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Old 30th January 2021, 11:29 AM   #361
theprestige
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Originally Posted by timhau View Post
Are put options immoral too?
I'm still wrapping my head around the idea that making a case for investing in GME is immoral if someone happens to believe the case is unfounded.
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Old 30th January 2021, 11:31 AM   #362
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Originally Posted by timhau View Post
It does have some use in stopping death spiral financing. Companies that rely on issuing stock for survival don't deserve to live.
Funny you mention death spiral financing.

I followed a company for years after it was caught fudging finances circa 2001. Happened just before the general market meltdown with lots of company shenanigans coming to light. The stock price declined from hundreds/sh to under $5 over about 2 years. During that time they issued convertible debt in the form of death spiral financing. I often posted on yahoo's chats regarding some of the oddities I observed in their SEC filings and my posts were generally negative.

But I never shorted the company. I followed it because I understood their industry and knew how to read SEC filings and was familiar with the associated laws (I had been a statutory insider in all three SEC categories in another company: director, 10% holder, and officer). It was just fun to read the filings and visualize the crap the company was going through as a result of their own stupid moves.

But then something interesting happened. The founder/CEO got his act together and the business got serious. After months of flailing, it refocused and and even prospering a bit. In spite of this it's stock kept declining. You could draw a downward line through the price for almost 2 years straight. Then the toxic financing was converted and the price stayed pretty stable around the $5 mark. But it didn't go up while the company plodded along getting more business and executing reasonably well. I started thinking about buying.

Then I saw something I'd never seen anywhere else. The company had been forced to add a few directors by an SEC settlement. Often referred to as "adult supervision." When the period the SEC required ended, they were to be expelled and replaced by new directors. Those directors, prior to leaving, exercised all their stock options which are commonly granted to serving directors. The unusual part was not that but was the fact they exercised but did not sell the stock even though they would be leaving the company and were disliked by the CEO.

All this was public data in the SEC filings but no one noticed. I bought over 6 figures worth. 3 Months later with the new board in place the company was posting extremely strong results and I closed my long. I profited another 6 figures.

I posted I was going long earlier in that day prior to buying.
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Old 30th January 2021, 11:41 AM   #363
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Originally Posted by trustbutverify View Post
Is this "former broker or something" claiming he's turned 58k into 40 mil in 16 months of churning otm gamestop calls? Because I would be highly skeptical of such a claim. Particularly when essentially all of its growth has occurred in one month... when the run on those calls would have been insane. That sounds mighty fishy.

Heís got the receipts. Ainít nothing fishy at all. Here is but one of the mainstream media stories about him since his identity was revealed.

https://www.nytimes.com/2021/01/29/t...p-markets.html
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Old 30th January 2021, 12:20 PM   #364
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Originally Posted by xjx388 View Post
Heís got the receipts. Ainít nothing fishy at all. Here is but one of the mainstream media stories about him since his identity was revealed.

https://www.nytimes.com/2021/01/29/t...p-markets.html
I can't get past the NYT paywall. Other articles I looked at said the facts of this performance can't be verified, only that he posted a screenshot that seemed to indicate it. This article suggests he invested about 750k in the company:
Quote:
Daily Mail reported that Gill posted a screenshot showing he had turned a $745,991 investment into a more than $47 million windfall. The Reddit userís page contains references to, and photos of, YouTuber Roaring Kitty.
Can you quote the NYT article confirming his total investment and current value?
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Old 30th January 2021, 12:34 PM   #365
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Originally Posted by timhau View Post
Yea, that's not the problem. The problem is total lack of disclosure. That would get a Wall Streeter in trouble, BTW.
Except there's no contractual relationship between any of the investors. If whoever started the pump had reason to believe their targeting on reddit would result in a massive wave of buying, and that person loaded up on a highly leveraged position prior to starting that wave, maybe a case could be made for illegality.
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Old 30th January 2021, 12:47 PM   #366
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One of the UK's biggest financial trading platforms, IG, has stopped any new trades in GameStop and theatre chain AMC when markets open on Monday.

US video games retailer GameStop is the focus of a trading war between amateurs and Wall Street pros.

Both GameStop and AMC Entertainment have seen their share prices boom as amateur investors, fuelled by chat on social media, bought their shares.

In a statement IG said the restrictions will be reviewed regularly.

https://www.bbc.co.uk/news/business-55871381
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Old 30th January 2021, 01:26 PM   #367
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Originally Posted by trustbutverify View Post
I can't get past the NYT paywall. Other articles I looked at said the facts of this performance can't be verified, only that he posted a screenshot that seemed to indicate it. This article suggests he invested about 750k in the company:


Can you quote the NYT article confirming his total investment and current value?

Over a year and a half, through losses and gains, sure. He has already cashed in about $13mil this week. If you search his user name on Reddit, you will find all the screenshots and trades over that time.

Now, could he fake those? Maybe, canít rule it out. The NYT couldnít independently verify his holdings either. But if his Reddit posts and YouTube channel videos are lies, then heís going to be in a heap of trouble. But isnít hiding and he has given interviews to many outlets at this point. Seems pretty legit to me.
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Old 30th January 2021, 01:35 PM   #368
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Originally Posted by trustbutverify View Post
Except there's no contractual relationship between any of the investors.
That's neither here nor there. Even bloggers writing about specific companies on Seeking Alpha are required to disclose if they're long or short on the stock.
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Old 30th January 2021, 01:46 PM   #369
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One kind of amusing and oddball bit is that Gamestop is included in a couple of indexes, and therefore index fund managers have to have it in their portfolio. Sounds great because they have enjoyed the runup, but now they have to hang on for the wild ride back down, because they still have to keep the stock.
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Old 30th January 2021, 02:27 PM   #370
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Originally Posted by timhau View Post
That's neither here nor there. Even bloggers writing about specific companies on Seeking Alpha are required to disclose if they're long or short on the stock.
Required by who?
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Old 30th January 2021, 05:57 PM   #371
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Originally Posted by Modified View Post
Sufficient resources maybe, but probably not sufficient resolve.
I dunno, diamond hands seems to be sticking for now.
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Old 30th January 2021, 06:01 PM   #372
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Originally Posted by carlvs View Post
This is one of the most disturbing things about this situation.

I bet you that NONE of the people who were buying Gamestop stocks, or praising this effort to "get back" at Wall Street, actually did any research into the company itself. The fact is that this company deserved to be in the state it was before this stock "pump" occurred.
:
I think it was undervalued, in part due to the short shenanigans.
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Old 30th January 2021, 06:11 PM   #373
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Originally Posted by p0lka View Post
I dunno, diamond hands seems to be sticking for now.

Yes, I'm a bit surprised.

What I had in mind though was not driving up the stock price by a factor of 20, but by a factor of 20,000. What happens if you're short, unhedged, nobody will sell, and the company can not or will not issue more stock?
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Old 30th January 2021, 06:43 PM   #374
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Originally Posted by Brainster View Post
One kind of amusing and oddball bit is that Gamestop is included in a couple of indexes, and therefore index fund managers have to have it in their portfolio. Sounds great because they have enjoyed the runup, but now they have to hang on for the wild ride back down, because they still have to keep the stock.
For index funds, it's only a tiny fraction of their portfolio though.
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Old 30th January 2021, 06:45 PM   #375
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Originally Posted by theprestige View Post
Required by who?
It's an editorial policy:

https://seekingalpha.com/page/editorial_principles

Quote:
Authors are required to disclose personal positions in stocks they write about.
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Old 30th January 2021, 07:39 PM   #376
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Originally Posted by timhau View Post
That's neither here nor there. Even bloggers writing about specific companies on Seeking Alpha are required to disclose if they're long or short on the stock.
Are all reddit comment posters required by law to disclose their holdings when giving their opinions on stocks? I haven't been following that subreddit- was there a poster who would be legally required to disclose, and didn't?
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Old 30th January 2021, 09:09 PM   #377
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Originally Posted by trustbutverify View Post
Are all reddit comment posters required by law to disclose their holdings when giving their opinions on stocks? I haven't been following that subreddit- was there a poster who would be legally required to disclose, and didn't?
I don't think there's a legal requirement as such (as far as I am aware). It may be more of a precaution that most people follow to protect themselves from possible legal problems or civil liability. (IANAL)
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Old 30th January 2021, 11:55 PM   #378
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Originally Posted by Modified View Post
Yes, I'm a bit surprised.

What I had in mind though was not driving up the stock price by a factor of 20, but by a factor of 20,000. What happens if you're short, unhedged, nobody will sell, and the company can not or will not issue more stock?

Thereís a price at which someone will sell. Not every GME holder is a WSB YOLO retail investor. The unanswered question is exactly how many shares are controlled by WSB diamond hand holders. There might be a large number of shareholders who lucked into this situation and donít quite have the diamond hands.

I have no idea whatís going to happen, but itís a hell of an interesting story. In any case, the shorts canít hold out forever and they will be looking to end this, somehow, and soon. Iíd say, in my financial unsophistication, massive losses have already happened and the shorts will start buying soon to mitigate further losses, either because they give up or they are forced to by their brokers, bankers and other stakeholders who underwrite them. I seriously doubt the price will reach the ridiculous numbers talked about on WSB; $69,420 seems a tad far-fetched. If I had to bet, Iíd say a good chunk of the YOLO folks will decide to start selling when the price hits the $500 range, memes or not. A lot of them will take a bath.

My wife and I have a limit sell order at $500. My son has cast his lot with the YOLO Bring Down the Billionaires crowd and claims his hands are equivalent to crystalline carbon forged in heat and unbearable pressure. Hopefully, heíll throw us a bone if heís right. Iíll be happy with about a 5X return on what was basically gambling money.
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Old 31st January 2021, 04:38 AM   #379
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Originally Posted by timhau View Post
That's neither here nor there. Even bloggers writing about specific companies on Seeking Alpha are required to disclose if they're long or short on the stock.
Originally Posted by theprestige View Post
Required by who?
By Seeking Alpha, because they want to avoid trouble with the SEC (and civil suits, I guess).

When transparency is trivially easy (the three magic words are "I'm long/short XYZ"), but you don't get it even though there's a huge potential for abuse, I can't help but wonder why.
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Old 31st January 2021, 09:59 AM   #380
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Originally Posted by xjx388
I’d say, in my financial unsophistication, massive losses have already happened and the shorts will start buying soon to mitigate further losses, either because they give up or they are forced to by their brokers, bankers and other stakeholders who underwrite them.
I'm confused, weren't they targeting Melvin Capital in particular and didn't MC already close out it's position?

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Old 31st January 2021, 10:57 AM   #381
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Originally Posted by timhau View Post
By Seeking Alpha, because they want to avoid trouble with the SEC (and civil suits, I guess).

When transparency is trivially easy (the three magic words are "I'm long/short XYZ"), but you don't get it even though there's a huge potential for abuse, I can't help but wonder why.
I get that transparency is good. I don't get that it's universally required by law for everyone who talks about a stock.

Seeking Alpha requires it of people who publish opinions about stock on their platform, because they want to reap the benefits of transparency.

But such transparency is not an innate requirement of talking about stocks. People on Reddit, for example, don't have to say anything about their own position, in order to discuss a stock or advocate a position.
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Old 31st January 2021, 12:55 PM   #382
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Originally Posted by theprestige View Post
I get that transparency is good. I don't get that it's universally required by law for everyone who talks about a stock.

Seeking Alpha requires it of people who publish opinions about stock on their platform, because they want to reap the benefits of transparency.

But such transparency is not an innate requirement of talking about stocks. People on Reddit, for example, don't have to say anything about their own position, in order to discuss a stock or advocate a position.
Announcing your positions on a stock is the new declaring your pronouns! (He/Him/VFIAX)
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Old 31st January 2021, 01:43 PM   #383
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Originally Posted by xjx388 View Post
Thereís a price at which someone will sell. Not every GME holder is a WSB YOLO retail investor. The unanswered question is exactly how many shares are controlled by WSB diamond hand holders. There might be a large number of shareholders who lucked into this situation and donít quite have the diamond hands.
That was my original point. If it was just one or a few large holders, they might be able to drive the price up to insane levels. I wouldn't expect that to be possible with a large group of small holders, though I hear the short interest is barely down, and still over 100% of the float, so it could go a lot higher.
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Old 31st January 2021, 02:03 PM   #384
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Originally Posted by RecoveringYuppy View Post
I'm confused, weren't they targeting Melvin Capital in particular and didn't MC already close out it's position?
No they weren't, and no they haven't.

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Old 31st January 2021, 08:48 PM   #385
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Apparently silver is the new Gamestop? Glad I didn't try to guess what would be next, I'd have never guessed silver.
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Old 31st January 2021, 11:30 PM   #386
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Originally Posted by TragicMonkey View Post
Apparently silver is the new Gamestop? Glad I didn't try to guess what would be next, I'd have never guessed silver.
https://www.cnbc.com/2021/02/01/gold...ts-silver.html

Quote:
Silver has risen nearly 15% since Thursday, when posts began circulating on Reddit urging retail investors to buy silver mining stocks and iShares Silver Trust, an exchange traded fund (ETF) backed by physical silver bars, in a GameStop-style squeeze.
It may be a good short-term investment at the moment if you want to make a quick profit, but who knows how long this fad will last. I see it not as a bet on the fundamental value of silver, but on the ability of this subreddit to move markets.
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Old 1st February 2021, 07:00 AM   #387
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Upon closer inspection, the hype for silver does not appear to be coming from WSB on Reddit.

https://www.reddit.com/r/wallstreetb...romote_silver/

https://www.reddit.com/r/wallstreetbets/
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Old 1st February 2021, 03:26 PM   #388
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GME lost 100 points today, $325 → $225. Guess there's some profit taking.

An NPR podcast interviewed one of the Redditors involved who says that he put his whole down payment for his house that he had been saving up plus cashed out his IRA and put it all on GameStop. He eventually sold his position (I think on Friday morning last week) for almost $4 million.

Can't Stop GameStop (Planet Money episode)

This is where I first heard this:

YouTube Video This video is not hosted by the ISF. The ISF can not be held responsible for the suitability or legality of this material. By clicking the link below you agree to view content from an external website.
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Old 1st February 2021, 05:05 PM   #389
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At least with silver you got something of permanent value; with Gamestop you don't.
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Old 1st February 2021, 05:14 PM   #390
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Originally Posted by dudalb View Post
At least with silver you got something of permanent value; with Gamestop you don't.
Meh. I'm not a big fan of that argument.

If you buy shares in a silver mining company or a silver ETF, you don't actually get physical silver. You can buy physical silver if you really want to, of course, but then you'll either have to pay for it to be shipped to your house or go to a dealer and pay a premium for it, or something. If you are only buying it as an investment, that really doesn't make sense because you are increasing your cost. Likewise, when you want to sell actual physical silver, you have the same problems. A dealer isn't going to pay the same at which he sells it, because he's a for-profit business.
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Old 1st February 2021, 06:00 PM   #391
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Perhaps I can convince my brother-in-law to melt down the approximate ton of his family silver that's cluttering up their dining room now. It's all old as hell, he's very proud of it and polishes it frequently. I don't see the point in owning objects whose only function is to sit upon a piece of furniture whose only function is to provide a place for those objects to sit on! It's a recursion of infinite pointlessness! And being silver it doesn't just clutter up space but also makes work for them as it requires dusting and polishing!!
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Old 1st February 2021, 06:12 PM   #392
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Originally Posted by TragicMonkey View Post
Perhaps I can convince my brother-in-law to melt down the approximate ton of his family silver that's cluttering up their dining room now. It's all old as hell, he's very proud of it and polishes it frequently. I don't see the point in owning objects whose only function is to sit upon a piece of furniture whose only function is to provide a place for those objects to sit on! It's a recursion of infinite pointlessness! And being silver it doesn't just clutter up space but also makes work for them as it requires dusting and polishing!!
It might be worth more than its "melt value". Don't give him bad advice.
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Old 2nd February 2021, 04:39 PM   #393
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Wow, the activity level on this thread seems to have come to a sudden halt, for some reason.
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Old 2nd February 2021, 08:33 PM   #394
Gord_in_Toronto
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Originally Posted by trustbutverify View Post
Wow, the activity level on this thread seems to have come to a sudden halt, for some reason.
Don't know about others but I cashed in at the peak. I've taken my Trillion and invested in Bitcoin. I'll only be posting here again when I own the planet.
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Old 2nd February 2021, 08:37 PM   #395
TragicMonkey
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Originally Posted by Gord_in_Toronto View Post
Don't know about others but I cashed in at the peak. I've taken my Trillion and invested in Bitcoin. I'll only be posting here again when I own the planet.
Bitcoin?! Oh, ****** I made eleventy billion on Gamestop, but I converted it all to Buttcoin! I'm ruined! Buttcoin stinks! I might as well have just dropped my money into a hole.
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Old 2nd February 2021, 08:45 PM   #396
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GME fell from $225 yesterday to $90 today. It probably has another $70 or so to go.
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Old 3rd February 2021, 04:30 AM   #397
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The Reddit folks should try to shoot Pfizer to the moon. Take $500 as the first target (it's $35 now).

Go ahead and do it. I've been holding on to mine for over 10 years now, so I get a small tax break when I sell.
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Old 3rd February 2021, 07:22 AM   #398
Mader Levap
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Originally Posted by trustbutverify View Post
Wow, the activity level on this thread seems to have come to a sudden halt, for some reason.
I dunno what's your point? No one here claimed it will be up forever.
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Old 3rd February 2021, 08:01 AM   #399
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As the price of GME collapses, I assume back to it's normal pre-meme value, we're going to see stories of people who jumped on the get rich quick scheme and lost their shirts. That is, we'll see some of the stories. People generally aren't as likely to brag about getting cleaned out as they are to brag about a windfall.

It should be pretty clear that the way this was presented, the normal people vs the hedge funds, was a gross distortion. This was a David vs Goliath tale, it's the stock market. It remains everybody vs everybody melee, and for every person making a quick buck there's somebody taking a loss.

People do make money on get rich quick schemes, but it's impossible for everyone to make money this way. There was no value created here, just a transfer of wealth from one set of people to another.

TLDR: Bitconnect still a great deal!
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Old 3rd February 2021, 08:12 AM   #400
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Originally Posted by SuburbanTurkey View Post
It should be pretty clear that the way this was presented, the normal people vs the hedge funds, was a gross distortion. This was a David vs Goliath tale, it's the stock market. It remains everybody vs everybody melee, and for every person making a quick buck there's somebody taking a loss.
And Goliath almost always comes out pretty good in those things. When the dust gets settled, a few rich people will be a little bit poorer, and some more rich people will be a little bit richer, and very, very, small number of people who used to be relatively poor or middle class will be rich, and a very large number of people who were middle class with significant savings will no longer have significant savings. Because there were option trades involved, which can result in losses significantly greater than the amount of money invested, some people will be literally bankrupted.

Generally, while there will be lots of exceptions in this case, the rich will have gotten richer, and the poor will be poorer.

One minor quibble. For the stock market in general, it is not a zero sum game. Someone making a gain does not have to be paired with someone taking a loss. However, that's over the long term, and it also doesn't apply to derivatives, which played a big role in last weeks shenanigans.
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