Why Did Reddit Trigger a GameStop Stock Surge?

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Gamestop's stock price skyrocketed from $20 to $350 in a matter of weeks, largely due to a coordinated buying effort by Reddit users who aimed to counteract bearish hedge fund positions. This surge has resulted in significant losses for hedge funds while generating paper profits for retail investors. Despite the excitement, concerns remain about the long-term viability of Gamestop as a company, which continues to struggle financially. The situation has sparked discussions about market manipulation, with some arguing that the actions of Reddit traders could be seen as a form of "outsider trading" against traditional hedge fund practices. Overall, the episode highlights the tension between retail investors and institutional players in the stock market.
  • #751
I may not have been clear. DCA is neither "good" nor "bad", neither "winner" nor "loser". You need to understand what the alternative is. If you have a block of cash, using DCA as an excuse not to invest it right away is a losing strategy. (This is contingent only on higher expected returns when investing - but if the expected returns are lower, the optimum strategy isn't to invest slowly. It's not to invest at all.)

If you have a steady stream of cash - like most people earning a salary - you can call it "DCA" if you want, but these regular investments are still "invest what you can as soon as you can". I wouldn't want people to think this is a bad idea just because the first case is.
 
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  • #752
BWV said:
answered that in #703 - relative to a lump sum investment

True, but you hear many talk about DCA benefiting from investing incrementally through bear markets, but that benefit is offset by the risk of poor returns coming late in the investing period
So, my problem is that this advice describes one side of a mirror-image pair of scenarios while ignoring the other. If you mirror the scenario, then the advice is also mirrored: DCA beats lump sum. It's weird and inaccurate to state it so generally without specifying it is only true for a limited scenario that is in fact far less common in real life. Stating it like that, many people might come away with the wrong idea of what they should do with their money.
 
  • #753
Vanadium 50 said:
I may not have been clear. DCA is neither "good" nor "bad", neither "winner" nor "loser". You need to understand what the alternative is. If you have a block of cash, using DCA as an excuse not to invest it right away is a losing strategy. (This is contingent only on higher expected returns when investing - but if tehge expected returns are lower, the optimum strategy isn't to invest slowly. It's not to invest at all.)

If you have a steady stream of cash - like most people earning a salary - you can call it "DCA" if you want, but these regular investments are still "invest waht you can as soon as you can". I wouldn't want people to think this is a bad idea just because the first case is.
True, but you also see BS like this:
Dollar-cost averaging helps minimize the impact of volatility when investing as contributions are spread over time instead of invested as a lump sum.
https://www.fidelity.ca/en/investor/investorinsights/dollarcost/

When DCA is just a trade off between sensitivity to near and long term poor returns
 
  • #754
russ_watters said:
So, my problem is that this advice describes one side of a mirror-image pair of scenarios while ignoring the other. If you mirror the scenario, then the advice is also mirrored: DCA beats lump sum. It's weird and inaccurate to state it so generally without specifying it is only true for a limited scenario that is in fact far less common in real life. Stating it like that, many people might come away with the wrong idea of what they should do with their money.
I don’t see where I ignored the other side, I said DCA is just a trade off - the extent to which potential losses are mitigated in the early years is offset by a larger sensitivity to losses in later years.
 
  • #755
BWV said:
I don’t see where I ignored the other side, I said DCA is just a trade off...
Well, you initially said lump sum beats DCA without qualifier or even a description of the scenario under which it would be true. It's less than half true. Usually - the way most people invest - DCA beats lump sum.
 
  • #756
Vanadium 50 said:
I may not have been clear. DCA is neither "good" nor "bad", neither "winner" nor "loser". You need to understand what the alternative is. If you have a block of cash, using DCA as an excuse not to invest it right away is a losing strategy. (This is contingent only on higher expected returns when investing - but if the expected returns are lower, the optimum strategy isn't to invest slowly. It's not to invest at all.)

If you have a steady stream of cash - like most people earning a salary - you can call it "DCA" if you want, but these regular investments are still "invest what you can as soon as you can". I wouldn't want people to think this is a bad idea just because the first case is.
Right. The "better" or "winning" strategy is dictated primarily by how you receive the money. Moreover, the "lump sum" method is not synonymous with "invest it right now", even though people seem to treat it that way. It's a 2x2 matrix with four potential choices:

1. Receive a lump sum, invest it right now.
2. Receive a lump sum, wait to try to time the market.
3. Receive small sums at intervals, invest them when you receive them.
4. Receive small sums, wait to try to time the market (collect a lump sum a la #2).

The key dilemma isn't DCA vs lump sum it's invest right now vs time the market. IMO, they're improperly being conflated. [edit] fixed a significant typo in that last sentence.
 
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  • #757
russ_watters said:
Right. The "better" or "winning" strategy is dictated primarily by how you receive the money. Moreover, the "lump sum" method is not synonymous with "invest it right now", even though people seem to treat it that way. It's a 2x2 matrix with four potential choices:

1. Receive a lump sum, invest it right now.
2. Receive a lump sum, wait to try to time the market.
3. Receive small sums at intervals, invest them when you receive them.
4. Receive small sums, wait to try to time the market (collect a lump sum a la #2).

The key dilemma isn't DCA vs lump sum it's wait vs time the market. IMO, they're improperly being conflated.
You are conflating the fact that people often receive small sums at intervals with DCA. But intervallic investing, like with 401K contributions if often called DCA. Even then, there is no inherent value in the averaging effect of periodic contributions as the protection against early losses comes at the expense of vulnerability to later losses given the timing of returns in a series of periods with the same geometric mean return.

So per above call 2 and 4, discretionary DCA and call 1 and 3 lump sum, then with a positive expected return, the expected values will be in descending order 1 >2>3>4 assuming the DCA period for 2 gets money to work faster than 3
 
  • #758
russ_watters said:
Usually - the way most people invest - DCA beats lump sum.
show me how that is true
 
  • #759
BWV said:
You are conflating the fact that people often receive small sums at intervals with DCA.
No. The definition of "DCA" is independent of how you receive the money. DCA is a strategy of investing small sums at regular intervals, period. Failure to differentiate how you receive the money with what you do with it is exactly the problem I'm complaining about.
Even then, there is no inherent value in the averaging effect of periodic contributions as the protection against early losses comes at the expense of vulnerability to later losses given the timing of returns in a series of periods with the same geometric mean return.
The advantage of "invest now" is always the same, whether it's one big lump sum or a lot of little lump sums. It's not missing gains in the interim.

The way you describe it, it's difficult to see what the alternative scenario is. If you receive $100 a month and invest it right away, what's the alternative scenario? Wait until the end of the year and invest all $1200 at once?
So per above call 2 and 4, discretionary DCA and call 1 and 3 lump sum, then with a positive expected return, the expected values will be in descending order 1 >2>3>4 assuming the DCA period for 2 gets money to work faster than 3
How is #2 any form of DCA if it's just one lump sum that you are investing? It's really confusing to call investing a lump sum a version of DCA when it's clearly a lump sum. It really seems like you're twisting "lump sum" into "invest right now" and "DCA" into "wait/time the market".
show me how that is true
If you follow the definitions at face value and not the half-twist you did above, it is self-evident why DCA #4 beats Lump Sum #2. But here's an example:

DCA vs Lump Sum.jpg
 
  • #760
russ_watters said:
No. The definition of "DCA" is independent of how you receive the money. DCA is a strategy of investing small sums at regular intervals, period. Failure to differentiate how you receive the money with what you do with it is exactly the problem I'm complaining about.

The advantage of "invest now" is always the same, whether it's one big lump sum or a lot of little lump sums. It's not missing gains in the interim.

The way you describe it, it's difficult to see what the alternative scenario is. If you receive $100 a month and invest it right away, what's the alternative scenario? Wait until the end of the year and invest all $1200 at once?

How is #2 any form of DCA if it's just one lump sum that you are investing? It's really confusing to call investing a lump sum a version of DCA when it's clearly a lump sum. It really seems like you're twisting "lump sum" into "invest right now" and "DCA" into "wait/time the market".
i assume what you meant from 2 and 4 is holding back to average into the market, pure market timing is outside the scope here. Not saying you have a better alternative than investing your 401K contributions as soon as the money is available, just that there is is no inherent benefit- the dollar-weighted return (IRR) may be substantially lower than the GM for the overall period. your average return for on annual 401k contributions is the average of the return from years 1-10,2-10,3-10,etc if the highest returns are in the earliest years, then the average DCA return will be lower than the GM over the period

russ_watters said:
If you follow the definitions at face value and not the half-twist you did above, it is self-evident why DCA #4 beats Lump Sum #2. But here's an example:

View attachment 313577
That example is trivial, with two different DCA methods and with no vol in returns and example 1 is just invested longer at the same return. Try to construct a return series with positive and negative annual returns with a gm of 7%, then playing with the sequencing of returns to see what I am talking about here
 
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  • #761
BWV said:
i assume what you meant from 2 and 4 is holding back to average into the market,
Neither of those are "averaging in" as you are investing all of the money at once in both scenarios. They are "holding back to lump sum invest".
pure market timing is outside the scope here.
Market timing, "pure" or otherwise, isn't outside the scope, it's exactly the issue at hand. The timing options are:
1. Now.
2. Later.
3. Average over now and later.
Not saying you have a better alternative than investing your 401K contributions as soon as the money is available, just that there is is no inherent benefit
No inherent benefit than what? Waiting and investing it all as a lump sum at the end of the year? No, there's definitely an inherent benefit in investing it when you get it; not missing the gains. That's always what the benefit is.
..the dollar-weighted return (IRR) may be substantially lower than the GM for the overall period. your average return for on annual 401k contributions is the average of the return from years 1-10,2-10,3-10,etc if the highest returns are in the earliest years, then the average DCA return will be lower than the GM over the period
What's "GM"? You're not defining your terms/scenarios here.
That example is trivial...
Yes, that's my point.
Try to construct a return series with positive and negative annual returns with a gm of 7%, then playing with the sequencing of returns to see what I am talking about here
"playing with different return/volatility scenarios" is a red herring. Unless you're custom-making/cherry-picking the scenarios, "invest it now" is going to be the better option most of the time. The whole point is that there's no way to predict the future so your best option is the one that produces the best result most of the time. That's "invest it now".
 
  • #762
russ_watters said:
Neither of those are "averaging in" as you are investing all of the money at once in both scenarios. They are "holding back to lump sum invest".

Market timing, "pure" or otherwise, isn't outside the scope, it's exactly the issue at hand. The timing options are:
1. Now.
2. Later.
3. Average over now and later.

No inherent benefit than what? Waiting and investing it all as a lump sum at the end of the year? No, there's definitely an inherent benefit in investing it when you get it; not missing the gains. That's always what the benefit is.

What's "GM"? You're not defining your terms/scenarios here.

Yes, that's my point.

"playing with different return/volatility scenarios" is a red herring. Unless you're custom-making/cherry-picking the scenarios, "invest it now" is going to be the better option most of the time. The whole point is that there's no way to predict the future so your best option is the one that produces the best result most of the time. That's "invest it now".
Right, invest now > DCA what I have been saying all along
GM = geometric mean
 
  • #763
BWV said:
Right, invest now > DCA what I have been saying all along
So as I've been saying, the problem is conflating the terms. The way you are using those terms is not the way they are being used out in the real world. "Invest now" is not synonymous with "lump sum". "DCA" is not synonymous with "invest later". If you are investing in a 401k with every paycheck, that's both "invest now" and "DCA". So, saying "invest now > DCA" is gibberish for that scenario.
 
  • #764
I think we are getting twisted in language.

The only decision one is truly faced with is "where do I invest this dollar in my hand?" The past is past. The future involves dollars you don't have yet. In a choice between "invest now" and "invest later", I can make at least two (no, three) good arguments why "invest now" is the better strategy, but won't unless my arm is twisted.

If it makes people feel smarter to call "investing - at least a little - with every paycheck" "dollar cost averaging", great. If you prefer to call it "pay yourself first", that's great too. If it helps remind you that volatility is part of the game, and the fact that at asset fell right after you bought it is just part of the game and not to worry so much about it, that's OK too. Whatever it takes to handle the psychological aspects of investing.
 
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  • #765
Vanadium 50 said:
If it makes people feel smarter to call "investing - at least a little - with every paycheck" "dollar cost averaging", great. If you prefer to call it "pay yourself first", that's great too. If it helps remind you that volatility is part of the game, and the fact that at asset fell right after you bought it is just part of the game and not to worry so much about it, that's OK too. Whatever it takes to handle the psychological aspects of investing.
I agree with everything you said, and for this last part; DCA isn't a term I ever use, but it looks to me like it's used a lot online, and I'm seeing a lot of what look like click-baitey articles comparing DCA and lump sum that appear to me to muddy the waters and do more harm than good. That was my complaint about the post that started this.

Here's an example where the headline might cause confusion if one doesn't read the article:

https://www.cnbc.com/amp/2021/08/12...better-lump-sum-or-dollar-cost-averaging.html
 
  • #766
Welcome to the internet, where anybody living in their parents' basement and listening to a podcast or two can declare themsevles experts. I have moved my thinking from "they must be corrected!" to "pay them no mind" to "I'm happy to be their counterparty".
 
  • #767
russ_watters said:
comparing DCA and lump sum
OK, consider my arm twisted.

(1) If the asset will earn money, why wait to start that earning?
(2) If you have a balanced portfolio and then get some cash, you're now overbalanced in cash. Why wait to correct it?
(3) If your plan is to 'time the market', that implies you have information that (most) of the market does not. That information advantage will only go down with time.
 
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  • #768
Just wanted to mention today, we saw a short squeeze on the whole market. The way it played out is this. Before the market opened, there was some lousy inflation data. That sent the futures on the S&P 500 tumbling over 70 points. Some short sellers thought, excellent - now is a good time to take profits. The market opened about 60 points lower (I did a 4 delta call credit spread myself thinking it would go lower still - I am a very conservative spread trader). The short sellers had to buy back their shares, so the demand went up. Hence the price went up despite the bad news. Other short sellers seeing the price rise on lousy news wanted out, so the price went up further - panic set in and what should have been a big down day became a 150-point up day - which is very rare. Good thing my spread was at 4 delta - it is now at 13 delta. The reason I chose 4 delta is it was 15% above the market, and over the last 60 years, the market has only moved over 15% in a month twice - 4 delta was 15% above the market. We will see if it reaches my adjustment at 25 delta. Maybe it will be short-lived - but we will see.Thanks
Bill
 
  • #769
bhobba said:
Just wanted to mention today, we saw a short squeeze on the whole market. The way it played out is this. Before the market opened, there was some lousy inflation data. That sent the futures on the S&P 500 tumbling over 70 points. Some short sellers thought, excellent - now is a good time to take profits.
Do you have data supporting this, or is this just one of those ex post stories the financial press likes to make up?
 
  • #770
BWV said:
Do you have data supporting this, or is this just one of those ex post stories the financial press likes to make up?

It is what all the traders I know said - and I figured it out independently. They have been playing the market for a long time. The evidence is we had lousy inflation data that sent the premarket down over 70 points. No other data came in. When the market opened, it opened 60 points lower and, as expected, went even lower to 80 points lower. Then it turned around a bit, then a bit more and finally started rising through the whole day. Short sellers set automated stops, and you could see the avalanche buying as those stops were hit. Is this proof of a short squeeze - of course not - just the most reasonable explanation. So I will change my statement - an example of a likely short squeeze. The futures are still rising - so may continue today - depending on when it exhausts itself. I have two choices - either close my spread when it hits the stop loss - for a high probability credit spread, usually 3 times the credit or sell a put credit spread to take in more credit to limit losses that way. If a short squeeze, the second option is what most traders would do. I have that set at 25 delta - it's at 15 delta now. Hopefully, it will not reach that, and I will have to adjust

Thanks
Bil
 
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  • #771
bhobba said:
It is what all the traders I know said - and I figured it out independently. They have been playing the market for a long time. The evidence is we had lousy inflation data that sent the premarket down over 70 points. No other data came in. When the market opened, it opened 60 points lower and, as expected, went even lower to 80 points lower. Then it turned around a bit, then a bit more and finally started rising through the whole day. Short sellers set automated stops, and you could see the avalanche buying as those stops were hit. Is this proof of a short squeeze - of course not - just the most reasonable explanation. So I will change my statement - an example of a likely short squeeze. The futures are still rising - so may continue today - depending on when it exhausts itself. I have two choices - either close my spread when it hits the stop loss - for a high probability credit spread, usually 3 times the credit or sell a put credit spread to take in more credit to limit losses that way. If a short squeeze, the second option is what most traders would do. I have that set at 25 delta - it's at 15 delta now. Hopefully, it will not reach that, and I will have to adjust

Thanks
Bil
Yes, should be careful of easy narratives and trader lore. Bloomberg's short interest index - the performance of the 100 stocks in the Russell 3000 with the highest short interest - returned 1.9% yesterday, compared to 2.6% for the S&P 500 and 2.4% for the Russell 2000. This does not preclude some change in index short / long positioning, but makes it unlikely that covering by short sellers of individual stocks contributed significantly to the reversal yesterday
 
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  • #772
Random Thought:

Price rebound math is brutal. BTC is down from 60K to 20K roughly. That 66% loss requires a 200% gain to get back to even.

Wondering how long meme stocks that fell 75, 80, and 90% this past year take to get even?
 
  • #773
kyphysics said:
Random Thought:

Price rebound math is brutal. BTC is down from 60K to 20K roughly. That 66% loss requires a 200% gain to get back to even.

Wondering how long meme stocks that fell 75, 80, and 90% this past year take to get even?
and do you know how something goes down 90% ? it first goes down 80% then it drops 50%
 
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  • #774
BWV said:
and do you know how something goes down 90% ? it first goes down 80% then is drops 50%
Always fascinating stuff. Fun to think about.

Snapchat stock was $83.11 recently and fell to $9.34. Almost a 90% drop.

Wonder if it'll get back to $83.11 by 2030?
 
  • #776
kyphysics said:
Wondering how long meme stocks that fell 75, 80, and 90% this past year take to get even?
I think most of them may go out of business before they ever do that.
 
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  • #777
Amazon.com stock dropped by over 90% in the early 2000s
 
  • #778
kyphysics said:
Wondering how long meme stocks that fell 75, 80, and 90% this past year take to get even?
phinds said:
I think most of them may go out of business before they ever do that.
BWV said:
Amazon.com stock dropped by over 90% in the early 2000s
Given that the Nasdaq dropped by 78% in the crash, an extra factor of 2 doesn't sound like much to me. I'm not sure if Amazon had pivoted yet from selling books to selling everything, but the meme stocks have not made pivots that would imply future justification for even their current values. There really was never any justification for their spikes and their crashes were not due to an overall market crash.

Also, that makes the odds for BTC going back to $60k much better than the meme stocks. Since BTC's value is based on nothing whatsoever its value can be anything for no reason. Meme stocks are companies, so they have basis for their value which makes massive price fluctuations for no reason harder to do.
 
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  • #779
Nobody knows. That's why I dollar cost average (DCA) into low-fee ETFs like Vanguard VDHG. Just keep doing that and forget about market gyrations. Also, with a small amount of money, I trade options. My current strategy is to sell low delta spreads. The exact strategy is called the Monthly Income Machine you can Google on if interested. But I only do it with a small amount of money. If your strategy is viable it will grow, if not, that is why you do it with a small amount of money. The kind of returns you can expect after tax (and is, of course, dependent on your tax situation), is a bit less than DCA into ETF's here in Australia (you need to consult a good accountant). The trouble is you can't spend capital gains, and if you sell - then whack - you pay tax. That's why it complements DCA well - that can provide, along with dividends from your ETFs, the income you need to live. The other strategy is to sell puts and calls on your ETFs to increase returns. It's called the wheel those interested can Google on. The majority of your money should be in low-fee ETF's you do not sell. But as to predicting what will happen in the long term with individual stocks - even Warren Buffett can't do that - he simply buys sound companies and holds them. He is good at picking companies that do well long-term - but not all his picks work out. If you have faith in Warren, you can always buy his class B shares and like an ETF hold for the long term.

Thanks
Bill
 
  • #780
russ_watters said:
Given that the Nasdaq dropped by 78% in the crash, an extra factor of 2 doesn't sound like much to me. I'm not sure if Amazon had pivoted yet from selling books to selling everything, but the meme stocks have not made pivots that would imply future justification for even their current values. There really was never any justification for their spikes and their crashes were not due to an overall market crash.

Also, that makes the odds for BTC going back to $60k much better than the meme stocks. Since BTC's value is based on nothing whatsoever its value can be anything for no reason. Meme stocks are companies, so they have basis for their value which makes massive price fluctuations for no reason harder to do.
Yeah, Amazon may not be the best case for a rebound. . .You can argue it was a once-in-a-lifetime super company. I have doubts about whether Zoom, Snapchat, Pinterest, Shopify (which has been hurt by "Buy w/ Amazon"), Teladoc, Square/Block, etc. will have the same wide-reaching, transformational success and profitability to justify their once lofty valuations.

Amazon and Netflix aggressively attacked their spaces with first-mover advantages when so many people didn't believe in the internet. They laughed at their business models and potential to disrupt traditional brick and mortar stores.

Nowadays, everyone already knows how powerful the internet is in quickly reaching a wide audience and the ability to make money using it (be it in e-commerce, advertising, business/productivity tools, etc.). Not sure Shopify can attack Amazon successfully with what they do. Teladoc has lots of competitors (even Zoom is used in telehealth). Men don't seem so interested in Pinterest. "Older" people don't use Snapchat. etc.

Some of those growth meme stocks could be huge, but I wouldn't think Amazon would be the template to use for most of their trajectories.
 
  • #781
kyphysics said:
Some of those growth meme stocks could be huge...
Bear in mind the title of this thread. Buying shares of a stock because one expects the company to do much better in the future is a very different thing from buying shares of a stock to try to attack a hedge fund. One needs to think hard about what they are really expecting the company to do and why they are buying the stock.
 
  • #782
Here's a good article on what we're talking about, specific to GME*:
https://www.fool.com/investing/2022/03/19/gamestop-bulls-making-3-mistakes/

Somebody looking to potentially buy some GME or any other meme stock today has to either identify a growth opportunity or see it as a cost of warfare. I'll set aside the second and focus on the first. What are GME's prospects for growth? There's two basic possibilities:
  1. Another meme-fueled frenzy pump-and-dump. If you expect that, you can get in now so you can dump at the peak of the bubble before it crashes again.
  2. GME is going to become a much healthier/more profitable company than it is today (the usual reason people buy a stock).
For #2; Gamestop is not a complicated company. As the article says, their prospects for survival are decent, but surviving isn't thriving. In order to thrive, they'll need to fundamentally change what they are as a company. Maybe they can, but they haven't shown a good reason to believe they will. The article mentions a foray into NFTs, but it was written before that crashed (oops).

*fool does a lot of shady clickbait advertising, so it's rare I'd say that about one of their articles...
 
  • #783
Not a fan of Motley Fool, b/c the depth of analysis in their articles is often lacking.

I'm talking about the freemium stuff, though, as I don't subscribe to their paid offerings. The free stuff often has only qualitative points that are often obvious already and a lack of quantitative valuation analysis.

This is maybe slight hyperbole, but you could easily get an article like this:

"Three Reasons to Buy Disney Stock Right Now"
Disney's earnings have taken a hit lately, due to the pandemic shutdown of parks. Once the pandemic is over and parks reopen, earnings shall rebound.
Disney+'s subscribers are growing at a pace faster than Netflix's early adoption and may overtake them in total subs within three years.
Disney's moat is unassailable in the content industry. Whether 5, 10, or 15 years from now, Disney will still be around and the leader in the industry of family and kid entertainment.


I usually roll my eyes. I could have written that! There's no quantitative analysis/ valuation done. All points are obvious. There's no bear case. . . .A middle-schooler reading the news or watching CNBC could have written this.

Here is an ACTUAL Motley Fool article perhaps not too far away from this hyperbolic version:

Why I Bought Disney at Its High​

https://www.fool.com/investing/2021/04/27/why-i-bought-disney-at-its-high/

I thought the author was a moron for ignoring valuation and certainly didn't take her advice. I personally bought when it got to $93 this year (it's been oscillating between $90 and $100 lately) vs. the $200 she paid.

Very rarely will I find an article I like on MF. I prefer Seeking Alpha, but don't always agree with them either. But, I feel the articles are much better.
 
  • #784
russ_watters said:
Bear in mind the title of this thread. Buying shares of a stock because one expects the company to do much better in the future is a very different thing from buying shares of a stock to try to attack a hedge fund. One needs to think hard about what they are really expecting the company to do and why they are buying the stock.
I guess I lump "growth stocks" (Snapchat, Shopify, Square/Block, etc.) that got out of control into the category of "meme stocks" too (Gamestop, Bed Bath and Beyond...airlines...cruise ships, etc.).

But, yeah, I agree there's a difference. One at least has a viable business that might grow into its valuation...the other is used for attacking hedge funds and/or was a retail investor meme/popularity play.
 
  • #785
kyphysics said:
Snapchat stock was $83.11 recently and fell to $9.34. Almost a 90% drop.

Wonder if it'll get back to $83.11 by 2030?
now it's $7.91 afterhours...who wants to do the rebound math?
 
  • #786
kyphysics said:
Always fascinating stuff. Fun to think about.

Snapchat stock was $83.11 recently and fell to $9.34. Almost a 90% drop.

Wonder if it'll get back to $83.11 by 2030?

kyphysics said:
now it's $7.91 afterhours...who wants to do the rebound math?
sure, it only needs to go up around 5%

after a 10-1 reverse split
 
  • #787
Twilio - from $425 to $42.74 in a little over a year.

Has anyone witnessed this sort of devastation with so many growth and meme stocks since the Dot Com bust? Was 2008 like this?
 
  • #789
Kodak
1667655850558.png
 
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  • #791
So, the idea is tht if there is some sort of corporate meeting, everyone gets together and chomps popcorn while the CEO blathers on over Zoom?
 
  • #792
Vanadium 50 said:
So, the idea is tht if there is some sort of corporate meeting, everyone gets together and chomps popcorn while the CEO blathers on over Zoom?
Apparently. I heard some comment about "enhancing the participants experience".

I strongly dislike some stranger deciding how they will 'enhance my experience'. I'll decide how I will enhance my experience - not someone else - thank you vary much.

Maybe they could get Peleton involved somehow. They could ride their indoor cycles, chomp popcorn and listen to CEO blather.
 
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  • #793
Well, maybe they could do a double-feature with a X-rated movie. "Our profits aren't the only thing that's obscene!"
 
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  • #794
Elon Musk’s tenure at Twitter got even bumpier on Thursday, as he reportedly told employees during an emergency all-hands meeting that he can't rule out the company filing for bankruptcy in the next year.
https://finance.yahoo.com/news/musk...ce-bankruptcy-next-year-report-221322212.html

I've heard the same story from a variety of sources. I have to wonder about a CEO or owner who muses publicly about a failing company.
 
  • #795
Astronuc said:
I've heard the same story from a variety of sources. I have to wonder about a CEO or owner who muses publicly about a failing company.

I think what is going on in Elon's mind is anybody's guess, but we can make a reasonable hypothesis. Both where I am in Australia and the US, we have free speech guaranteed by law (with a few necessary caveats). When Twitter was asked to explain exactly how some banned people breach those caveats, you get answers like, such as in the case of Jordan Peterson; 'for hateful conduct'. Who decides what is hateful and what is not? It looked to many somewhat arbitrary to the point Elon felt those making the decisions were simply doing it based on their biases. This irked him to the point he spent a fortune buying Twitter so he can have the last laugh about an issue that annoys him. Witness going into Twitter carrying a sink. You are on notice - I am in charge now, and what I say is how Twitter will be run. I suspect putting the bogyman of bankruptcy on the table is just another tool he is using to bring home to all employees - the times they are changing.

For what it is worth, IMHO, when Twitter makes a decision, some think is not reasonable, then call it out. Jordan Peterson, who has a large following, did just that. They either must tackle Jordan's arguments (not easy to do as he is good at arguing his position) or ignore him and leave people to think they can't counter them. Its credibility sufferers and market forces will eventually force a change or it will not survive. Just a personal view. Maybe Elon just wants to hasten it along and hopes the forum will gain in popularity by changing how it is run so he can make some money - although I believe that is a long shot. Still one never knows.

Thanks
Bill
 
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  • #796
I see that AMC is now down to $4, GME is down to $16, and Robinhood is below $9. Gravity wins again.
 
  • #797
phinds said:
I see that AMC is now down to $4, GME is down to $16, and Robinhood is below $9. Gravity wins again.

Nobody can predict the gyrations of the market except in statistical terms eg over the long term the market goes up. That is how all legit market strategies work, even just dollar cost averaging into an index fund. For a different approach on the same theme, see the following:


It relies on the fact that over a long period, 90% of the time, the market is greater 65 days at any point regardless of market conditions. However, its long-term profit is about 20% pa, with scary volatility. It is so volatile one of its rules is you only trade it with 10% of your capital.

It does not give the figures for last year, which was a bear market. It lost about 200%. But the previous year made about 500%. See what I mean by volatile? That 20% overall is based on a trade size of 10%.

If you have the guts to try it, it does have the advantage of the other 90% of your capital can be put in a high-interest/distribution account or ETF (eg PUTW), or you can do it on option margin ie your option buying power is twice any other assets you may hold. If you have a large account some brokers will give a much greater margin.

Thanks
Bill
 
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  • #798
phinds said:
I see that AMC is now down to $4, GME is down to $16, and Robinhood is below $9. Gravity wins again.
It's still down a lot from the high, but above what it was before being memified: note that GME had a 4:1 split.
 
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  • #800
But stonks only go up!

I'm not sure what is cause and effect here. GME missed analyst expectation s by 10% and is continuing their revolving door CEO um....tradition. Which is Wall Street reacting to?

They are down 17% - that's not a crazy amount on missing earnings by 10%, especially as revenues continue to slide. GME doesn't pay a dividend, so a rationl investor will buy the stock only if they believe it will appreciate faster than a safe investment, like US Treasuries. Those are running at about 4.5% now.

Does GME look like it will do better than that? Apparently fewer and fewer people think so.
 
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