[HN Gopher] Chamath Palihapitiya on Wallstreetbets [audio]
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Chamath Palihapitiya on Wallstreetbets [audio]
Author : dave_aiello
Score : 91 points
Date : 2021-01-27 19:21 UTC (3 hours ago)
(HTM) web link (overcast.fm)
(TXT) w3m dump (overcast.fm)
| f430 wrote:
| Here's my comment I wrote earlier in my submission that was
| removed because it was a "dupe" (and I seem to have been
| throttled as a result of this transgression):
|
| I'm a bit of a centrist leaning to WSB:
|
| - I will agree the fundamentals are off. AMC, BB, GS compared to
| its industry competitors market cap and valuation doesn't make
| sense.
|
| - Counter to the above argument, it shows the cracks in the
| system: Many stocks are simply valued based on votes that
| traditionally has been in the favor of large institutional
| investors who are also guilty of market manipulation and closer,
| faster access to new information that the retail investors do not
| have.
|
| Overall, I am very worried that we are on the final stretch of
| the equity bubble that started as a result of the Feds printing
| money, buying up corporate debt, violating the US constitution.
| _We are witnessing a departure from fundamental valuation and
| straight into a manic stage_.
|
| - I disagree that retail investors have an edge in information
| rather that existing fundamental analysts employed by large firms
| _never had an edge at all_ and simply a mouthpiece for whatever
| price is desired by a select group of institutional hedge funds.
|
| TLDR: I am pleased the little guys are winning but also very
| worried that we are on the final manic phase of a classic equity
| bubble we've witnessed two decades ago.
|
| edit: _HN is throttling my comments after my CNBC video was
| removed for being a duplicate so to answer:_
| "Why is it different now we've been in a bubble for the past 5
| years"
|
| Take a look at the M3 supply
|
| https://fred.stlouisfed.org/series/MABMM301USM189S
|
| do you see that vertical line right at the beginning of 2020?
|
| that's what is different now. We are now in a bubble withi in a
| bubble.
| simantel wrote:
| People have been saying the everything bubble is about to pop
| for 5+ years. Why is now different?
| kcbigring wrote:
| pretty good arguments from both sides here and lots to learn;
| although, Chamath has many valid points he is also really good at
| skirting around some of the questions. hubris on both ends.
| paxys wrote:
| Wall Street is a large scale gambling operation with a public-
| backed safety net. Apparently they don't like it when people call
| this out. And they definitely hate it more when outsiders start
| beating them at their game.
| xadhominemx wrote:
| Nonsense
| thunkshift1 wrote:
| No, its not. Have you forgotten the bailouts already?
| bidirectional wrote:
| Which hedge funds received bailouts? This insistence on
| viewing Wall St as a monolithic entity is just asinine. I
| can assure you the investment bankers at Goldman are not
| losing any sleep over GameStop.
| briankelly wrote:
| It's pretty incestuous though. Mortgage backed security
| market got started at the Salomon Brothers before
| fumbling it to Morgan Stanley before GS ultimately
| decided when to pull the rug on it all. Citadel might not
| be a bank but market making is one of it's core functions
| much like them. Names might change but I bet many of the
| same players move between these firms.
| paxys wrote:
| Hedge funds didn't receive bailouts because they had all
| shorted the housing market. They instead made large
| profits while a large chunk of the country lost their
| jobs and homes.
|
| Meanwhile hundreds of banks and other financial
| institutions did get public funds. The state did not take
| any ownership, and some of them still haven't paid back
| billions. The profits generated since then - all directly
| due to the bailouts - have been private.
| xadhominemx wrote:
| The state did take ownership of entities that received
| direct bailouts - eg AIG, GM, Chrysler
| bidirectional wrote:
| 2008 was the worst year by far in the history of hedge
| funds, almost all lost money and hundreds of funds
| closed. They certainly did not all short the housing
| market, in fact there's several books and a Hollywood
| film about the few outsiders who did.
| xadhominemx wrote:
| Equity holders of defunct financial institutions were not
| bailed out in 2009. They suffered massive losses.
| paxys wrote:
| What about equity holders of hundreds of close-to-defunct
| financial institutions who were able to bounce back only
| due to government intervention?
| typon wrote:
| That's a slimy way of summarizing the situation
| xadhominemx wrote:
| Why?
| jnwatson wrote:
| Did you forget about AIG and Merrill Lynch? BoA was
| "strongly encouraged" to buy Merrill. And the Fed just
| loaned AIG a boatload of money. All the banks got loads
| of direct (via capital infusions) and indirect support
| (the "Fed put" on steroids).
|
| The owners of bank equity did fine while the working
| class got screwed. This is the environment the millenials
| started their investing opportunities in. That the game
| is rigged was made explicit early on in most millenials'
| investing career.
| supernintendo wrote:
| Sounds about right to me.
| dang wrote:
| Please don't post like this--it's against the site
| guidelines: https://news.ycombinator.com/newsguidelines.html
|
| If you feel that another comment is wrong, the way to respond
| is to show _how_ it 's wrong, include additional relevant
| information, and avoid name-calling. Then we can all keep
| learning (and also kick the can down the road a bit regarding
| the part where we degenerate into flaming spears and tribal
| warfare).
|
| I get that the GP comment was also a provocation without much
| information in it, but these things are matters of degree,
| and the right direction to go in response to provocation is
| exactly the opposite to the way your comment went.
| u678u wrote:
| > Apparently they don't like it when people call this out.
|
| Source? Clearly "they" dont like losing money but the rules are
| clear.
| curiousgal wrote:
| I think the funniest part of this entire phenomenon is that
| Robinhood is now taking money from the rich and distributing it
| to the masses in a more literal sense. At least for now.
|
| On a more serious note, I don't get how a stock can be 140%
| shorted. Does that mean once you return a portion of the shares
| you borrowed you have to rebuy part of it and return it again?
| Also when would these short sellers get margin called?
| xadhominemx wrote:
| Yea money is flowing from hedge funds who are short to retail
| investors as the stock runs up, but once it inevitably moves
| back down it will be the retail bag holders inflicted with
| massive losses.
| curiousgal wrote:
| Wouldn't the short sellers have to buy all of what they
| shorted from the retail investors?
| xadhominemx wrote:
| Short sellers cover their borrowed shares. They are not
| left with any stock after they close their trade.
| taylorwc wrote:
| Here's a pretty good explanation of that how that can happen:
| https://nope-its-lily.medium.com/gamestop-power-to-the-marke...
| curiousgal wrote:
| Well that paints a completely different picture!
| christophilus wrote:
| Chamath has the best take I've heard on it.
|
| The people in WSB do know they're playing a wildly risky game.
| They know it's wild. They know it's gambling. They know there
| will be bagholders. There were also plenty of savvy people on
| this early, understanding the bull case that Michael Burry
| pointed out and the potential for a short squeeze.
|
| It was the hedge funds who went _over 100%_ short who were
| foolish here, not the momentum trading WSB crowd who helped cause
| the squeeze.
|
| The interviewer and just about everyone else I've heard are
| missing the squeeze part of this. Yes, GME isn't worth $20+
| billion. But Volkswagen shouldn't have been the most valuable
| company in the world in 2008, but it was. Short squeezes are just
| part of the market. Good on WSB for piling in.
| in3d wrote:
| He didn't have any answer as to the fate of new bag holders he
| created with his tweet. That was irresponsible. His plan to make
| hedge funds disclose their positions daily as some kind of a
| solution to overleverage makes no sense whatsoever. And he's
| delusional about research skills of WSB posters as compared to
| Wall Street analysts.
| dralley wrote:
| I agree, it feels dishonest to start out by saying "where was
| that message in 2008?" and then within seconds "guess who was
| right about Tesla?".
|
| By that logic, Wall Street was "right" for _years_ , because
| housing prices just kept going up and up and up and up. This
| story didn't end yesterday, it's entirely possible that the
| Tesla shorts were "just premature" the same way that the people
| who started shorting the housing market in 2005 were premature
| (and took a beating during those years).
|
| And the praise for /r/wallstreetbets seems a bit excessive
| considering that by his own admission, he only just learned
| about them a couple of days ago. I don't know how much time
| he's spent there but I'm not sure that his read on the place is
| especially accurate.
| na85 wrote:
| >And he's delusional about research skills of WSB posters as
| compared to Wall Street analysts.
|
| Certainly there's a crowd on WSB that are just sheep, but there
| is a minority of WSB posters that produce quality research and
| analysis. The idea that Wall Street insiders are elite, a
| different breed, is mostly a myth. There are smart people
| working Wall St to be sure, but there are lots of smart people
| working elsewhere.
| tequila_shot wrote:
| um, I don't follow wsb, but based purely on what you said, you
| don't back your comments either. So much for taking the high-
| horse. Chamath at least has the$$ to show for.
| paulgb wrote:
| I anticipate ours won't be a popular opinion on here, because
| the whole "stick it to the man" narrative is tempting, but I
| have to agree. I listened in on a Clubhouse room today where
| people were teaching each other how to options trade and I
| couldn't help but think, these are the people, not Wall Street,
| who are going to be left holding the bag.
| pnathan wrote:
| > I listened in on a Clubhouse room today where people were
| teaching each other how to options trade
|
| oh no.
|
| that's really bad.
|
| Options is one of the really fast ways to lose your shirt. I
| mean, they are _known_ for that. I expect they were talking
| about doing it on margin too. :- /
| jgalt212 wrote:
| very true. I often think of Blackstone's mega home run trade
| with Hilton Hotels. They bought it at the wrong price at the
| wrong time (pre GFC). But someone, they were able to over-
| default on the debt and still retain control and when they
| ended up selling it was a huge home run for Blackstone. Of
| course, the original bond holders got the shaft.
| m8s wrote:
| I agree that he ignored a few important questions. There is the
| very real possibility (and it's more like a certainty) that
| regular people will join the bandwagon too late and get hurt.
| When hedge funds get hurt, they still have plenty of money to
| survive. When I see posts (although who knows if they are real)
| about putting your life savings on something like this, losing
| that money has very serious real-world implications.
|
| This all is certainly highlighting that these systems have been
| fundamentally unfair for a long time, but that doesn't mean
| that real people won't be hit hard financially as a result.
|
| I don't know, maybe I'm just far too conservative with my money
| to do something like this.
| briga wrote:
| I have a hard time feeling sorry for anyone who loses large
| amounts of money on risky gambling like this. Especially for
| anyone willing to put their entire life savings on the line--
| if it wasn't this they would find some other stupid way to
| lose all their money.
| metalliqaz wrote:
| a fool and his money...
| nemothekid wrote:
| > _He didn't have any answer as to fate of new bag holders he
| created with his tweet._
|
| I don't know what answer you expect him to give. Are you saying
| that people shouldn't be allowed to tweet their trades? Also
| it's ridiculous to think WSB isn't full of bagholders - I've
| seen people blow up their accounts on completely ridiculous
| trades they had researched on their own. Are you saying people
| shouldn't be allowed to make bad trades?
|
| Chamath answers the question correctly; the question you're
| asking implies that you don't think retail should be trusted to
| invest. If that's _truly_ what you think then say it proudly.
| [deleted]
| ummonk wrote:
| Given that the short interest continues to rise (I saw
| estimates > 200% of float) it is possible there will be very
| few people left holding the bag after most sell to shorters
| covering their positions.
| bostonsre wrote:
| The price will crash. No one knows when hype will die out and
| people will stop jumping on the bandwagon, but I'm sure those
| hedge funds that are covering their short positions aren't
| going to stick around for the fall.
| soperj wrote:
| Those hedge funds covering their short positions have
| already acknowledged their fall by covering. The whole
| point of the short is sticking around for the fall.
| daniel-thompson wrote:
| This makes no sense. The hedge funds that cover their
| shorts are the ones taking the fall; entering a short at
| $20 and exiting at $300 _is_ the fall.
| throw_nbvc1234 wrote:
| Aren't there going to be multiple falls here. The one you
| mentioned and when the stock falls back to its "real"
| value?
| superkuh wrote:
| >He didn't have any answer as to fate of new bag holders he
| created with his tweet.
|
| Perhaps, but like his response to this question pointed out:
| neither did wallstreet when they left the US population as bag
| holders for all their damage in the past (ie, 2008).
|
| Additionally, the only people left being bag holders here so
| far are the hedge fund (and their copycats) taking such an
| absurd short position.
| paulgb wrote:
| > Additionally, the only people left being bag holders here
| so far are the hedge fund
|
| "So far" is carrying a lot of weight here.
| polka_haunts_us wrote:
| As long as the price keeps going up, there's no bag to hold
| yet in this metaphor. We're still at the part of the heist
| where the vault is being emptied.
| paulgb wrote:
| Let me put it this way, if someone bought GME over the
| last few days and sold it at 3x what they paid, what
| fraction of that gain (on average) came from a hedge fund
| covering a short vs. from another retail investor buying
| in? The assumption seems to be that it comes purely from
| a short cover but that's not at all obvious to me.
| polka_haunts_us wrote:
| I agree. The holding the bag metaphor comes from a gang
| of thieves robbing a place and then leaving a patsy
| behind with all the evidence of the crime and none of the
| loot. Right now, in my opinion, a lot of the Robinhood
| faction of the gang are funneling into the vault thinking
| Joe Wallstreet is that patsy, not realizing that the
| savvy senior members bailed out an hour ago and the cops
| are about 2 blocks over and closing. There doesn't have
| to be just one patsy after all.
|
| The whole metaphor discounts the "I just want the
| shortsellers to burn b/c anarchy" aspect that some people
| are claiming, which honestly I think is believed by very
| few and projected onto many more who really just want
| quick money.
| paulgb wrote:
| Yep, we're on the same page. Well put.
| runawaybottle wrote:
| Or to further add to your point, we literally have frothy
| equities because we had to print our way out of the last
| debacle.
|
| They are complaining about a necessary situation they created
| lol. We _need_ to stimulate investment to get out of the last
| crisis (that was the plan all along). What are these cats
| complaining about?
| baryphonic wrote:
| > He didn't have any answer as to the fate of new bag holders
| he created with his tweet. That was irresponsible.
|
| I have to say up front, I find this kind of attitude incredibly
| infantilizing and condescending.
|
| Exactly how many "bag holders" did Chamath "create"? (Hint:
| Zero.) Obviously the "bag holders" are assuming the risks
| themselves, as is (absent any evidence to the contrary)
| Chamath. They're on a forum literally called "Wall Street
| _BETS_ " (emphasis mine). If a millionaire announces he's
| playing the slots and subsequently wins the jackpot, is he
| "responsible" for everyone else who subsequently plays slots?
|
| (He didn't make this argument as well as he could have, but
| Chamath himself points out that when Goldman or AIG played
| stupid games, everyone else was conscripted into being the "bag
| holders.")
|
| Also, exactly how many people are we even saying Chamath
| _influenced_? How many people were undecided about making the
| GME trade and then said, "welp, Chamath is long so YOLOOOOO?"
| And how many of these people traded irresponsibly (e.g.
| overleveraged, invested their life savings)? I would bet the
| number is small, even negligible.
|
| > His plan to make hedge funds disclose their positions daily
| as some kind of a solution to overleverage makes no sense
| whatsoever.
|
| Correct me if I'm wrong, but I don't think he ever proposed
| this as some sort of affirmative plan. What I heard was him
| pointing out the asymmetry of which entities are
| required/voluntarily publish their positions. If hedge funds
| had done that, the 136% thing would never have happened for
| obvious reasons. I interpreted it more as a response to the
| interviewer's pearl clutching about the market having no
| "integrity" because a stock price deviated from the
| "fundamentals" for a time under some bizarre circumstances.
|
| > And he's delusional about research skills of WSB posters as
| compared to Wall Street analysts.
|
| If you're correct, then you can easily show us your short
| positions contra WSB research/herd
| mentality/irrationality/<pejorative> and we can track how well
| you end up compared to WSB.
| elliekelly wrote:
| > And he's delusional about research skills of WSB posters as
| compared to Wall Street analysts.
|
| I think it's a mistake to take his comments as applying to WSB
| as a whole. I agree WSB posters, collectively, are mostly
| clueless. But there are absolutely people in there who know
| what they're doing and have put a lot of thought into their
| strategy.
| systemvoltage wrote:
| I disagree with Chamath's take. Chamath sounds intelligent but
| it's misplaced. It's like analyzing Black Friday stampedes with
| the rationality of product quality assessment, better customer
| service, and overall better shopping experience. No. That's not
| why these people are rushing in. Black Friday stampedes are a
| cascading phenomenon of FOMO + price trickery. It's a giant mob
| with irrational behavior. Let's not polish it too much. WSB is a
| cesspool (even after sterilizing it) of awful logic and herd
| thinking. The real losers are going to be average Joe's who
| jumped into this with their Robinhood accounts and got their
| savings wiped out.
|
| Chamath, Naval, Elon etc all belong to the narrative of
| decentralization and crypto with their own vested interests. Just
| the other day I was listening to Naval's interview with a New
| Zealand media house - dude is literally urging people to buy
| Bitcoin.
|
| Unrelated, but I'm going full bonds/cash after seeing the
| insanity today's market is, not just GME but look at TSLA, etc. I
| can stay irrational longer.
| runawaybottle wrote:
| It's really not a cesspool. Outside of the frenzy, they do a
| solid job (when things are quiet) of finding cheap stocks with
| a potential to move within a year.
|
| Even GME, before the phenomenon, the subreddit was mostly
| targeting 40 dollars around April earnings. The short squeeze
| was a real tactical play, but most people weren't 100% on that
| as the main catalyst (as in, most people really thought the
| ps5/Xbox sales would be realized at earnings time beyond the
| ridiculous short position of bankruptcy).
|
| It's a pretty sensible subreddit.
| systemvoltage wrote:
| I've been following it for 7-8 years now. Lots great DDs that
| didn't turn out as well. After sterilization (ignoring 99% of
| the nonsense comments), I just see more guess work than
| anything else. Before GME, there was RiteAid, we all know how
| that panned out.
| tmotwu wrote:
| Even Wall Street has losers, of course not every DD will
| touch gold. People in a forum like HN would ought to know
| Wall Street has been gamified for the longest time. People
| will gamble irregardless if they do so on the stock market
| or not. The people calculated enough to make money knows
| the sort of risk they are taking. The earth continues the
| spin - the only difference is that some retail investors
| having started taking note of what has been happening and
| are capitalizing on it. Chamath or Elon and their vested
| interests are irrelevant - backing democratization or
| individual investors isn't a bad thing.
| runawaybottle wrote:
| So we can't knock a community for throwing ideas out there.
| I've gotten ideas from WSB that have led me to other ideas.
| It's an alright subreddit, but to disparage them as
| dumbasses is a little much (they do enough of that to
| themselves as is).
| systemvoltage wrote:
| No doubt, there is some good stuff in there as well. A
| few DDs are very in-depth and surprisingly good. I don't
| think the whole subreddit is like that.
| cinntaile wrote:
| Does DD stand for Deep Dive or what does it stand for?
| jyrkesh wrote:
| "Due diligence". It used both as a tag for posts that try
| to give real analysis, as well as a meme to describe
| terrible or humorous logic for making trades (e.g. "DPZ
| DD: everyone at this party just agreed that Dominoes
| Pizza is the best pizza, go long DPZ", stupid stuff like
| that).
| segmondy wrote:
| So it's a cesspool and yet you have followed it for 7-8yrs?
| Please! It definitely has amazing value for you to follow
| it for 7-8yrs, there are few things that I have used for
| 7-8yrs. I have been following it since last year and it's
| amazing. Sure, you have to dig out the gem, but it's like
| mining for gold or diamond. Gotta do the work.
| jyrkesh wrote:
| Yeah, and there was also TSLA and AMD and MU and others
| that did great.
|
| The point is that they actually write out real
| strategies/positions as "DD", and you can make your own
| decisions.
| [deleted]
| pnathan wrote:
| Yeah, periodically I've puttered over to WSB and looked around.
| It's not a shining jewel of analysis on a normal day. Right,
| now it's a pure stampeding herd of FOMO with metaphorical taxi
| drivers giving stock tips. Which is pretty canonical bubble
| material.
|
| I think _some_ of the fundamental analysis on WSB is sound, but
| doesn 't support the existing valuation. The "short squeeze"
| play is interesting, but I don't have access to the ticker and
| book to read the details on what is actually going on. It's
| stampede material.
|
| Sure, I've got a little in AMC/GME, but even if we, ahem, "go
| to the moon", because, eh, why not, it's a fraction of a
| fraction of my net, why not pick up a few bucks on the side. =)
|
| The vast bulk of my investments are perking along in Vanguard
| index mutuals and will not even notice GME.
| dave_aiello wrote:
| Here is a link to the audio podcast version of CNBC's "The
| Halftime" report. The link puts you 11 minutes into the show,
| where the interview with Chamath Palihapitiya begins.
|
| Palihapitiya is a regular guest on this show, but was invited to
| appear today because of the extraordinary price action in the
| common stocks of GameStop ($GME) and AMC Entertainment ($AMC)
| resulting from short squeezes on each stock.
|
| The remarkable thing about what Palihapitiya says is that he
| criticizes the institutional investment community which operates
| hedge funds who use excessive leverage to bet against small
| investors who-- in this case-- have bet that the stock is
| oversold.
|
| At one point today 140% of the total number of shares of $GME
| stock had been shorted (meaning it was borrowed and sold to
| others, with the expectation that the investors who borrowed the
| stock would be able to buy the stock back as shares of $GME fell
| from inflated levels).
|
| The interview makes extensive reference to the /r/wallstreetbets,
| https://www.reddit.com/r/wallstreetbets, subreddit and
| constructive analysis of the trade setups for these stocks.
|
| According to a related CNBC article,
| https://www.cnbc.com/2021/01/27/chamath-palihapitiya-closes-...:
|
| "Instead of having 'idea dinners' or quiet whispered
| conversations amongst hedge funds in the Hamptons these kids have
| the courage to do it transparently in a forum," he said. "What it
| proves is this retail [investor] phenomenon is here to stay.
| There are 2.7 million people inside wallstreetbets. I think they
| are as important as any hedge or collection of hedge funds."
|
| "Palihapitiya claimed the best research on stocks done by retail
| investors inside wallstreetbets is nearly indistinguishable from
| the best research on Wall Street. "That edge is gone. Now all of
| a sudden, retail can be on the same footing and they don't have
| to be the 'bag-holder' to Wall Street."
|
| I think a lot of people in this community will be interested in
| the idea that members of a subreddit can compete with
| institutional investors when the institutional investors' theses
| about a stock are either incorrect or so crowded that almost no
| one can make money trading with the institutional investors'
| strategy.
| chovybizzass wrote:
| Best interview on boomer network ever. $AMC
| dave_aiello wrote:
| I thought it was incredible.
|
| At one point Palihapitiya criticized CNBC host Scott Wopner
| for defending the way things have always been done on Wall
| Street at the expense of the Robinhood investment crowd.
| Palihapitiya argues that the Robinhood crowd, the
| /r/wallstreetbets subscribers, should win and the
| institutional investment community should lose when the
| "smart money" gets the trade this wrong.
|
| I agree with him.
| IkmoIkmo wrote:
| What I don't get is that, if this trade (140% short) was really
| so obviously wrong. Could a wealthy hedge fund not simply have
| made the same bet as the million strong WSB army, but even more
| pronounced? Why isn't a Carl Icahn short squeezing these guys if
| it's so easy and obvious? Simply buying calls and buying stocks
| and forcing a short squeeze, could a bigger established fund have
| made this bet?
|
| I think the general answer would be no, because at the end this
| fund would be a bagholder of $350 stock that's worth about $30,
| and when trying to get rid of it the price would crash down.
|
| My question then is, how are we somehow thinking that WSB doesn't
| have the same problem? The only issue is that the bagholders will
| be retail. It's being played off like some giant win to WSB. When
| really, those who have closed their positions have won, probably
| a select few. There's probably a lot more that are bagholders
| who're yet to feel the pain, which inevitably comes as everyone
| agrees that outside of the temporary short squeeze, this stock is
| not worth much more than $30.
| Ataraxy wrote:
| They realistically are. It's pure media fiction (and
| scapegoating) that a bunch of regular people are somehow moving
| markets. In practice they're just the smoke screen for the
| actual wealth making plays against their peers that screwed up
| in this scenario.
| 99_00 wrote:
| What is the single, most persuasive argument against
| Wallstreetbets?
| hnburnsy wrote:
| Anyone remember Iomega and zip drives? This same thing happened
| iomega stock price which was driven up by Yahoo message
| boards/Motley Fool.
|
| "At the close of trading Wednesday, Utah-based Iomega was worth
| more than Hershey Foods and had twice the market value of Apple
| Computer."
|
| https://www.deseret.com/1996/5/23/19244215/fools-rush-in-sen...
| ibraheemdev wrote:
| Is it likely that Chamath's "antics" lately have been to fuel his
| CA governor campaign?
| sirffuzzylogik wrote:
| > Social Capital's Chamath Palihapitiya jumped into the
| controversial name, saying in a Tuesday tweet that he bought
| GameStop call options betting the stock will go higher. His tweet
| seemed to intensify the rally in the previous session. The stock
| ended the day 92% higher at $147.98.
|
| This is growing into a bigger problem. The thought of Twitter
| influencers (example with E. Musk / Etsy, yesterday [1]) heavily
| moving the value of stocks with a simple tweet is not really
| reassuring. The SEC should start investigating properly into it,
| from personal benefits to bigger company wide fraud, the
| regulators need to act before this is the new norm.
|
| [1] https://edition.cnn.com/2021/01/26/investing/elon-musk-
| etsy-...
| trhway wrote:
| to me it looks like a virtual "Occupy WallStreet". To scare and
| make squeal the fat hedge funds shorts. Kind of fun. It wouldn't
| last for long, though the shorts will probably be looking over
| their shoulders for years to come. The movement's rank-and-file
| will probably get hurt while the leaders will probably do fine.
| "Investing" is just not an applicable term here - i mean you
| aren't investing buying a ticket for rollercoaster ride, you're
| buying fun and amusement. Or a chance to make your voice and
| discontent heard. At least that is what seems to be sold to the
| rank-and-file.
|
| Old school view here would probably see classic "pump-and-dump"
| by the few "leaders" who incited that frenzy. SEC though seems to
| lag far behind in understanding and dealing with the power of
| social media.
|
| (Anyway, thanks for the surprisingly nice AMC ride, i happened to
| have a bit in a gamble that they would survive the lockdown. )
| runawaybottle wrote:
| I really thought this was a good articulation on Chamath's part
| and would love HN to chime in with their perspective.
|
| Edit: Couple of stand-out comments he made, paraphrasing:
|
| 'The best wsb due diligence can be indistinguishable from top
| hedge fund due diligence, the funds don't have an edge'.
|
| Right. It doesn't take a genius to know GameStop will have a hard
| time in a cd-less world and full digital download marketplace. It
| _also_ doesn't take a genius to know GameStop will not go to
| _zero_ dollars (so don't short to that level).
|
| Love the defense of the intellect of the retail investor and a
| group that doesn't need to be coddled, great defense against the
| patronizing and condescending suggestions.
|
| Second edit: Jim Cramer recently peddled Raytheon's earnings up.
| I'm not a genius but they got the earnings from laying off 16k
| people. Ok, how many quarters can you do that for? This is a play
| someone can consider (in either direction). We've got brains I
| think too.
| xadhominemx wrote:
| Why couldn't game stop equity go to zero? Equity is just the
| least senior claim on assets, it goes to zero all the time.
| piker wrote:
| Exactly. The parent is representing the kind of retail
| thinking that gets wiped out in the dust of events like this.
| Layke1123 wrote:
| He is exactly right. The powers that be (dark money) have long
| sought to remain in control of their subjects. Just because we
| don't have monarchies doesn't mean we don't have a few elite
| who few themselves as rightful directors and owners other all
| things on Earth.
|
| They have manipulated markets through various institutions and
| making knowledge so hard to come by without going into massive
| debt in order to maintain their elevated status.
|
| In their arrogance though, they thought they could reverse the
| trend of the democratization of their power to the masses, and
| have literally tried to move heaven and earth in order to
| remain in power and reverse the trend.
|
| My curious position is I think they are realizing that the
| trend is irreversible, that power eventually will always
| diffuse to the masses eventually as no system is perfect, there
| will always be leaky abstractions, and I have no doubt they
| have a nuclear option in their back pockets to try and quell
| the massive shift of power that seems inevitable at this point.
| Question is, what is that nuclear option?
| f430 wrote:
| SEC is apparently now investigating. If they take the side of
| hedge funds then there's going to be another occupy wall
| street movement, this time with millions of pissed off
| retailers, robin hood, ready to take class action lawsuits.
| breck wrote:
| I watched this after seeing it called "a must watch"
|
| https://twitter.com/rsg/status/1354513379529027584
|
| And definitely agree. The other famous Chamath video was also
| great, but this one was just fantastic. Spot on with what's going
| on.
|
| I also took notes on how effective it can be to remain cool as a
| cucumber and calmly explain a fundamentally sound mathematical
| position against an emotional attack.
|
| Note: I also wouldn't be surprised if some smart folks on Wall
| Street are now doing a clever counterattack where they are going
| long momentum and the short is a decoy, and then will pull the
| long profits and then also profit on the short. So I think smart
| Wall Street money will profit off this more than average retail,
| but no one will make out better than that reddit user who started
| the whole thing (forget their name)
| runawaybottle wrote:
| Yeah, felt inspired and compelled enough to get some discussion
| on this going here.
| xwdv wrote:
| The part about transparency and speaking openly really struck a
| chord with me. Every time I have tried to be transparent about
| investing and speculation here on HN I've been shot down with
| downvotes, despite that anyone following my advice over the years
| would have made massive amounts of money. I think people just get
| scared when you talk about money so openly.
| nceqs3 wrote:
| The Chamath Craze is ridiculous. The guy is a stock promoter
| through and through. It's really sad to see people fall into this
| guys trap.
|
| He has an incredibly story (coming from nothing) but lets look at
| his career:
|
| He "leaves" (aka fired) Facebook for being a D*ck head. Nobody is
| willing to work with him because he is rude and a jerk. His
| direct reports would cry regularly. Steven Levy talked about this
| in his book on Facebook.
|
| He starts a VC fund. The fund has no "major" wins. For a guy
| writing checks in 2011 he didn't get any of the big wins. The VC
| fund literally "burns down" as Axios put it because he divorced
| his wife and was chasing a girl in Italy rather than being in the
| office.
|
| Now he SPACs worthless companies selling them off to retail
| traders who think he is Warren Buffett. He is a salesman. The guy
| is on CNBC every other day.
|
| I get the "holding truth to power" narrative is attractive but
| Chamath is not our saviour. I would argue he is just as bad as
| any other hedge fund manager. Taking advantage of retail
| investors.
|
| Chamath talking about protecting the little guy is like Steve
| Cohen talking about respecting securities laws.
| [deleted]
| 99_00 wrote:
| Just to be clear, you aren't disagreeing with the argument he
| is making in this clip? Correct?
| nceqs3 wrote:
| Yes, I am pretty pro WSB just like chamath. I think he is
| wrong about the "research" that is happening though. There is
| a bull case but not a $25 bil mkt cap one.
| paxys wrote:
| Chamath's comment was that there is a lot of great market
| analysis happening on WSB every day, on par with that of
| large hedge funds, so it isn't wise to treat the forum as
| just a joke. The interviewer twisted that into him saying
| that WSB thinks $350 is the correct price for GameStop. No
| one - least of all WSB - thinks that. This is purely a play
| for squeezing the shorts.
| dentemple wrote:
| >The Chamath Craze is ridiculous.
|
| It helps that there aren't very many big names with airplay in
| the media right now that aren't being ridiculously biased
| against WSB here.
| trianglem wrote:
| "No major wins"
|
| >Comes from nothing
|
| >is a billionaire
| paxys wrote:
| > You can't voice any controversial opinion anymore on this
| site.
|
| You clearly can, considering your comment hasn't been removed.
| Why do you think your opinion deserves to be on the top of the
| page over anyone else's?
| dang wrote:
| Same interview on YouTube:
| https://www.youtube.com/watch?v=2h7jfNpL4QA (via
| https://news.ycombinator.com/item?id=25933380, now merged
| hither).
|
| The stack on this story so far:
|
| https://news.ycombinator.com/item?id=25932598 <--
|
| https://news.ycombinator.com/item?id=25904779 2 days ago
|
| https://news.ycombinator.com/item?id=25908084 2 days ago
|
| https://news.ycombinator.com/item?id=25868680 5 days ago
|
| Edit: This story is breaking my stack metaphor, and a graph
| metaphor would be too complicated.
|
| These are all significant threads with interesting articles that
| are different enough from each other that I don't think we'll
| merge them:
|
| https://news.ycombinator.com/item?id=25930214 ("GameStop Is Rage
| Against the Financial Machine") <-- currently on the front page
|
| https://news.ycombinator.com/item?id=25930488 ("How
| r/WallStreetBets gamed the stock of GameStop")
|
| https://news.ycombinator.com/item?id=25929443 ("Robinhood,
| Trading 212 and others go down amid AMC and GameStop stock
| frenzy")
|
| https://news.ycombinator.com/item?id=25929110 ("GameStop Opened
| at $300+ Today") - not an interesting article but the thread is
| better
|
| https://news.ycombinator.com/item?id=25926953 ("The GameStop
| Fiasco Proves We're in a 'Meme Stock' Bubble")
|
| https://news.ycombinator.com/item?id=25927254 ("GameStop Short-
| Sellers Reload Bets After $6B Loss")
|
| Edit 2: these just in:
|
| https://news.ycombinator.com/item?id=25934186 ("Nasdaq says they
| will halt trading if a stock has unusual social media chatter")
|
| https://news.ycombinator.com/item?id=25933581 ("GameStop Mania
| Reveals Power Shift on Wall Street")
| kevindeasis wrote:
| Hey Dang, Thank you for this. How do you remember how to find
| the linkts to these posts real fast? Did you just had a
| bookmark on these?
| dang wrote:
| I just used HN Search and wasn't particularly fast.
| panabee wrote:
| thanks for organizing these lists and keeping HN great.
|
| have you considered open-sourcing parts of HN so the
| community could create features to automate menial tasks
| like this?
|
| this could free up your valuable time for other things.
| TeMPOraL wrote:
| > _Edit: This story is breaking my stack metaphor, and a graph
| metaphor would be too complicated._
|
| Would it be too complicated, or do we lack the tooling to
| visualize it properly? :). Graphs are good.
| ibraheemdev wrote:
| The youtube video has been blocked:
|
| > This video contains content from NBC Universal, who has
| blocked it on copyright grounds.
| [deleted]
| electriclove wrote:
| Wow, anyone else irritated by the interviewer and his bias?
| epistasis wrote:
| Not a huge Chamath fan, but holy crap does destroy these utterly
| worthless CNBC questions.
|
| > "It doesn't mean that the investors that were short the stock
| were fundamentally wrong" - at around 28:00
|
| Did he not hear that 136% of the shares were short? Anybody,
| LITERALLY ANYBODY who shorted past 100% deserves to lose
| everything. It's fundamentally stupid and fundamentally wrong.
| The shorts are not getting screwed, they deserve what they get
| from this.
|
| Then he goes on to retail investors being the ones who are
| sometimes going to get hurt?
|
| How did such terrible, poor, awful analysis get a position on TV?
| If he had any point, he never ever made it.
| UncleMeat wrote:
| But it isn't different to be the one who shorted past 100% and
| to be the one who shorted earlier when other people shorted
| past 100%.
| epistasis wrote:
| The short positions were at huge multiples of float for a
| long long long time before the stock price started to rise,
| allowing them to unwind their short position, no? This is not
| a new, sudden situation, it's been planned for a long long
| long time.
| soybean wrote:
| one of us!
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