There's a class of weasel which doesn't get a borrow on the stock before entering into a short sale. A subset closes out their positions at the end of the day.
Jim Cramer was berating Lee Cooperman on CNBC back in March -- Lee wanted stricter enforcement of the rules. For my money, CNBC is part of the problem.
Is there such a thing / problem as too much Liquidity?
Yes, sadly I agree a bit. They are fanning the flames.
Don't look now, but Gamestop down another 37%. I could wait for an uptick and naked short a block of shares, but I know that the money I would make (and this is a sure thing) would come from the hands of a group of kids who really believed it was going to go to 1000, making me no better than some of the vermin that cause the problem in the first place.
I had a friend always say " There are three for sure things in life, Death, Taxes and a Stewardess" I can now add Gamestop Naked Short Gains to his list.
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I think there is a problem with too much excitement.
CNBC is just one of many flame fanners who make money out of stirring wishful thinking and urgency. It is very easy for some to get swept up in it all and they end up losing.
I think Buffet said he had worked in Wall Street at one point, and he found the environment too full of exuberance and opportunities; it was a distraction from keeping focus on the important things. So we are wise to remember, there is a huge, huge industry whose sole purpose is to generate trading fees, and the motivation to get as many people making trades as often as possible is also huge, no matter how much dishonesty is required.
Jim Cramer! If one could distill everything that is bad about Wall St. Into a single human being, it would be Cramer.
He (Cramer) lives the next town over from our NJ house. I don't think his reputation as an arb or HF manager bears up to any scrutiny whatsoever.
Gasparino, however, is the worst. Wall Street's new answer to Sacco and Venzetti, a tool of the weasels -- last March he got a stern talking to when the muni bond market was in turmoil because of RONA. In 2007 he poured gasoline on the fire in the bank and investment houses.
Gasparino, however, is the worst. Wall Street's new answer to Sacco and Venzetti, a tool of the weasels -- last March he got a stern talking to when the muni bond market was in turmoil because of RONA. In 2007 he poured gasoline on the fire in the bank and investment houses.
The stock games, especialky with derivatives, doesn't allow real companies to achieve funds.
IPO becomes a kind of technical investigation.
Overall stocks becomes a tool for distribute printed liquidity.
IPO becomes a kind of technical investigation.
Overall stocks becomes a tool for distribute printed liquidity.
Talking of IPOs, I've been party to so called "due diligence" for a few... Except it's anything but that, they never ask important questions... Last one they failed to ask the company "do you own all the IP"..!! (the answer would have been, "no").
I sense that these naive short ladder attackers who have been "sticking it to the man on Wall Street" might suddenly be noticing a breeze as their own pants fall to their ankles.
The organizers get in first and get out first. That’s how it works. Nothing honest or socially minded about it. Their sheep get shorn.
The prospectus for "Plug Power" IPO back in 2000 showed a generating unit about the size of a small (dormitory or man-cave) refrigerator. The actual unit was the size of a a restaurant size refrigerator!
The road-show for Nikola demonstrated their "tractor" -- it was actually being pulled across the stage with ropes. The stock still trades and their investment banks still write it up positively.
But there's a plus for all of us who do our own research -- Avago was the spinout of the optical and RF components part of HP (or Agilent). Not a single major Wall St. firm wrote it up after their IPO (they were part of a Singapore private equity deal). Doubtless there are scores of diyaudio members who work for the company! We all have drawers full of their LED's.
Like Peter Lynch said decades ago, let your experience be your guide.
I wonder how long this situation will last? I suppose as long as there is no inflation.
With near-zero rates and a torrent of cash from the Fed., the tide will keep rising. But it's precarious isn't it? I notice Musk has bought a chunk of Bitcoin, perhaps because of its inflation-proof property?
With near-zero rates and a torrent of cash from the Fed., the tide will keep rising. But it's precarious isn't it? I notice Musk has bought a chunk of Bitcoin, perhaps because of its inflation-proof property?
Another lesson learned - a great industry changing product can still fail the Market - ie Tripath. Lost my entire investment on that one...bah!
Dr Tripathi - great Electrical Engineer, but as a businessman, not so much....
On that particular stock, the Shorts drove it into oblivion.
Still have (and love) my Bel Canto evo2 amp (Tripath TA0104).
Dr Tripathi - great Electrical Engineer, but as a businessman, not so much....
On that particular stock, the Shorts drove it into oblivion.
Still have (and love) my Bel Canto evo2 amp (Tripath TA0104).
There is something I find ironic. There seems to be a sentiment on Yahoo! Finance (which I don't consider a reliable news source, but anyway) that current US stock market optimism is justified by the effective vaccine rollout and by pent-up consumer demand. Those things are likely true and therefore likely to restore the economy to a more normal footing within a year or two. But the reason the market is so inflated is because of Fed. measures to compensate for recession and a normal situation is not having these measures. So far from sustaining the bubble, economic recovery is likely to burst it, IMO.
Another analysis I have used is the CAPM. Historically, I believe the risk-free rate is some 3% and the S&P500 expected return is 7%-8%. For the same Sharpe ratio, a cut in risk-free to near zero should change the S&P500 expected return to 4%-5% (causing an increase in prices). At the moment, prices imply a 2.5% return. So the market is significantly over-priced even beyond what a zero interest rate policy would predict. And it's not like the pandemic has significantly boosted the future economy, quite the opposite. IMO.
What I don't know is when prices will drop. Timing is a trader's domain. 😎
Another analysis I have used is the CAPM. Historically, I believe the risk-free rate is some 3% and the S&P500 expected return is 7%-8%. For the same Sharpe ratio, a cut in risk-free to near zero should change the S&P500 expected return to 4%-5% (causing an increase in prices). At the moment, prices imply a 2.5% return. So the market is significantly over-priced even beyond what a zero interest rate policy would predict. And it's not like the pandemic has significantly boosted the future economy, quite the opposite. IMO.
What I don't know is when prices will drop. Timing is a trader's domain. 😎
They say the market reflects and "sees" the economy 6- 9 months into future. We have Biden in Presidency pushing out more helicopter money (even tho most of past checks largely went right to paying down debt, but will likely be spent this time around), and advocating a boom in infrastructure projects (anyone notice price of steel lately?)
We have companies getting ready to ramp up all hiring and production and spending after this pandemic blows over - starting in a few months as more people get vaccinated.
We have a huge wave of people getting ready to "Party Like Its 1999" this summer with Vacations, home improvements and auto upgrades.
But next year around this time, well, it may be ugly as everything settles out. And inflation, its coming...
Make Hay when there's Sunshine.
We have companies getting ready to ramp up all hiring and production and spending after this pandemic blows over - starting in a few months as more people get vaccinated.
We have a huge wave of people getting ready to "Party Like Its 1999" this summer with Vacations, home improvements and auto upgrades.
But next year around this time, well, it may be ugly as everything settles out. And inflation, its coming...
Make Hay when there's Sunshine.
"Buy straw hats when it's snowing" -- with this phrase in mind I bought a straw hat when I went to work for a big NYC bank after grad school and wore it on the LIRR -- quite the motif circa 1925.
#2 son who trades for a living asked me if I had any computers I didn't use any more. He picked them up on Sunday and started mining crypto. I think that he needed the old ATX power supplies. The only downside is the power consumed.