Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[TwistedChief]

Originally Posted by MTG#10

Also I'll do something rare for an internet debate, I'll will admit you know more about this shit than I do and I'm still learning. Having said that since you seem to be legit and know your shit what's your take on the entire situation? Have you read or seen the reports of the SEC investigation into the heavy manipulation of AMC by firms like Citadel re-routing retail investor purchases AH through dark pools so they wont hit the NYSE and affect the price? Have you seen/read reports of the insane amount of synthetic shares being traded every single day? These reports have been covered on CNBC and all over legit investing sites, not just on Reddit and Youtube channels. Do you think this whole thing is all bullshit and 4 million apes are wrong? Obviously time will tell on that, just asking what your opinion. As in-tune with the market as you seem to be I would think you'd be fascinated by what's going on and would have a theory of your own.

Here's what I will tell you. I think the reports of hedge fund nefarious behavior are crazy overstated. I think there's a lot that goes on in the shadows of these exchanges, but that doesn't make it nearly as evil as many would imagine. These stocks have a mind of their own and they've created a movement that no one saw coming. I applaud that as they have changed the rules of the game in a meaningful way. They have taken on some of the world's most sophisticated investors and broken the system. I worked at Goldman Sachs yet was so sympathetic to Occupy Wall Street right outside of our offices, so I fully understand the disdain for the financial establishment. It was part of why I left to go to a hedge fund in the first place because it was more egalitarian. And fair.

If I had to guess, these meme stock trades at some point won't end well. You've had a tailwind of a ridiculous bull market and remarkably easy financial conditions thanks to the Fed. Those factors aren't necessarily going away entirely anytime soon, but markets have purges every once in awhile and eventually you may see a sharp market-wide one. And the idea that people will hold onto these stocks believing that others will hold the line when the market as a whole is cratering will be the undoing. That's how I think this will end up. But timing that is virtually impossible. Just know that there's probably a very large negative tail that exists and things can go into a vacuum.

BUT. You mentioned Citadel. I dislike them with the fire of a thousand suns. I have had run ins in the past with their founder (KG) and he's ruthless to everyone he encounters. They are the worst of our business and I hope he's short every meme stock on the planet and I hope you're long and I hope they go to infinity.

I wish you luck in your investing, MTG #10. I always picture you as baby Mahomes and could never really hate you. Good luck, buddy.

[ChiliConCarnage]

Originally Posted by MTG#10

But back to Vanguard, I get what you're saying about tracking indices, but they bought over 6.7 MILLION shares after the price jump and now own 8.5% of the entire float (not counting counterfeit shares obviously but we'll get to that later). Do they own that high of a stake in all companies? If not why AMC? Are you telling me there's nobody who works at Vanguard that would see what happened and step in to stop this purchase(s) if it were just an overpriced stock destined to fail? I find that very hard to believe, but you obviously know more about them than I do so I wont argue about it.

The Big Three—BlackRock, Vanguard, and State Street—are the most important ... Some 22% of the shares of the typical S&P 500 company sits in

That's from Jan 2020. Blackrock and Vanguard are a multiple bigger than State Street, so, yeah it wouldn't be rare for them to hold 10% of a lot of companies. Also, indices tend to rebalance quarterly or biannually. If something shoots up abnormally fast it can become a huge weight in the small cap index until rebalancing moves it up to the mid caps. The system wasn't designed for stocks jumping 1000% a quarter or whatever

The whole point of indexing is you're trusting the market as a whole for pricing. TSLA was added to the S&P 500 last year after a huge run up. Was it a good time to add Tesla? We'll see but it hit profitability goals and was added.

[MTG#10]

Originally Posted by TwistedChief

Here's what I will tell you. I think the reports of hedge fund nefarious behavior are crazy overstated. I think there's a lot that goes on in the shadows of these exchanges, but that doesn't make it nearly as evil as many would imagine. These stocks have a mind of their own and they've created a movement that no one saw coming. I applaud that as they have changed the rules of the game in a meaningful way. They have taken on some of the world's most sophisticated investors and broken the system. I worked at Goldman Sachs yet was so sympathetic to Occupy Wall Street right outside of our offices, so I fully understand the disdain for the financial establishment. It was part of why I left to go to a hedge fund in the first place because it was more egalitarian. And fair.

If I had to guess, these meme stock trades at some point won't end well. You've had a tailwind of a ridiculous bull market and remarkably easy financial conditions thanks to the Fed. Those factors aren't necessarily going away entirely anytime soon, but markets have purges every once in awhile and eventually you may see a sharp market-wide one. And the idea that people will hold onto these stocks believing that others will hold the line when the market as a whole is cratering will be the undoing. That's how I think this will end up. But timing that is virtually impossible. Just know that there's probably a very large negative tail that exists and things can go into a vacuum.

BUT. You mentioned Citadel. I dislike them with the fire of a thousand suns. I have had run ins in the past with their founder (KG) and he's ruthless to everyone he encounters. They are the worst of our business and I hope he's short every meme stock on the planet and I hope you're long and I hope they go to infinity.

I wish you luck in your investing, MTG #10. I always picture you as baby Mahomes and could never really hate you. Good luck, buddy.

I admittedly fell into the "all hedge funds are evil" trap and the us against them mentality but I get not all are out there with the sole purpose to destroy struggling companies and screw over retail investors. I'm sure most if not all hedge funds had some sort of short position on AMC because it was going under before all this, but the smaller ones have likely already covered. It's the pricks like Citadel and what happened in '08 that give you guys a bad name and I'm glad you and now I recognize that. No hard feelings.

[eDave]

That was a good discussion.

[DaFace]

Originally Posted by TwistedChief

If I had to guess, these meme stock trades at some point won't end well. You've had a tailwind of a ridiculous bull market and remarkably easy financial conditions thanks to the Fed. Those factors aren't necessarily going away entirely anytime soon, but markets have purges every once in awhile and eventually you may see a sharp market-wide one. And the idea that people will hold onto these stocks believing that others will hold the line when the market as a whole is cratering will be the undoing. That's how I think this will end up. But timing that is virtually impossible. Just know that there's probably a very large negative tail that exists and things can go into a vacuum.

This has been my biggest concern (and the reason that I am pretty anti-memestock in this thread). We've basically trained a generation of "investors" to ignore fundamentals and take huge risks because bull markets tend to favor risky investments. Eventually, though, there's going to be a correction, and it could hit very, very hard for those who have gone all-in on the most risky investing options.

If people want to throw a little money at memestocks in hopes of catching a wave for a big payday, go for it. I actually don't have a big issue with that. Just make sure that you're protecting yourself with an overall portfolio that can withstand a correction down the road.

(And, preferably, at least CONSIDER that information provided by people who have a vested interest in getting more people to buy in might not be the most objective source of truth.)

[MTG#10]

Originally Posted by eDave

That was a good discussion.

Can we be bros again? No homo.

[Hog's Gone Fishin]

Bought 180 more shares AMC today. LOL

[KChiefs1]

Originally Posted by Hog's Gone Fishin

Bought 180 more shares AMC today. LOL

I bought 500 more today. I maybe crazy but I got a feeling the MOASS is coming very soon.

[MTG#10]

Originally Posted by Hog's Gone Fishin

Bought 180 more shares AMC today. LOL

Serious?

[Hog's Gone Fishin]

Originally Posted by MTG#10

Serious?

Absolutely

[MTG#10]

Originally Posted by Hog's Gone Fishin

Absolutely

I bought 40 more...460 was bothering me so now I'm at an even 500 and done. I'm out of dry powder, just gonna wait and see what happens from here on out.

[Hog's Gone Fishin]

Trey is starting a 100K challenge for anybody that wants to follow

[Iconic]

Don't honestly feel comfortable investing in anything in the stock market at the moment. Too much FUD regarding inflation and the possibility of a crash. I'm throwing it all in Crypto and keeping a stack for whenever the entire stock market shits the bed for a buy in.

[lewdog]

The market is acting very rational to world news currently. This correction could continue with a short term drop in an overall bullish market longer term.

[MTG#10]

Today looking to be a bloodbath, and of course I have no dry powder