179 upvotes, 11 direct replies (showing 11)
This whole thing reinforces the point that the stock market is complete bullshit, and based on nothing. Cool for folks to make money on it, but it's sure as hell not any kind of indicator of how the country is doing.
Comment by MookyOne at 27/01/2021 at 04:39 UTC
73 upvotes, 2 direct replies
Oh it is absolutely a casino!
Comment by SodaDonut at 27/01/2021 at 11:06 UTC
15 upvotes, 0 direct replies
s&p 500 and dow are decent indicators, but individual stocks definitely aren't.
Comment by GravitasIsOverrated at 27/01/2021 at 18:53 UTC*
4 upvotes, 0 direct replies
I mean, when you get right down to it this isn’t really all that inefficient (although it is dramatic) and does serve an important role in the economy.
Sometimes people realize things all at once - in this case, people realized that some funds made a massively overconfident valuation prediction with a lot on the line. The market will correct by reallocating wealth from the people making poor predictions to the people making somewhat less poor predictions. Right now the valuation is all over the place because things are correcting rapidly and bandwagoning is kicking in, but this is fairly temporary.
In the long run the bears will have finished covering their shorts, bulls will want to cash out to move to the next hot thing, and GME’s price will normalize - probably higher than were they were and lower than where they are. This valuation process is important in "real" economic terms because one of the chief ways a company raises money is by selling parts of itself. GME’s valuation being lower than it should is a pretty significant barrier for them (especially since they're trying to invest in reinventing themselves), so they should be very happy that their valuation is up - in all likelihood GME is currently working out plans to issue new stock to take advantage of the market's newfound appreciation of them.
Comment by [deleted] at 27/01/2021 at 16:22 UTC
3 upvotes, 0 direct replies
to make money
Except the guy who got a 4000% loss on a $8mil bet lol
Comment by MovkeyB at 27/01/2021 at 15:04 UTC
9 upvotes, 0 direct replies
the market is generally smart, except for these literal once in a million events that make it stupid.
do you understand how rare this type of thing is? one stock is being inflated for a month at the most. Do you know how many stocks are out there? This is a drop in the bucket.
Comment by [deleted] at 27/01/2021 at 16:31 UTC
6 upvotes, 0 direct replies
money is fake and just numbers in a computer
its all bullshit
Comment by [deleted] at 27/01/2021 at 11:23 UTC
8 upvotes, 1 direct replies
Yeah efficient market hypothesis is bullshit. But you gotta understand that this sort of event occurs once in a decade. Most of the time fundamentals absolutely matter
Comment by anubysmal at 27/01/2021 at 15:44 UTC
4 upvotes, 0 direct replies
not really, if anything this indicates the opposite. they expected this to happen to the share price. it was deliberate and planned, to me, that suggests an element of predictability. just because you dont understand what a short squeeze is doesnt mean that whats happening here doesnt make any sense.
its true it may indicate a poor state of our economy, however it absolutely does not suggest that the stock market is like a casino
Comment by 72414dreams at 27/01/2021 at 05:57 UTC
-10 upvotes, 0 direct replies
Sir, this is a Wendy’s
Comment by tikaychullo at 27/01/2021 at 17:09 UTC
1 upvotes, 0 direct replies
I wouldn't say it's based on *nothing*, but yes, options can have a lot of fuckery, randomness, and manipulation.
But simply investing in a company because you believe in its value is just standard. They want your money to grow, and you want a return for your investment. Pretty normal.
Comment by [deleted] at 27/01/2021 at 17:26 UTC
1 upvotes, 0 direct replies
Is it though? You could write pages upon pages of financial analysis (you can find plenty on WSB) on why this is happening. Anyone with any economic education knew this was coming back in the start of January. The stock market certainly effects the country in a major way. Does the Great Depression ring a bell for you?