definitely agree with you regarding the financialization of everything. It turns it into a casino. But rather than bitch and moan, i believe you need to accept it, and find a way to capitalize from it since you have NO control. Unfortunately its gonna happen no matter how much we protest because why> our elected officials (and those in non-political power) are moving us in that direction. I am not going to sit by and watch. I just hope i am smart enough to find a way. I am very thankful every day that i do not have any kids as i fear for where we are going.

And dont get me started on the new forms of monetary and economic theory such as MMT. What could go wrong with giving everyone a 100K a year to live on?

Okay, thanks, and now I see where the issue is. For what it's worth, I would say I certainly have a critique of financialization, mainly because in the U.S. it has entailed the wholesale destruction of family-sustaining-wage manufacturing jobs and helped create a bifurcated economy with very high-wage financial and ancillary service positions on the one hand, and a sea of low-age service industry jobs on the other hand.

But I certainly agree that it's impossible to turn back the clock or push back the tide of this kind of fundamental economic change. I suspect we might have different ideas about what should be done to deal with the increasing economic inequality within industrialized nations that has accompanied the shift to financialization in the past 40 years - and we might even disagree more fundamentally on the question of whether anything should be done. But I do agree that there's no use in simply complaining about or bemoaning the shift as if it could ever be undone.

 

[noobie1]

GME i assume?
As stated from statistical data, parabolic arcs follow the 80/50 rules.
They have a 50% chance of retracing 80% of parabolic gains or an 80% probability of retracing 50% of parabolic gains.
IF this is GME, we know which of those played out.
I love it as both sides (speculators and hedgies) got spanked.

There must be an underlying assumption that the financial instrument is not being manipulated in an "unnatural" way. Cuz it seems to me there is 100% chance that GME will retrace 100% of its parabolic gains.

 

[HemiRick]

What I don't understand about this GME thing is why everyone thinks the common man smacked it to the big boys....What kept the big boys from shorting GME @ $400+ and making 40X what they were going to make on a $10 stock?

 

[JoachimStrobel]

I Bought at $300

Anyone else buying and holding GameStop shares?

This is Elon Musk‘s private war and he won it brilliantly. Made me money for a new data projector. Borrowing somebody else’s shares for shortening companies is sick. Elon is right ( shame that he is wrong with his SNs).

 

[SimpleTheater]

because you think you can sell the in the future for a higher price or because like blockbuster, the stock certs will look cool hanging on your wall one day? LOL I have some 100000 Trillion dollar zimbabwe currency hanging on mine.

I bought one share of Marvel back in 1997 for that stock certificate. Sent it to my sister who was a huge Spiderman fan. It was worth the $20 (that includes a $10 trade fee). Not buying GME, but I understand if someone does to remember the time they gave it to the 'man'.

 

[SimpleTheater]

But I certainly agree that it's impossible to turn back the clock or push back the tide of this kind of fundamental economic change. I suspect we might have different ideas about what should be done to deal with the increasing economic inequality within industrialized nations that has accompanied the shift to financialization in the past 40 years - and we might even disagree more fundamentally on the question of whether anything should be done. But I do agree that there's no use in simply complaining about or bemoaning the shift as if it could ever be undone.

I think the solution is simple, but our politicians are weak. I have no problem at all with options, calls, shorting or hedging of any kind. My issue is the FED, the U.S. gov't comes to the rescue when these financial instruments, that at one time had a purpose but have turned into pure gambling), collapse.

By constantly bailing out these institutions a moral hazard has been created. They KNOW they will get bailed out, so just keep gambling. This is the cycle that has to be changed. The people need to speak out and say "No more". Now do the people have the will to sit back and watch a new great depression smash our economy for the decade it will probably take to get our economy back into shape. You can't create this kind of mess and expect everything to be roses the day after you say "No more". Positions will be unwound, ordinary citizens will watch their portfolios drop precipitously, but I believe that the end result will be a better economy and a far more equitable economy - all without gov't regulations (its gov't propping up the inequitable economy we currently have).

Sadly they teach our children, as I was taught, that America is a capitalist nation. Far from the truth, we haven't been true capitalist for over a century and since the 1950's we've been almost pure corporatism.

 

[muslhead]

The S&P 500 finished Tuesday sharply higher as air continues coming out of Reddit’s GME, AMC, and SLV trades.
AMC tumbled 62% in just a few days. GME is down 82% from last week’s intraday highs. And even silver took it on the chin, falling 12% from yesterday’s early levels. Easy come easy go. But everyone with even a rudimentary understanding of market mechanics knew this outcome was inevitable. It didn’t take a “Wall Street conspiracy” to kill this frenzied buying. Instead, these small millennial buyers simply ran out of cash and there was no greater fool left to buy a struggling retailer up nearly 10,000%.

The broad market is clearly relieved the old rules still apply. Every day GME rallied last week, the indexes fell. And this week, every day GME fell, the indexes rallied. This Reddit thing is quickly turning into nothing more than a flash in the pan. Rather than upend the entire market and send it into chaos, this is turning out to be little more than a novelty that is fading as quickly as it came. That said, these ripples will be felt for a while. GME already bounce 100% off of this morning’s lows. Between another wave of gullible buyers rushing in to “buy the dip” and shorts closing positions with spectacular profits, there will be a good amount of buying in these names for a while and they will continue trading at elevated levels. (Far off the silly highs, but well above where they started.)

 

[SimpleTheater]

What I don't understand about this GME thing is why everyone thinks the common man smacked it to the big boys....What kept the big boys from shorting GME @ $400+ and making 40X what they were going to make on a $10 stock?

Some big boys got badly smacked. Losses in short positions were over $70 billion. Now did other big boys begin shorting at $400 and are about to make a killing. I'm sure of it.

 

[muslhead]

What I don't understand about this GME thing is why everyone thinks the common man smacked it to the big boys....What kept the big boys from shorting GME @ $400+ and making 40X what they were going to make on a $10 stock?

its the david vs goliath story. Everyone roots for the underdog. Yes, a few hedgies got hurt but there is too much institutional money that will eventually overwhelm the redditors. Some big boys did get in at 400 and higher and they have profited from the only resulting outcome that could come out of this bit if sideshow entertainment. Its all about timing. those that got in to short early, got hurt. those that jumped on the reddit band wagon late got hurt. Unless you accept this is a zero sum game the side with the biggest pile of money usually wins ... unfortunately ... and why going against them can have a negative effect on your account balance. There will always be winners and losers with a zero sum game.

 

[SimpleTheater]

This is Elon Musk‘s private war and he won it brilliantly. Made me money for a new data projector. Borrowing somebody else’s shares for shortening companies is sick. Elon is right ( shame that he is wrong with his SNs).

I believe shorting is a good thing, as it provides liquidity into the market during panic selling. Let me preface, I'm not talking about shorting with advanced techniques - like option trading, but PURE shorting.

If everyone was long a stock, and buyers dwindled (as happens), shares drop. If this turns into a panic, people start to unload shares, but there are no buyers because everyone fears the worst is yet to come. The short sellers have made a nice profit and will wonder if that massive drop will continue into the future. When they begin to close their short positions they become buyers and create a floor for the stock.

Shorting, in its pure form, is a good thing for the financial markets. GME was a wholly different beast, with over 100% of the available trading shares being shorted. Anyone with a short position in GME was greedy and loaded with hubris.

 

[muslhead]

Okay, thanks, and now I see where the issue is. For what it's worth, I would say I certainly have a critique of financialization, mainly because in the U.S. it has entailed the wholesale destruction of family-sustaining-wage manufacturing jobs and helped create a bifurcated economy with very high-wage financial and ancillary service positions on the one hand, and a sea of low-age service industry jobs on the other hand.

But I certainly agree that it's impossible to turn back the clock or push back the tide of this kind of fundamental economic change. I suspect we might have different ideas about what should be done to deal with the increasing economic inequality within industrialized nations that has accompanied the shift to financialization in the past 40 years - and we might even disagree more fundamentally on the question of whether anything should be done. But I do agree that there's no use in simply complaining about or bemoaning the shift as if it could ever be undone.

Likely we would have a difference on what should be done. I have none.
That is way too far above my pay grade so I dont waste my time trying to solve it. Even if i did have a solution (which i can think of many), no one would listen anyway, I subscribe to spending my time addressing the things i can control and work as best I can within the structure of what i am given. In this case, i my job is to extract money from the market to increase my wealth. in a zero sum game that means someone loses and based upon many on this board it makes me a terrible individual

 

[muslhead]

I believe shorting is a good thing, as it provides liquidity into the market during panic selling. Let me preface, I'm not talking about shorting with advanced techniques - like option trading, but PURE shorting.

If everyone was long a stock, and buyers dwindled (as happens), shares drop. If this turns into a panic, people start to unload shares, but there are no buyers because everyone fears the worst is yet to come. The short sellers have made a nice profit and will wonder if that massive drop will continue into the future. When they begin to close their short positions they become buyers and create a floor for the stock.

Shorting, in its pure form, is a good thing for the financial markets. GME was a wholly different beast, with over 100% of the available trading shares being shorted. Anyone with a short position in GME was greedy and loaded with hubris.

i so agree with you.
I caution you though. Expect death threats and insults to fill your pm box

 

[muslhead]

I think the solution is simple, but our politicians are weak. I have no problem at all with options, calls, shorting or hedging of any kind. My issue is the FED, the U.S. gov't comes to the rescue when these financial instruments, that at one time had a purpose but have turned into pure gambling), collapse.

By constantly bailing out these institutions a moral hazard has been created. They KNOW they will get bailed out, so just keep gambling. This is the cycle that has to be changed. The people need to speak out and say "No more". Now do the people have the will to sit back and watch a new great depression smash our economy for the decade it will probably take to get our economy back into shape. You can't create this kind of mess and expect everything to be roses the day after you say "No more". Positions will be unwound, ordinary citizens will watch their portfolios drop precipitously, but I believe that the end result will be a better economy and a far more equitable economy - all without gov't regulations (its gov't propping up the inequitable economy we currently have).

Sadly they teach our children, as I was taught, that America is a capitalist nation. Far from the truth, we haven't been true capitalist for over a century and since the 1950's we've been almost pure corporatism.

so true, so true and this is exactly why the movement of financial capital of the world to Asia and eventual decline of the dollar is inevitable. That being said, what are you doing to protect yourself for this eventuality. Since we cant change its course, we can try and protect ourselves, no?

 

[tmtomh]

I think the solution is simple, but our politicians are weak. I have no problem at all with options, calls, shorting or hedging of any kind. My issue is the FED, the U.S. gov't comes to the rescue when these financial instruments, that at one time had a purpose but have turned into pure gambling), collapse.

By constantly bailing out these institutions a moral hazard has been created. They KNOW they will get bailed out, so just keep gambling. This is the cycle that has to be changed. The people need to speak out and say "No more". Now do the people have the will to sit back and watch a new great depression smash our economy for the decade it will probably take to get our economy back into shape. You can't create this kind of mess and expect everything to be roses the day after you say "No more". Positions will be unwound, ordinary citizens will watch their portfolios drop precipitously, but I believe that the end result will be a better economy and a far more equitable economy - all without gov't regulations (its gov't propping up the inequitable economy we currently have).

Sadly they teach our children, as I was taught, that America is a capitalist nation. Far from the truth, we haven't been true capitalist for over a century and since the 1950's we've been almost pure corporatism.

Agreed.

 

[muslhead]

There must be an underlying assumption that the financial instrument is not being manipulated in an "unnatural" way. Cuz it seems to me there is 100% chance that GME will retrace 100% of its parabolic gains.

Uhhhm, please explain what manipulated in an unnatural way means?
Market makers "manipulate" the shares of every stock every day. That is there job. I dont understand your question or point.
Manipulation is the default conspiracy reason blamed for those that are ignorant of what and how markets operate. All markets are manipulated. If you dont like it, take your toys and go home. its your choice. If you decide to play, realize your odds of winning are as small as some of the class d amp distortion measurements you see here on ASR. Just assume you are going to donate to the cause.

Regardless parabolic rises occur because of the greater fool theory and the dumb money piles in or someone tries to corner the market (ie hunt brothers and the silver market). This is why the result is 100% guaranteed to end badlly. The only one who has enough money to fight the markets and win is the government as they can print money at will ... and they do.
No one complains about interest rates which have been in a bear market for more than 3 decades. Why? Because the market is not free it is controlled by our goverment and the FED, They manipulate the the dollar as do all central banks around the world
Retracing 100% of the parabolic rise usually does not occur unless the investment vehicle has no intrinsic value. In this case, i think you will likely be right eventually. GME is toast unless their mgt can find a way to change their business model or they get sold.

 

[andreasmaaan]

Please go back to school and study the english language. Additionally you have no clue as you continue to prove, you know nothing of my purported positions. We are in fact in violent agreement except for my point about the politicians holding a portion, if not the majority, of the blame for continuing to allow this to happen.

We're not in disagreement about this. Politicians must also shoulder a large share of the responsibility. Moreover, (drastically) increased regulation is the best hope of a solution to the present problem, since it is highly unlikely that individuals who stand to benefit from the system will refrain from doing so in high enough numbers to make an appreciable difference.

So yes, politicians are best placed to act to address the problem, even if they are not solely to blame for it in the first place.

based upon many on this board it makes me a terrible individual

To me, there is a huge difference between being deserving of blame for something and being a "terrible" individual.

It's not all or nothing. Those exploiting a degenerate system out of self-interest are not necessarily terrible people, but they surely are partly to blame.

 

[SimpleTheater]

That being said, what are you doing to protect yourself for this eventuality. Since we cant change its course, we can try and protect ourselves, no?

I'm not expecting the gov't to stop bailing out institutions, so I'm protecting myself against a weaker dollar. My retirement portfolio is 25% invested in European equities (via ETFs), 25% in Asian equities and 5% in inflation adjusted bonds. Only 45% is in the US stock market - and those are mostly defensive plays (food, energy and a few big tech [MSFT, GOOG], and most recently some semi-conductor manufacturers).

No gold or silver for me, just because I would want the physical product, but using the physical metal is difficult in our society.

But I do have a "fun" account, where I dabble in short-term trades.

 

[andreasmaaan]

For the economists, political philosophers, or related experts out there: In terms of capitalist theory, what is the justification for limited liability?

It seems to me that limited liability is the essence of capitalism's catastrophic instability, both present and past, and I can't think of a single good reason for it to exist.

Edward William Cox critiqued in the following terms:

[T]hat he who acts through an agent should be responsible for his agent's acts, and that he who shares the profits of an enterprise ought also to be subject to its losses; that there is a moral obligation, which it is the duty of the laws of a civilised nation to enforce, to pay debts, perform contracts and make reparation for wrongs. Limited liability is founded on the opposite principle and permits a man to avail himself of acts if advantageous to him, and not to be responsible for them if they should be disadvantageous; to speculate for profits without being liable for losses; to make contracts, incur debts, and commit wrongs, the law depriving the creditor, the contractor, and the injured of a remedy against the property or person of the wrongdoer, beyond the limit, however small, at which it may please him to determine his own liability.

Would anyone be able to give a reasoned response to his critique that justifies limited liability in terms of first principles?

(Sorry for the OT.)

 

[pozz]

For the economists, political philosophers, or related experts out there: In terms of capitalist theory, what is the justification for limited liability?

It seems to me that limited liability is the essence of capitalism's catastrophic instability, both present and past, and I can't think of a single good reason for it to exist.

Edward William Cox critiqued in the following terms:


Would anyone be able to give a reasoned response to his critique that justifies limited liability in terms of first principles?

(Sorry for the OT.)

I can give you an industry answer.

Limited liability is based on group ventures. It mirrors the limited individual responsibilities and limited individual gains.

There is however the principle, and then its application. The application is based on what participants will agree to. So you can have some extremely unfair distributions of liability vs. responsibility vs. gains.

Ultimately every financial transaction is the equivalent of a promisory note or contract. The validity of those promises depends on the legal force, which can itself be manipulated or influenced. Kind of like whether or not you get picked for tribunal by an agent of the law (police), and whether or not you have the resources to defend yourself (education, money).

 

[tmtomh]

For the economists, political philosophers, or related experts out there: In terms of capitalist theory, what is the justification for limited liability?

It seems to me that limited liability is the essence of capitalism's catastrophic instability, both present and past, and I can't think of a single good reason for it to exist.

Edward William Cox critiqued in the following terms:


Would anyone be able to give a reasoned response to his critique that justifies limited liability in terms of first principles?

(Sorry for the OT.)

I can't give a reasoned response to that critique in terms of first principles, largely because I agree with the critique.

In terms of how limited liability has been justified overall, though, I would say that it's fundamentally part of the historical development of industrial capitalism, and more specifically the advent of the modern, publicly held corporation. (EDIT: @pozz posted a similar comment as I was typing this) The justification would be that the corporation is an entity separate from the individuals who own stakes in it and from the individuals who run it, and that the massive growth and increase of overall wealth and living standards associated with corporate industrialism would be impossible or at least infeasible without limited liability.