Stock Market & Retirement Planning

[Crapgame]

I would like to understand how publicly available message board postings differ from a hedge fund manager trash talking a stock on CNBC, other than one is connected and one is not?

very fair question. I detest the ability of HF magnates that go on and trash or pump ideas. If disclosure is accurate, makes it hard to fault

Here’s a good piece

Good luck proving Reddit traders did anything illegal by pumping GameStop

When it comes to GameStop, not everything is as it appears.

www.google.com

Joshua White, assistant professor of finance at Vanderbilt University who has authored market analysis for the Securities and Exchange Commission, said the situation resembles a “classic pump-and-dump scheme” that you would find in the penny stock market. A key difference is that penny stocks aren’t inflated by derivatives like call options. Retail investors have poured into options, which give them a cheap way to bet on rising stock prices. As a hedge, institutions that sell options typically purchase the stock that’s linked to the option, which provides another source of demand that pushes prices higher.

 

[BigDill]

GameStop Stock Game Got Stomped

Retail flows, clearinghouse margin, short sellers, lawsuits, Roaring Kitty and Nottingham.

www.bloomberg.com

Anyway why did Robinhood (and other retail brokers) shut down purchases of GameStop (and other meme stocks)? Here is a good explanation from Bloomberg News:


And here is the Wall Street Journal:


Robinhood drew down “at least several hundred million dollars” from its bank credit lines and “said on Thursday that it was raising an infusion of more than $1 billion from its existing investors.” The volatility of those stocks is approaching infinity as their trading volume increases, so the traditionally mild and technical credit risk around settling trades has become real and scary. Brokerages have to put up more money to guarantee against that risk, and also think about ways to prevent the risk from coming true. “Stop buying super volatile stocks” is one obvious way. It has become expensive and risky to be a broker for the meme stocks, so some of them tried to stop

I understand the mechanics, but I also watched the CNBC interview when Vlad said there was no liquidity issue for RH that lead to the decision, which was an overt lie. If what you said is true, then RH has a liquidity issue. Also, RH could have reached out to the powers that he and requested that trading be halted. Instead, they decided to create a relief valve for themselves and hedge funds buy applying downward price pressure with a sell only option. Now they are Doug the same thing a second time, effectively.

But here was another option for RH: stop accepting mew accounts. They didn’t seem to have an issue accepting all of these new trader accounts to buy GME and others when it was beginning to get popular. Vlad was bragging about adding millions of users. And then they didn’t stop. And more so, they kept pumping their margin program, exacerbating the issue. So maybe RH should have been more cautions with its own risk, instead of worrying about mine.

 

[Canadan]

this whole thing has been so spectacularly entertaining to follow. Wowsa.

 

[Crapgame]

I understand the mechanics, but I also watched the CNBC interview when Vlad said there was no liquidity issue for RH that lead to the decision, which was an overt lie. If what you said is true, then RH has a liquidity issue. Also, RH could have reached out to the powers that he and requested that trading be halted. Instead, they decided to create a relief valve for themselves and hedge funds buy applying downward price pressure with a sell only option. Now they are Doug the same thing a second time, effectively.

But here was another option for RH: stop accepting mew accounts. They didn’t seem to have an issue accepting all of these new trader accounts to buy GME and others when it was beginning to get popular. Vlad was bragging about adding millions of users. And then they didn’t stop. And more so, they kept pumping their margin program, exacerbating the issue. So maybe RH should have been more cautions with its own risk, instead of worrying about mine.

this is what you get when you choose to use a crap platform that’s only focused on growing the number of users and raising a new round of equity.

I was very unimpressed with Vlad. That being said, several other brokers halted GME on Wednesday and Thursday, likely for similar reasons.

 

[tequila4kapp]

Were most of the little guy investors buying just for the purpose of screwing the institutional investors who held short positions?

 

[Mikekim27]

401k no brainer. Roth IRA if eligible no brainer. if you don’t qualify for Roth, def do a backdoor Roth. beyond that, i think managing on your own makes the most sense. if you’re nervous, just go S & P, etfs, etc. managed funds are too expensive and don’t beat the market. my 2 cents.

 

[Qwkz51]

Were most of the little guy investors buying just for the purpose of screwing the institutional investors who held short positions?

Most of the big guys were. Most of the small guys were "doing their part" but also trying to make a buck. The ones that are entrenched and holding their sales are intentionally screwing with the hedge fund guys.

 

[Crapgame]

Were most of the little guy investors buying just for the purpose of screwing the institutional investors who held short positions?

that was more of a convenient byproduct with the intention to make money

 

[tequila4kapp]

that was more of a convenient byproduct with the intention to make money

Fair enough. If this is the case then I’m on board with the outrage over RH’s actions. But I also see people who were manipulating the system, not betting on a stock for its own merits, colluding with others with the understanding that it was manipulating prices...and they got their hands slapped. I don’t have much sympathy for these people. You play with fire, sometimes you get burned.

 

[BigDill]

Fair enough. If this is the case then I’m on board with the outrage over RH’s actions. But I also see people who were manipulating the system, not betting on a stock for its own merits, colluding with others with the understanding that it was manipulating prices...and they got their hands slapped. I don’t have much sympathy for these people. You play with fire, sometimes you get burned.

I am honestly not sure if you are talking about the retail buyers, or the hedge fund shorters. To be clear, I’m not trying to be clever with that comment.

 

[BuckNasty]

But I also see people who were manipulating the system, not betting on a stock for its own merits, colluding with others with the understanding that it was manipulating prices

This right here perfectly describes HFT firms and they have gotten away with it for years under the guise of “providing liquidity to the market”

 

[Crapgame]

Fair enough. If this is the case then I’m on board with the outrage over RH’s actions. But I also see people who were manipulating the system, not betting on a stock for its own merits, colluding with others with the understanding that it was manipulating prices...and they got their hands slapped. I don’t have much sympathy for these people. You play with fire, sometimes you get burned.

I'm near a similar, though evolving, conclusion. I have zero concern for HFs losing money - though it isn't good for LPs, many of which are investing vehicles of society (e.g., pension funds for teachers or first responders, endowments for universities, etc.).

I think it's quite evident that retail investors don't realize that when the short squeeze ends, there's nobody that is going to be buying GME at $100, let alone $400/share.

 

[Crapgame]

This right here perfectly describes HFT firms and they have gotten away with it for years under the guise of “providing liquidity to the market”

If there isn't proven collusion, is there a legal/regulatory way to stop the behavior? Meaning, if a bunch of HFTs are coded similarly and drive up or down asset prices based on news or technicals, I assume intent (which is clear in the WSB actions) would have to be proven in a court setting?

(Not an attorney, so I'm genuinely trying to nitpick at small distinctions).

 

[Gyro25]

Since RH was a mess (i was never on it, but now just dislike the company.. still have my tdameritrade), I signed up on Webull. They're little sigb on bonus of 2 free stocks is like a small trip to a casino to see what you get lol

Not to spam it but if anyone wants to check it out: Start your investment journey With 2 free stocks. Open an account and get a free stock! Deposit and get another free stock! https://act.webull.com/in/tJF9alwUEeTp/mzk/inviteUs/

On TDA I Bought into sme cannabis companies with the looks there will be more legalization eventually. The one I got was cheaper trading at just 1.20, so more potential gain there .. AAPL is finally rebounding after last week, and rest or my stocks are generally good thankfully

 

[Reframmellator]

Since RH was a mess (i was never on it, but now just dislike the company.. still have my tdameritrade), I signed up on Webull. They're little sigb on bonus of 2 free stocks is like a small trip to a casino to see what you get lol

Not to spam it but if anyone wants to check it out: Start your investment journey With 2 free stocks. Open an account and get a free stock! Deposit and get another free stock! https://act.webull.com/in/tJF9alwUEeTp/mzk/inviteUs/

On TDA I Bought into sme cannabis companies with the looks there will be more legalization eventually. The one I got was cheaper trading at just 1.20, so more potential gain there .. AAPL is finally rebounding after last week, and rest or my stocks are generally good thankfully

My advisor put us into Canopy Growth Group, a Canadian cannabis company, in Sep 2019. Up 65% since then. I think you're right. States are desperate for revenue and this is ripe for the taking.

 

[Gyro25]

My advisor put us into Canaopy Growth Group, a Canadian cannabis company, in Sep 2019. Up 65% since then. I think you're right. States are desperate for revenue and this is ripe for the taking.

Bought into Sundial (SNDL).. huge increase recently and with the cheaper buy in i could afford more shares


Oddly enough as an addictions therapist its not exactly something I 100% believe in, but it definitely is gaining traction across the country, even at the federal level

 

[BigDill]

Since RH was a mess (i was never on it, but now just dislike the company.. still have my tdameritrade), I signed up on Webull. They're little sigb on bonus of 2 free stocks is like a small trip to a casino to see what you get lol

Not to spam it but if anyone wants to check it out: Start your investment journey With 2 free stocks. Open an account and get a free stock! Deposit and get another free stock! https://act.webull.com/in/tJF9alwUEeTp/mzk/inviteUs/

On TDA I Bought into sme cannabis companies with the looks there will be more legalization eventually. The one I got was cheaper trading at just 1.20, so more potential gain there .. AAPL is finally rebounding after last week, and rest or my stocks are generally good thankfully

I would read up a bit on WeBull. I’m not sure I would be 100% comfortable with them having all of my info, but YMMV. I went with Fidelity.

 

[Gyro25]

I would read up a bit on WeBull. I’m not sure I would be 100% comfortable with them having all of my info, but YMMV. I went with Fidelity.

Well I thought I did.. complaints about the app and customer service sure, but I couldn't find any glaring issues or like identify theft etc. Can you elaborate?

 

[BigDill]

Well I thought I did.. complaints about the app and customer service sure, but I couldn't find any glaring issues or like identify theft etc. Can you elaborate?

My understanding is that it is owned by a Chinese company, with Chinese programmers and operations. While I am not putting on my tinfoil hat, I would have a concern about how my ownership of the stocks would look if there was ever a dispute between the two countries. Maybe I am overthinking, but I would prefer to have a US or similar based company if it’s anything more than play money. But that’s just me being over critical, I think.

 

[Reframmellator]

My understanding is that it is owned by a Chinese company, with Chinese programmers and operations. While I am not putting on my tinfoil hat, I would have a concern about how my ownership of the stocks would look if there was ever a dispute between the two countries. Maybe I am overthinking, but I would prefer to have a US or similar based company if it’s anything more than play money. But that’s just me being over critical, I think.

Just because you're paranoid doesn't mean they are not out to get you.

And @greekelite touched a nerve when he said he wasn't 100% aligned with a paarticular investment he made. A lot of companies across the spectrum increasingly seem to be deciding whether or not to do business with you based upon their perception(s) of your alignment(s) on certain issue(s). That cannot be good for the economy in the long run, and it's prompted me to move my savings balance from an online account at a large financial institution to my local credit union. Just in case I want to get my hands on it in a hurry,

 

[EstebanTornado]

Since RH was a mess (i was never on it, but now just dislike the company.. still have my tdameritrade), I signed up on Webull. They're little sigb on bonus of 2 free stocks is like a small trip to a casino to see what you get lol

Not to spam it but if anyone wants to check it out: Start your investment journey With 2 free stocks. Open an account and get a free stock! Deposit and get another free stock! https://act.webull.com/in/tJF9alwUEeTp/mzk/inviteUs/

On TDA I Bought into sme cannabis companies with the looks there will be more legalization eventually. The one I got was cheaper trading at just 1.20, so more potential gain there .. AAPL is finally rebounding after last week, and rest or my stocks are generally good thankfully

On AAPL I know what your talking about, I lost 6 figures on paper right when the shorts had to start paying their bets. Coincidence? But I’m not worried because I’m writing covered calls for some pretty sweet weekly premiums.

 

[Gyro25]

My understanding is that it is owned by a Chinese company, with Chinese programmers and operations. While I am not putting on my tinfoil hat, I would have a concern about how my ownership of the stocks would look if there was ever a dispute between the two countries. Maybe I am overthinking, but I would prefer to have a US or similar based company if it’s anything more than play money. But that’s just me being over critical, I think.

Totally understandable concerns. This app is play money, and more a shyts and giggles to see what stocks I get rolled. My main investing occurs on TDA, and frankly I don't really even trust US companies to not sell me out lol

Just because you're paranoid doesn't mean they are not out to get you.

And @greekelite touched a nerve when he said he wasn't 100% aligned with a paarticular investment he made. A lot of companies across the spectrum increasingly seem to be deciding whether or not to do business with you based upon their perception(s) of your alignment(s) on certain issue(s). That cannot be good for the economy in the long run, and it's prompted me to move my savings balance from an online account at a large financial institution to a my local credit union. Just in case I want to get my hands on it in a hurry,

I think I get what you mean, in that due to your investments and transactions, some companies and refuse services to you in the future due to perceived, say, political ideologies? I mean I could understand that, but I think at the end of the day those big firms care more about money than anything. If I misunderstood, sorry, but curious what you meant

And if they looked at my 'portfolio', they'd see investments in technology, golf, US oil, and 1 Canadian weed company lol think ill be ok

On AAPL I know what your talking about, I lost 6 figures on paper right when the shorts had to start paying their bets. Coincidence? But I’m not worried because I’m writing covered calls for some pretty sweet weekly premiums.

Geez and I thought my $800 dip was bad lol my buddy is getting into calls and puts, but that's way too advanced for my level of investing

 

[EstebanTornado]

Totally understandable concerns. This app is play money, and more a shyts and giggles to see what stocks I get rolled. My main investing occurs on TDA, and frankly I don't really even trust US companies to not sell me out lol


I think I get what you mean, in that due to your investments and transactions, some companies and refuse services to you in the future due to perceived, say, political ideologies? I mean I could understand that, but I think at the end of the day those big firms care more about money than anything. If I misunderstood, sorry, but curious what you meant

And if they looked at my 'portfolio', they'd see investments in technology, golf, US oil, and 1 Canadian weed company lol think ill be ok



Geez and I thought my $800 dip was bad lol my buddy is getting into calls and puts, but that's way too advanced for my level of investing

Calls and puts are a great and pretty safe way to earn income on stock you already own, or stocks you would like to own.

 

[SHOWBOAT12]

Nice to see BB come back a little bit today. I am long BB and that little hedgie war earlier in the week really drove the stock's price down.

 

[BigDill]

Nice to see BB come back a little bit today. I am long BB and that little hedgie war earlier in the week really drove the stock's price down.

I took my lesson and shifted positions on all of these meme stocks, and made back all but $200 in losses since, which I am further filling with crypto day trading. This has been an interesting week and I would have loved to see what would have happened if restrictions would not have been placed. But such is life, so I go on my road.