Topic: Modern Day David V Goliath (Redditors v Hedgefunders)

[surfer. Fuck you generator.]

Thanks Surfer.

Well this is addressed to you or Babel Time. I want to open a basic trading account to put a few quid into an ISA but just to buy shares sensibly (so not penny stocks or any of the current stuff going on). Which platform/account would you recommend. Free would be preferable but any suggestions welcome from people who have a clue about these things.

Pm sent.

[Babel Time]

Why are you talking like there was some shadow group that planned this form the start and used reddit as some sort of astroturfing campaign to cause this? It's just disingenuous. I've been following this for months.

It literally started here. https://www.reddit.com/r/wallstreetbets/comments/d31bke/gme_yolo_update_following_the_q2_earnings_report/

A guy was investing in GME because he truly believed it was an undervalued stock that was due to rise. He was widely ridiculed for it for months and he kept true. Literally just lock at his posts history, people calling him retarded and telling him he'll lose everything for months on months. Overtime people saw what he was saying was coming to fruition, that along with the ridiculous short position these companions continued to call (they were only at like 70% short when he was investing) naturally snowballed and grew from there.

It's exploded recently and sure, people are pushing people to buy/hold for the squeeze, but again, it wasn't some sort of concerted effort by a "few instigators" to manipulate the market for their favour. It can be literally be tracked to be a organic play and growth until it really became a meme and took off.

In-fact, talking about manipulation, wanna know the real kicker? The event that truly kicked this off as a meme and started this effort to short squeeze was caused by the damn billionaire shorters themselves. Andrew Left, founder of Citron - a billion dollar investment group that had been publicly shorting and shitting on GameStop in the media - started a livestream to explain why "investing in GME would be a terrible idea and how the stuck is set to plunge to $20 in the coming days" - this is after months of media attacks on them. Just look at this tweet. https://twitter.com/CitronResearch/status/1351544479547760642. The day after that stream GME stock saw it's biggest rise yet, 50% in one night.

They're own attempt at manipulation of the market through shorting stock and shitting on companies in the media to reduce shareholders faith in that company backfired hard on them and was a big part in why this has taken off. Poetic, I say.

Am well aware of how it started. But what happened in January is the far flung from an obscure value strategy, and again a year ago that was a solid and good call. I have zero quarrels with that, as it was some good old fashioned value analysis. I'm talking about the discussions on reddit to push up the price and cause a short squeeze.

Citron a multi-billion dollar investment group? It's an equity research news letter - run by one person. Difficult to take anything you say seriously that, when you get something this basic so wrong, particularly in a way that makes it sound very a massive conspiracy.

A person saying they expect a stock price is going to drop is not market manipulation, particularly when it is his job is equity research analyst. It's called investment advice.

To sum up:
issuing a sell/short/underweight recommendation as an equity research analyst - not market manipulation
making a detailed post on reddit about a great value play - not market manipulation
shorting a stock (or currency or bond or any other asset) - not market manipulation

trying to convince others to join in to all try to artificially inflate the price and trigger a short squeeze - market manipulation

I'm just trying to get people here to steer clear of these shenanigans. Wonna invest in the markets, buy an index fund.

[Johnny Foreigner]

I had the pleasure of spending a couple of dinners with these sharks. Some defend them here but let them talk after a couple of the most expensive wines, pls do it again

[josh101]

Am well aware of how it started. But what happened in January is the far flung from an obscure value strategy, and again a year ago that was a solid and good call. I have zero quarrels with that, as it was some good old fashioned value analysis. I'm talking about the discussions on reddit to push up the price and cause a short squeeze.

Citron a multi-billion dollar investment group? It's an equity research news letter - run by one person. Difficult to take anything you say seriously that, when you get something this basic so wrong, particularly in a way that makes it sound very a massive conspiracy.

A person saying they expect a stock price is going to drop is not market manipulation, particularly when it is his job is equity research analyst. It's called investment advice.

To sum up:
issuing a sell/short/underweight recommendation as an equity research analyst - not market manipulation
making a detailed post on reddit about a great value play - not market manipulation
shorting a stock (or currency or bond or any other asset) - not market manipulation

trying to convince others to join in to all try to artificially inflate the price and trigger a short squeeze - market manipulation

I'm just trying to get people here to steer clear of these shenanigans. Wonna invest in the markets, buy an index fund.

Sorry I was confusing Citron with Melvin Capital - my bad.

I disagree with a few of your stands on market manipulation, but your underlying point of telling people to steer clear of investing in this I agree with it. Personally think it's topped out.

[Babel Time]

I had the pleasure of spending a couple of dinners with these sharks. Some defend them here but let them talk after a couple of the most expensive wines, pls do it again

Don't want to create the impression that I am defending hedge funds. Most of them do a much better job at enriching themselves than their clients.

I am just a little tired of all the clichés that get rolled out time and time again.

People watch shows like Industry and think people in finance are all gang of c*nts. We may have the largest share of them, but they are still the minority.

[Johnny Foreigner]

Don't want to create the impression that I am defending hedge funds. Most of them do a much better job at enriching themselves than their clients.

I am just a little tired of all the clichés that get rolled out time and time again.

People watch shows like Industry and think people in finance are all gang of c*nts. We may have the largest share of them, but they are still the minority.

Good points that and sorry if I came across too harsh.. I work with financers/bank people/auditors and I have to say I have few or any bad moments with a lot of hard working, decent and smart people. It's just the small minority that gets the headlines and money with uneven playing fields that annoys me a bit

[johnybarnes]

This is the guy who was at the forefront of the GameStop squeeze from reddit, believe he invested around 50k and has been up around 45 million, most of it unrealised profit.

https://youtu.be/GZTr1-Gp74U

Edit: His position at close today:

[Babel Time]

Now those are some nice "tendies".

Have to commend the self discipline, I would have cashed out multiple times before it reached those levels.

Minor correction: his initial outlay is $750k

[johnybarnes]

Now those are some nice "tendies".

Have to commend the self discipline, I would have cashed out multiple times before it reached those levels.

Minor correction: his initial outlay is $750k

Where did you get that figure from? In his very first post it shows 53k initial cost in the screenshot and he confirms that figure again in the comments when he responds to someone asking 'what the fuck made you drop 53k on Gamestop?'

Perhaps he bought more with profits but that was his starting investment.

[Butcher Knife Roberto]

The important thing to know about the guy holding those positions, the redditor known as DeepFuckingValue, is that he has held these for quite a while (I believe it's a couple of years but please correct me if I'm wrong). Anyway, he didn't just show up last week, this has been under the surface for a while and he was investing long in this. The bandwagon has obviously gone crazy, so I'm very curious as to when he decides he's had his fun and closes off.

[S]

So did anyone in here get on board with this? Be interesting to hear a first hand experience from someone actually invested in this crazy thing.

Late to this thread, so apologies if you’ve already talked about this a bunch.

[DJBrenton]

So did anyone in here get on board with this? Be interesting to hear a first hand experience from someone actually invested in this crazy thing.

Late to this thread, so apologies if you’ve already talked about this a bunch.

I got in late at just over $120.

[Brissyred]

So did anyone in here get on board with this? Be interesting to hear a first hand experience from someone actually invested in this crazy thing.

Late to this thread, so apologies if you’ve already talked about this a bunch.

My son has been a member of that sub reddit for years, he make $40k and got out, he said that's his house deposit sorted.

[Babel Time]

Where did you get that figure from? In his very first post it shows 53k initial cost in the screenshot and he confirms that figure again in the comments when he responds to someone asking 'what the fuck made you drop 53k on Gamestop?'

Perhaps he bought more with profits but that was his starting investment.

From the screenshot in your post, under total price paid.

He also seems to have 13m in cash, so that might be from closing his first buy in with the 53k you mentioned.

[OsirisMVZ]

Especially with being doxxed and having to come out to the public, he is def gonna be the main character in the movie/tv series they make on this in a couple of years time.

[killer-heels]

This is the guy who was at the forefront of the GameStop squeeze from reddit, believe he invested around 50k and has been up around 45 million, most of it unrealised profit.

https://youtu.be/GZTr1-Gp74U

Edit: His position at close today:

Amazing stuff. You would see an adult with a backwards cap and a T-shirt with a kitten on it and think this guy is a moron. Clearly not.

[Chakan]

So where does this end? Is it over?

[ianburns252]

Good points that and sorry if I came across too harsh.. I work with financers/bank people/auditors and I have to say I have few or any bad moments with a lot of hard working, decent and smart people. It's just the small minority that gets the headlines and money with uneven playing fields that annoys me a bit

Which auditors have you come across? We are a bunch who are, on a good day, as dull as dishwater.

I'm a pretty reasonable and measured guy, not one for drama, say whatever you want about bankers/financiers but I will not have you spreading vile rumours that any of us might be interesting people. Would qualify someone's audit report for less than that...or at the least an emphasis of matter statement.

[josh101]

And a large scale coordinated attempt to push up a price of a security tens of multiples above its intrinsic value is not manipulation?

If this was other Hedge Funds doing this rather than a bunch of redditors, they'd be whisked in front of the regulators quicker than you can say gamestonks.

Sure it has the lovely narrative of a pack of retail investors giving a hedge fund a bloody nose, but the collateral damage will be massive. All the suckers that pile on the hype train the hope of riches will get burnt big time. This is not how a healthy and well functioning market should look like.

When all is said and done you'll have a few people who made some big bucks and a lot more people who lost a lot.

You know what, after a couple days of further reading about this situation, I find myself coming back to this post and completely agreeing with your last points.

I still abhor the tactics that have been employed by certain organisations during all this, and disagree to an extent about the manipulation aspect on GME specifically, but the prevalence of the amount of people pushing shit like AMC, Doge etc for what is clearly a pump and dump for their own personal gain on the backs of others it's kind of painted this whole movement in a sour light to me.

[McrRed]

You know what, after a couple days of further reading about this situation, I find myself coming back to this post and completely agreeing with your last points.

I still abhor the tactics that have been employed by certain organisations during all this, and disagree to an extent about the manipulation aspect on GME specifically, but the prevalence of the amount of people pushing shit like AMC, Doge etc for what is clearly a pump and dump for their own personal gain on the backs of others it's kind of painted this whole movement in a sour light to me.

I don't understand the position against these small fish. There's no security for these guys whereas the hedge funds pull dick moves all year long and get protection all the way to government bailouts when they get it disastrously wrong. Interference with robin hood and the other "brokers" is criminal and I sincerely hope the class action lawsuits being filed are successful. But I won't hold my breath.

[Johnny Foreigner]

Which auditors have you come across? We are a bunch who are, on a good day, as dull as dishwater.

I'm a pretty reasonable and measured guy, not one for drama, say whatever you want about bankers/financiers but I will not have you spreading vile rumours that any of us might be interesting people. Would qualify someone's audit report for less than that...or at the least an emphasis of matter statement.

Can't compromize myself but just a small suggestion ! when it's casual friday or whatever; black suit, white shirt and dropping the tie is not casual; at least not when everybody comes looking the same. get the wild one to wear jeans ;-)

The one drink for dinner is a bit steep though !

[TepidT2O]

To be fair, they iron them with a crease .

[Johnny Foreigner]

You know what, after a couple days of further reading about this situation, I find myself coming back to this post and completely agreeing with your last points.

I still abhor the tactics that have been employed by certain organisations during all this, and disagree to an extent about the manipulation aspect on GME specifically, but the prevalence of the amount of people pushing shit like AMC, Doge etc for what is clearly a pump and dump for their own personal gain on the backs of others it's kind of painted this whole movement in a sour light to me.

At least the reddits play it on an open field and people know the risk.. the hedge funds and big guys operates in muddy waters and the average small "investor" doesn't know what is going on (some very dubious practices as well) and are just being milked.. There are stocks/companies with fundamental good numbers/operations that don't see any rise in share price, because the funds are playing them with the robots/algoritms.. market manipulation; my hairy backside..

[damomad]

I've followed WSB casually for a couple of years, in December every 2nd post was about GME. Was tempted myself but could never have foreseen anything like this.

I've no skin in the game but I feel a lot of people are going to get hurt this week, too late to the party. I suspect a hike on Monday so big that the early suitors will cash out, causing an annihilation.

[Johnny Foreigner]

I've followed WSB casually for a couple of years, in December every 2nd post was about GME. Was tempted myself but could never have foreseen anything like this.

I've no skin in the game but I feel a lot of people are going to get hurt this week, too late to the party. I suspect a hike on Monday so big that the early suitors will cash out, causing an annihilation.

I think the majority of the "rebels" have cashed in or are safe. The majority of the late-comers have put in the amount of a very good/late night out - and treat it like this.. If it flies the coming week; good profits - if it all goes down the drain; nahh

[RedSince86]

I read one guy on there yesterday on /WSB had 1480 shares worth just over $400k and said he wasn't selling, he was all in to bring down the hedge funds, this is a regular guy who would be set for years and not in it for the money but the cause.

[spen71]

Interesting read all this.    I’m hopefully going to be debt free in the next few months and then want to start investing £300 a month to build up something for retirement (no pension).   Any good reads?   A starting point?   I know sweet FA about this.     A shares ISA for the best?

[gazzalfc]

IG following the initial Robinhood route

https://www.bbc.co.uk/news/business-55871381

[josh101]

At least the reddits play it on an open field and people know the risk.. the hedge funds and big guys operates in muddy waters and the average small "investor" doesn't know what is going on (some very dubious practices as well) and are just being milked.. There are stocks/companies with fundamental good numbers/operations that don't see any rise in share price, because the funds are playing them with the robots/algoritms.. market manipulation; my hairy backside..

Yeah, I said I don't personally find it manipulation as such if a load of average joe's want to invest into a company and because of that it's value increases. I also find whats happening with GME specifically great. But I just agree with the fact that with these newer "investments" being touted such as AMC, BB and Dogecoin are definitely more of a pump and dump where the only people who are going to be hurting are the average retail client who is late to the party and gets in near the top.

It's already happened with Doge. The "craze" lasted a day. It's already down 50% just today and falling. People saw what happened with GME, believe that the only reason that happened was because it got popular and are trying to cause that effect with other investments that they actually got in to at a lower price. The logic behind GME is that because it's so shorted that as long as everyone can hold out it's the hedge funds that are going to bleed when they have to pay up. These others investments aren't the same as that, and the only people who are going to be bled are the people who get in at the top - naive retail clients.

[Schmidt]

Yeah, I said I don't personally find it manipulation as such if a load of average joe's want to invest into a company and because of that it's value increases. I also find whats happening with GME specifically great. But I just agree with the fact that with these newer "investments" being touted such as AMC, BB and Dogecoin are definitely more of a pump and dump where the only people who are going to be hurting are the average retail client who is late to the party and gets in near the top.

It's already happened with Doge. The "craze" lasted a day. It's already down 50% just today and falling. People saw what happened with GME, believe that the only reason that happened was because it got popular and are trying to cause that effect with other investments that they actually got in to at a lower price. The logic behind GME is that because it's so shorted that as long as everyone can hold out it's the hedge funds that are going to bleed when they have to pay up. These others investments aren't the same as that, and the only people who are going to be bled are the people who get in at the top - naive retail clients.

There are a lot of hedge fund people infiltrating WSB and trying to distract people with the "next" Gamestop, while the regular posters have been sticking to the opinion that there's no next anything, this is a one off event. It sounds like a conspiracy theory but while trying to decide whether to get involved I took a look at a lot of the accounts pushing AMC/NOK/Doge and the majority were either brand new accounts that were spamming the same posts over and over or old accounts that hadn't been used in months and were never active on WSB previously. Now a lot of these new accounts could just be people jumping on the hype train but it's definitely odd that they're pushing non-GME stocks most of the time.

If you go back to when DeepFuckingValue was buying his stock the short position wasn't even mentioned, it was all about stock that was undervalued and a good investment, though admittedly he was hoping it would jump to maybe $15 not $400+. The general line I'm seeing from the regulars has been consistent; they like the stock, don't invest anything you aren't comfortable losing and don't get distracted by people pushing other stocks for their own gains. The belief is that unlike a pump and dump where some win some lose, the short position means that everyone can gain if enough people stick with it.

All that said, I'm new to this so didn't buy in as I was late to the party and didn't want to get wrapped up in the hype as that usually doesn't end well.

[kloppismydad]

Interesting read all this.    I’m hopefully going to be debt free in the next few months and then want to start investing £300 a month to build up something for retirement (no pension).   Any good reads?   A starting point?   I know sweet FA about this.     A shares ISA for the best?

It depends on the amount of risk you want to take with your investments, how diversified you want to be, liquidity requirements, expected period of holding the amount, etc. I will suggest reaching out to a financial advisor to understand what investments will fit your profile.

I'm 30 yrs old and my personal investment basket looks as follows:

60% equity
20% ETFs
20% gold

I also switch investments based on my tax due for that particular year to minimise my tax outflows. Everyone has a different target, different risk profile and other things so it's best you seek advice from a financial advisor who can guide you accordingly.

[riismeister]

u/DeepFuckingValue gets a lot of credit (and deservedly so), but u/Jeffamazon deserves a shoutout too. Pretty much predicted what's happened this month all the way back in September of last year;

https://www.reddit.com/r/wallstreetbets/comments/ip6jnv/the_real_greatest_short_burn_of_the_century/

He even predicted the GameStop stock price would reach $400;




Also; Michael Burry's investment firm (the guy who shorted the US housing market in 2007 aka the plot of the film The Big Short) invested heavily in GameStop stocks in the first 3 quarters of 2020 and it was the biggest stock holding of the firm's entire portfolio by the end of Q3 2020.

[flemingcool]

Interesting read all this.    I’m hopefully going to be debt free in the next few months and then want to start investing £300 a month to build up something for retirement (no pension).   Any good reads?   A starting point?   I know sweet FA about this.     A shares ISA for the best?

Go to Monevator.com.  Great site for UK based investors, and an ideal place to start learning. 

[12C]

Mate 95% of it is just gambling except most of the time they're allowed the make up the rules and regulate themselves.

So it’s a bit like gambling then.
I’m old enough to recall the bookies getting hammered by a group of Irish punters who worked out that Cartmel racecourse was disconnected from the bookies cartel because there was no direct phone line. The basic premise was they slipped a ringer into a race. Bet heavily on it around the country, the bookies couldn’t tell Cartmel bookies to bring the price in, it romped home and the bookies refused to pay.
They went to court and the judge found in their favour on an obscure point but added a question, “would the the bookies have give back money if the horse hadn’t won?”

[Lotus Eater]

Email from the Robinhood team.
By the way, have just stated an ad campaign in the US:

We wanted to reach out to you after a transformative week in the markets to answer a question we know many of you are asking: “Why did Robinhood limit certain stocks?”

We understand that the temporary limits we placed on certain stocks this past week were frustrating for many, especially since we built Robinhood to expand access to investing. We have always sought to put our customers first and we want you to be able to invest on your own terms.

To help explain what happened and why we had to take action, we wrote a letter to our customers and captured the key understandings for you below:
For Robinhood to operate, we must meet clearinghouse deposit requirements to support customer trades.
Deposit requirements are determined in part by how much stock a firm’s customers hold. If a firm’s customers’ holdings are volatile, a broker (in this instance Robinhood) is obligated to meet higher deposit requirements.
Last week, in part due to volatility in some popular stocks, Robinhood’s deposit requirements rose tenfold. The combination of the deposit increase and the extraordinary increase in volume on these particular symbols led us to put temporary buying restrictions in place on a small number of those stocks.
We had to take steps to limit buying in those volatile stocks to ensure we could comfortably meet our deposit obligations. We didn’t want to stop people from buying stocks and we certainly weren’t trying to help hedge funds.
We hope you take away this: at Robinhood, we stand with everyday investors participating in the markets. Standing by our Robinhood community means being there for our customers through any trading environment. We’ll continue to improve as we break down barriers in the financial system to open it for all.

Thank you for being a part of the Robinhood community.
Sincerely,
The Robinhood Team

[eddymunster]

Email from the Robinhood team.
By the way, have just stated an ad campaign in the US:

We wanted to reach out to you after a transformative week in the markets to answer a question we know many of you are asking: “Why did Robinhood limit certain stocks?”

We understand that the temporary limits we placed on certain stocks this past week were frustrating for many, especially since we built Robinhood to expand access to investing. We have always sought to put our customers first and we want you to be able to invest on your own terms.

To help explain what happened and why we had to take action, we wrote a letter to our customers and captured the key understandings for you below:
For Robinhood to operate, we must meet clearinghouse deposit requirements to support customer trades.
Deposit requirements are determined in part by how much stock a firm’s customers hold. If a firm’s customers’ holdings are volatile, a broker (in this instance Robinhood) is obligated to meet higher deposit requirements.
Last week, in part due to volatility in some popular stocks, Robinhood’s deposit requirements rose tenfold. The combination of the deposit increase and the extraordinary increase in volume on these particular symbols led us to put temporary buying restrictions in place on a small number of those stocks.
We had to take steps to limit buying in those volatile stocks to ensure we could comfortably meet our deposit obligations. We didn’t want to stop people from buying stocks and we certainly weren’t trying to help hedge funds.
We hope you take away this: at Robinhood, we stand with everyday investors participating in the markets. Standing by our Robinhood community means being there for our customers through any trading environment. We’ll continue to improve as we break down barriers in the financial system to open it for all.

Thank you for being a part of the Robinhood community.
Sincerely,
The Robinhood Team

Any chance you could dumb this down for the hard of thinking?

Am I completely misunderstanding this or do these rules basically make the rich have a monopoly on "volatile" stock?

[Andy82lfc]

Any chance you could dumb this down for the hard of thinking?

‘We sided with the big boys and stoped retail buyers from buying so the price didn’t go up way more (which it would have done), this has ruined our reputation and we are now fucked a fair bit, especially with an IPO on the horizon... please now accept this wheelbarrow full of bullshit per person to swallow whole. It absolves us from any fault whatsoever and allows us to take your money again.’

[eddymunster]

‘We sided with the big boys and stoped retail buyers from buying so the price didn’t go up way more (which it would have done), this has ruined our reputation and we are now fucked a fair bit, especially with an IPO on the horizon... please now accept this wheelbarrow full of bullshit per person to swallow whole. It absolves us from any fault whatsoever and allows us to take your money again.’

Turns out I do speak "finantial bullshit" after all. Figured as much.

Reminds me of the Ryan Gosling quote from The Big Short

"Does it make you feel bored? Or stupid? Well, it’s supposed to. Wall Street loves to use confusing terms to make you think only they can do what they do. Or even better, for you to just leave them the fuck alone."

[johnybarnes]

From everything I've read and listened to and with my limited financial knowledge, it does seem that they run out of money/collateral - it has been a PR nightmare for them, most of which could have been alleviated if they were just honest from the start rather than cloaking all their language under 'protecting customers'.

https://youtu.be/j2Sk-_Xt06w - fairly simple video that breaks it down.

https://youtu.be/rWEPSKkkdKQ - interesting podcast involving tech billionaires/millionaires discussing the issues, including someone who invested in Robinhood.

[Andy82lfc]

Turns out I do speak "finantial bullshit" after all. Figured as much.

Reminds me of the Ryan Gosling quote from The Big Short

"Does it make you feel bored? Or stupid? Well, it’s supposed to. Wall Street loves to use confusing terms to make you think only they can do what they do. Or even better, for you to just leave them the fuck alone."

Indeed. Great film and very informative to how the banks pretty much do whatever they want. Not sure if the investors in the film were so surprised in real life at how fraudulent the system is as they worked inside it for years, but it was an eye opener for many.

It looks like the meme stocks may now be fading, GME is crashing down down, I hope for anyone who took risks it goes back up but looks like at this point everyone is cutting their losses. Wallstreetbets is becoming just an echo chamber now of denial and 'buy the dip' 'look at how low the price is going this is great, sale on lets buy more!' and a bit cultish now screaming down anyone who disagrees. I feel really sad for many who have lost out as with all these things many are sensible punts made but many also get caught up in the hype and put down far too much beyond what they can lose.