They only have value because they look nice. They are also three of the four railroads in Monopoly, which makes those particular certificates a crossover collectible. They are collectively worth $20 as wallpaper.
Great post - thanks!
Interesting article:
Survey of investors with $1 million or more in a brokerage account:
- 16% - fully in a bubble
- 46% - somewhat of a bubble
- 29% - approaching a bubble
- 9% - nowhere near a bubble.
I think this week will be a reckoning for some of the reddit investors, particularly those who saw GME and AMC as a betting opportunity.
The rich boys have money to lose; the little guy doesn’t and he’s a fool trying to play that game for long.
The chatter on reddit’s WSB sub seems anxious now - the swagger’s clearly not there today like it was last week. I wonder what happens if some trolls start saying “Well that’s it, guys. I’m selling now before I lose it all.” “Sinking ship guys -sell now!!!”
I have no doubt there’s an army of hedge fund trolls.
One interesting theory is that the Gamestop short squeeze is on the verge of revealing that the hedges have actually ended up counterfeiting stock since the volume of what’s out there seems to be so wildly in excess of what’s actually been issued by Gamestop.
Explanation of how counterfeiting stock works:
If the Reddit autists are right and they’ve uncovered a giant nest of worms with their little shovels then yeah, it could be really bad for the Wall Street giants. Once you see ONE nest of worms you start figuring there might be way more than that and if the Redditors go on worm nest hunts it’s gonna be a sad and sorry day for the Wall Streeters. *shrug* Fuckem.
Here’s another ELI5 explanation of the fun:
Also, you might see the term “short ladder” being thrown around as it’s likely that’s what’s going on now–the hedges trying to spook the retails into panicking and stampeding for the exits. Trading volume says that’s not happening lol.
Short ladder is explained here:
That’s something else I’ve wondered about.
Financial crises end up being crises because at some point, something is exposed on a massive scale and people then collectively lose faith in the market. All economic exchanges are, to a certain degree, premised on transparency and faith. People will part with their money only when they have some idea of what they’re going to lose and what they stand to gain. When they can’t in any way make out the risk and the potential gain from the exchange, faith and trust in the invisible hand disappears.
That counterfeiting stock article is a combination of facts, scaremongering about normal things, and a healthy dose of wrongheaded bullshit. I’m not even going to spend the time refuting it.
Time will tell, won’t it?
Why? There seems to be some kind of assumption that an investor has to hold all her shares until she sells them. Suppose Sally bought 100 shares at $10/share. When the price reached $200, she sold 10 shares. She has now locked in $1000 of profit. If her remaining shares become worthless, she has still doubled her initial investment.
Presses go brrr… Stonks go up.
Sorry, couldn’t resist.
It’s 100% an astroturfing campaign. It’s so obvious, it takes about 5 minutes to convince yourself. All the top posts about silver are “don’t buy silver, it’s a trick” and all the people in lower threads saying to buy it are fake accounts. They have no karma, they’re all a couple of days old or zombie accounts. They repost identical sentences. It’s clear as day.
The reason behind it? I sincerely think silver will dump this week, and all the financial media will say “See? Reddit’s a pump and dump scheme. They need to be legislated out of existence.” Otherwise, how do you explain all these mainstream news articles about “the Reddit army” (which doesn’t exist) targeting an asset that they’re quite vocally advocating for NOT targeting? What journalist is printing that obviously fabricated story, and why?
Yesterday Mark Cuban was publically saying the GS investors should hold on to it and buy more and keep the faith, which is transparently idiotic business advice. It WILL collapse. It already is. IF you sold it at $350 good for you, but if you didn’t, almost all that will be lost, and the stupidity of thinking it’s an actual investment is so obvious I think Cuban started shorting it.
If Cuban was shorting the stock already, though, wouldn’t he want it to go down further, and tell people to just cut their losses and sell? I don’t see how telling people to hold the stock would benefit someone who already had short positions in any way. I think he was just playing a populist role in the AMA and telling people on Reddit what they wanted to hear, not because he thought it was a good idea to keep holding.
In a way, it’s like Wile E. Coyote after he ran off the side of the cliff. Or more accurately, a whole crowd of Wile E Coyotes ran off the side of the cliff.
GME’s price will hang up there in space indefinitely. Until people look down and their eyeballs pop out. And as enough individuals get scared then retract their eyeballs long enough to put in a sell order, gravity will apply to all of them together, even the ones who haven’t looked down yet. Cue epic plummet, perhaps followed by an anvil of lawsuits.
So as long as they (whoever they might be, but Cuban at least at that time was one of this group of they) can keep enough of the audience from not selling, or even better, not even looking down, the situation is stable. Balanced on a knife-edge in a windstorm, but stable. Or at least stationary.
Which may be buying time for some other theys to reposition.
I think RJ was saying that Cuban “started” shorting it, meaning that he intends to short more and wants to keep the price pumped up until he’s shorted as much as he wants to short.
That said, I’m inclined to agree with you that Cuban - one of these loudmouth billionaire publicity hounds, AFAICT - just wants to get some good press for himself by aligning himself with The Little Guy.
I’m not saying it isn’t also that. Cuban likes being popular.
It may be idiotic but not transparently so. It depends on whether you believe the squeeze has happened already. There is theoretically enough upside to get it back in that range again.
On the other hand, if it were already well above 350 it would indeed be transparently idiotic to buy and wait for it to continue to skyrocket. Since the hedge funds had already lost quite a huge chunk of their cash in riding the short to 350, there wouldn’t be any actual money to squeeze from them much above that. The shorts just don’t have the cash to pay beyond that.
But I’m not about to tell the 
s that on WSB.
Okay, here’s what I’m not sure about: was the stated goal of “hold to drive the price up until the hedge fund has to lose millions buying to cover their short” ever a realistic goal? Was it a mere excuse to execute a pump and dump?