ButchPlz
We do a little trollin'
- Joined
- Aug 27, 2014
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I'm not a "stock hound" but I'm retired, have a decent, but managed, portfolio and some "play money" if I wish. I usually don't wish.
My concern with this "short squeeze" phenomena is not these rogue and mostly "herd following" Reddit folks but the possibility this is a blueprint for far more savvy and sinister and better capitalized players to disrupt worldwide markets.
I'm not a fan of heavy market regulation but I believe stable markets are vital to the US and the world for currency stability and social stability.
Do those of you with far better knowledge of this area think the possibility of a concerted disruption of worldwide market practices by the Chinese or Middle Eastern interests is a threat? Thanks.
If a bunch of rubes on reddit (including myself) can cause this 'disruption', it's always been possible. What I'd ask instead is- have there already been disruptions caused?
I'm not versed in stocks or financial markets, but my job is to know very well foundational economics, business, and to an extent global affairs. It's also to know how to start looking below the surface at things. Here are things I am considering, and my thoughts on them are why I am A-OK with this 'disruption' happening. These are a little disorganized and maybe repetitive but I want to word vomit a bit.
1) shorts- think about them. It's when a fund borrows shares, sells them, then pays back the shares at a later date to whoever they borrowed them from. They have a direct incentive to reduce the share price in the interim period so they can pay back the shares while keeping more money. Look at companies that keep getting shorted- it doesn't matter if they have good ideas, it doesn't matter so much if us regular people are excited about them and want to invest in them on those ideas; their stock success will be directly influenced by people that have a vested interest in their share price not improving. If you don't think these hedge funds do what they can to send market signals to drive prices down, I've got news for you. That's not a free market.
2) you'll be told that these shorts are a 'protection' to keep us normal doofuses from bankrupting ourselves on the market. I'm very much hands-off- let us do what we want, that's a free market. There is risk in a free market! I don't care much for this line of thought.
3) we're watching a situation where obviously GameStop isn't worth $300-400/share. The reality is totally disconnected from the stock market, and that's just been proven beyond a doubt for everyone. I think that shows the extent to which manipulation can occur and probably does occur.
4) ask yourself the backgrounds of these firms influencing the market. We've got a certain small group, often linked in...certain ways... that are the loudest about this being an issue. They have had the power to set the attitudes around companies listed on the market for forever. Is it any different if this group manipulates it compared to Russians, or Middle Easterners, or Chinese? And do you really think those last groups aren't already in on the game?
5) the only reason this is making noise is because a bunch of regular people are exposing the shitshow. There's no other reason. People doing illegal things and intentionally damaging hard working people and long-term believers/investors in the companies they short are getting hammered. I don't give a flying rip about a crying billionaire on TV. I care about the people working to turn the company around, and appreciate that they're going to be getting more power back.