@gracchus has given an excellent explanation of the system involved in this current issue in the market.
Here’s another with a few more details from Alexis Goldstein: https://marketsweekly.ghost.io/what-happened-with-gamestop/
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Nice analogy. He reminds me though of Capt. Renault of Casablanca, and is shocked - SHOCKED - to learn that people are not basing their stock trades on a company’s fundamentals.
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Funny how Tesla’s or Uber’s or Amazon’s (back when it was loading up losses to eat the competition) never did.
Billionaires are a luxury the world can’t afford.
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It’s truly the Bazaar vs the Cathedral at this point. And I hate quoting techno libertarians but their analogy fits so well to this conflict.
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And how is what they are doing different to any investment group?
As far as I can see the only difference is that they haven’t organised themselves via a recognised form of business vehicle. If they had set up a limited partnership or limited company, they’d be just another hedge fund.
ETA: I suppose the openness of the discussions is a difference. I’m sure there are plenty of people who would pay very good money to have that kind of access to say, the fund allocation discussions at Berkshire Hathaway, so yeah, there is that.
But the investment platform has far better data on what its users are actually doing rather than what a bunch of people say they’re going to do. And since they have no difficulty in letting others make money on the basis of that data…
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I knew a guy from my ancap days that was a day trader. He told me he lost money for at least six months starting out. He always emphasized to people who wanted to start out that they must accept losses until they figure out a strategy based on chart reading or whatever they found useful. Then they’ll start to make money. There’s really no science as there is an art to this. It’s funny how much stock brokers also read charts so it becomes a game of who’s going to accept the trend first on the dip and less about any actual understanding of the commodities or corporate bonds traded.
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There is something circular in chart reading or technical analysis.
Why does chart reading work?
Because people trade based on charts.
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Capitalist zealots NEVER EVER EVER want to be on the short end of capitalism. Indeed they never want to even acknowledge the shortcomings of their worldview as long as OTHER people suffer. But when The Poors figure it out and beat them at their own game it’s suddenly an outrage and “how dare they” and “there oughtta be a law”.
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That’s it. That’s all of it. That’s the beginning and end of this.
“Do as I say, not as I do.”
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It’s only when non-one-percenters do it (and when it hurts the one-percenters) that it suddenly becomes a catastrophe that must be stopped.
Someone has to explain to me how the current vogue of high-frequency trading (HFT) is legal and/or possible and/or is in any way explainable as “fair trading.”
A HFT operation executes thousands of trades a second on a particular stock, gnawing away tenths of a penny each time, for all stocks their algorithm says to trade on. They obviously pay no transaction cost for all these microtransactions, whereas a regular investor has to pay $5 or $10 per trade. All regular investors are systematically being gipped by the HFTs.
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Thanks for the investment advice. I went ahead and asked my bank here in Japan and it turns out that they do offer index funds (for both domestic and foreign markets) at about 0.5% in fees per year. Plus, the Japanese government has a program called NISA that allows me to invest 1.2M Yen (about 12,000 dollars) per year and have it not be taxed. I am definitely getting in on this. Sorry for the off-topic, but I really do appreciate the advice!
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