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    Stocks - r/Stocks Daily Thread on Meme Stocks Saturday - Feb 27, 2021

    February 27, 2021

    Stocks - r/Stocks Daily Thread on Meme Stocks Saturday - Feb 27, 2021

    r/Stocks Daily Thread on Meme Stocks Saturday - Feb 27, 2021

    Posted: 27 Feb 2021 02:30 AM PST

    The familiar "Rate My Portfolio" sticky can be found here.

    Welcome traders who just can't help them selves discuss the same exact stock that's been discussed 100s of times a day. I get it, you want to talk about what's popular, what's hot, and that 1.. single.. stock you like.. well here you go! Some helpful links just for you:

    An important message from our mod u/TCGYT regarding meme stocks.

    Lastly if you need professional help:
    * Problem Gambling: Call/Text: 1-800-522-4700 or chat online now.
    * Crisis Hotline (24/7): 1-800-273-TALK (8255) (Veterans, press 1) or Text "HOME" to 741-741

    submitted by /u/AutoModerator
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    I am bullish about the future

    Posted: 26 Feb 2021 07:23 PM PST

    People seem to think because we had 2 big crash close together in 2000 and 2008, we are bound to have one soon.

    I want to remind people before the year 2000, we had a 20 years bullish run. Its totally not impossible we get to 2030 with no crash, especially now that the feds baby sit the market.

    Secondly, we have extremely nice upcoming market conditions. Stimulus checks will either get people to spend money to stimulate the economy, or get them to invest, both will help the stock market. The media is somehow trying to make us believe this is bad, but i think its just bullshit. Inflation has been ultra low for way too long, and feds actually want it to increase. They said many times they won't increase rates before 2023.

    Thirdly, i also think we have more upcomming money sources coming into the market than ever. People from other countries invest in US stock market. With all the GME hype, more people than ever are joining in. Again media trying to twist this to say its "bad", but obviously it isn't bad.

    Another point is, crashes usually happen for a reason, its not random. You can google any of past market crash and find the exact reason it happened. None of these factors are happening right now.

    Another point is, there is a key difference between today and 2000. In 2000, the overvalued .com companies which had PE ratios of 200.... were literally worth nothing! These companies had never made a single profit! Once people realized they invested massively in a .com web site worth jackshit... they sold it obviously. They had no reason to hold their shares.

    Now check this image about Nasdaq's PE Ratios: https://i2.cdn.turner.com/money/dam/assets/150305131443-nasdaq-pe-780x439.jpg

    Obviously, you can see the 2000's pe ratios were stupid. This graph is from 2015 when it was at 31.7. What is it today? Nasdaq PE ratio as of February 25, 2021 is 38.5!!!! 5x lower than the 2000s. https://www.macrotrends.net/stocks/charts/NDAQ/nasdaq/pe-ratio

    Its irrelevant if the big hedge funds remove their money from apple and want to scare you into selling your shares. Apple is a massive amazing company that is really worth a lot, and they do make tons of profits. Its not comparable in any ways to the dot com bubble. If other people are stupid and sell their shares, SO WHAT? You will just be able to buy into this amazing company for cheaper.

    So hold your shares and stop worrying about a 2000 level crash, its not happening.

    A correction? Maybe. But who cares, this just slows us down a little. Corrections are healthy and help us avoid a real crash.

    EDIT: Thank you for the award! :D

    EDIT2: Corrected the PE ratio for nasdaq

    submitted by /u/Floofyboy
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    Fidelity 0$ commission. Is there a catch?

    Posted: 27 Feb 2021 09:13 AM PST

    So I've been buying stocks with fidelity, and I also just previewed a sell order. And they charge $0 commission for either.

    Is there a catch??? Am I missing something? Cause how do they make money?

    The reason I'm asking is cause I'm new to this and only investing 3k currently, but I keep seeing people saying that investing this little is not worth it cause you end up losing your gains with commissions, fees and taxes.

    But between Fidelity 0$ commissions, and the fact I'm definitely planning to keep the shares at least longer than a year to get lower taxes. Is there anything else that would eat up my profits? (Apart from the stock prices dropping obviously)

    Also not sure if relevant but I'm mostly doing super safe choice. APPL, MSFT, COSTCO, and Adobe.

    submitted by /u/smoresNporn
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    A Warning About ARK Funds

    Posted: 27 Feb 2021 11:01 AM PST

    Before you downvote: I dont hold a long or short position in any ARK fund or their holdings

    This week has been a bad week for tech and growth stock investors in general. The Ark funds have been hit hard and faced some liquidations. Cathie publicly told everyone her plan if faced with liquidations, she planned to sell the megacap stocks so she wouldn't have to touch her illiquid small caps.

    Well thats exactly what the ARK funds did this week. As of today ARKK no longer holds any FB, AMZN, AAPL, TSM and BABA. She sold all of it this week and bought more small caps and TSLA. Now ARK is is a very precarious situation. Their biggest stocks are now TSLA, PYPL, SHOP and SQ. If the sell off continues and ARK will be forced to sell these stocks or sell their illiquid small caps.

    A lot of people have taken note of this, including hedge funds which may enter predatory shorts if they think ARK is vulnerable. The next couple of weeks is crucial for ARK, should the market go back up they will look like geniuses, but should it go down...they will be in a world of pain.

    If ARK is forced to sell the small caps which are illiquid, it will crash the prices and crater ARK's NAV. This will add to the bad performance and may accelerate redemptions creating a death spiral.

    EDIT: I was wrong about TSM. They still have .5% TSM

    submitted by /u/yikejaw
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    Unpopular Stock Opinions - discussion thread

    Posted: 27 Feb 2021 07:40 AM PST

    I come to you all with a question: What are your most unpopular stock opinions?

    In other words, which stocks/indexes are you bullish/bearish on when others seemingly aren't, and why? Likewise, what trends do you see transpiring in the stock market in the coming weeks, months and years ahead, and why?

    There is a lot of noise in the markets now and everyone is chipping in with their opinions for better or worse. However, the most successful investors out there have proved time and again they are those who don't get influenced with the surrounding noise.

    So let's get into it - chip in with your most unpopular opinions on the stock market that you remain confident in.

    This is a safe space, civil discussion only!

    submitted by /u/pabloseason
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    How can everybody be so confident that the market won’t crash?

    Posted: 27 Feb 2021 02:31 AM PST

    I just opened the front page of this subreddit and the first 10 post or so are all saying that the market won't crash and that we all should be bullish?

    All I see is that we're in a much worse state compared to the marker in februari 2020 while having much more "overpriced" stocks in my opinion.

    How can you justify being bullish with these stock prices without getting blinded by saying the stocks will be worth it in the future, wouldn't that mean that they should be (almost) flat for a few years to adjust their market worth?

    submitted by /u/Perziyka-Nakura
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    Please judge the portfolio I’ve started for my newborn

    Posted: 27 Feb 2021 09:13 AM PST

    Hi all, I am investing 10k into a variety of ETFs and stocks as a nest egg for my newborn. I'd like some guidance as to whether any of this is redundant or simply a bad idea. I am really very new to investing, but was able to save this over the years with the knowledge that I wanted to start a fund for my child.

    VOO (15 @350)

    VXF (5 @177)

    ARKF (22 @55)

    QQQJ (43 @33)

    AAPL (10 @122)

    In sum these equal about 10k with about 5k in conservative VOO and smaller amounts in more experimental funds. AAPL is the odd man out here as a non-ETF.

    What do you think?

    submitted by /u/mybballaccnt
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    Why equities are just in the beginning of the bull run [Long post]

    Posted: 26 Feb 2021 09:57 PM PST

    Wrote this for wsb, but it also goes here, I guess.

    TL;DR: This post will try to present the thesis that equities are just in the beginning of the bull run and argues that you should be investing in the stock market right now.

    Premise:

    Equities are selling off due to rising treasury yield. The reason behind the rise of treasury yields are complex.

    But let me try to explain nonetheless.

    1. People are expecting that the economy will reopen successfully and will have a higher inflation and all that stuff. Now yields being that low, it was slowly getting unattractive as bonds are not necessarily the best investment if the economy goes into full gear as there is less need for safety and more appetite for risk assets. Plus, bonds were already at a price where yields couldn't have gone any lower(meaning existing bond prices couldn't have gone any higher). Thus, this lower demand lead to a rise in yields.
    2. This created a feedback loop due to mortgage-backed bond investors selling off their treasury bonds which helped the treasury yield to go even higher. They do it due to convexity hedging. If you have no idea about what I said, read this one up. This has been one of the primary driver behind the recent movement of treasury yield. Overall, this elevated level in treasury yield is unlikely to sustain because the FED continues to abolish the free market and will continue to buy. Thus, the yield is unlikely to rise too much higher.
    3. JPow and Yellen has already given us enough indications that they will accept lower rates for a longer period of time. Specifically, until we reach full employment. Thus, they will allow the economy to get hot and also allow inflation to rise if the mean inflation is 2%. These are based on their publicly stated statements, which means it may mean something.
    4. Now, consider the scenario, real interest rate will remain negative, the yield in treasury is unlikely to reach too high because of the artificial market scenario. While, we know that long term bonds outperformed stocks tremendously over the last 20 years(article data till April 29) With long treasury bonds having an annualised return of 8%+, while S&P 500 having only 5.5%+; that was a terrible risk adjusted return for stocks. The same picture emerges for the last 5 years since 2015(dataset ourdated).
      1. This whole ordeal is because yield was very high at the beginning of the century. And as yield continued to fall, the bonds rose in price, as is customary. Now, as the yield slightly rises, it quickly becomes more attractive as the yields could fall pretty quickly and increase the bond price. This also attracts more bond investors; as a result, I suspect that yields will not rise too much. Plus, it is a very crowded trade.
      2. As a result of bond having this superb risk-adjusted return, stocks saw huge outflows. According to Cathie Wood, stocks saw $300B in outflows(excluding repurchases) since 2018 and bonds saw $1T in inflows. So, if there is actually any bubble, it is in the bond market. Think about it for a second. Sure, bonds provided absolutely superior risk-adjusted return compared to stocks, but because of this, everyone and their mother are in bonds. Stocks were like the orphan child in the bigger scheme of various financial markets.
        1. Now, bond yields are rising slightly and the yield curve is normalising, but going any higher is unlikely due to the slow abolishment of free market. In this scenario, we won't be seeing any negative rates, while continuing to experience negative real interest rate; being a bond investor would be painful. If you are a bond investor already, you want the yield to go lower, potentially negative, but that is not happening either. If yields rise, you are losing money. If you are a prospective bond investor, you have to worry if yields will go higher just after you invest with all the inflation shenanigans going on.
    5. Liquidity is present in the market. Bonds aren't that attractive, stocks are a good bet in this scenario. Especially with all those stimulus talks and stuff. Inflation is also good for the stock market overall as long as we don't go Weimar republic style. After all, you are duddenly not going to stop buying from AMZN, stop using MSFT products or PLTR products just because inflation is here. Question is, which stocks? I think boomer stocks are your best friend(look for the things BRK buys). And after the whole convexity hedging and yield rising stabilises, buying the dip in the tech stocks wouldn't be a bad idea either(I think).
    6. US Dollar has been declining after March. It is, overall, good for the stock market and the global economy in general. For one, it makes it easier for foreigners to buy US stocks and two, it boosts the earnings of our corporations in foreign markets. One could say, EM stocks are a potential good source for risk-adjusted return and I also think the same. Although, short USD have had been a popular, crowded and winning strategy for the last year, one should be careful in doing so as any black swan event could catapult the USD higher. However, in the long run, I suppose EM stocks would also be a good area to look out for. Especially, India seems to be the choice for our lawmakers currently.
    7. Rising commodity prices and stuff are mostly due to speculation, and not specifically supply crunch. Some are saying that we will see very high inflation due to supply shortage, which would be bad for the market. But I disagree. We have so many structural deflationary forces within our economy. Stagnating wages, high unemployment, technological innovations, cheap labour based production in foreign countries, demographic challenges etc. Some supply crunch is definitely there, but to say that production won't normalise after demand rises due to reopening and stuff is being wilfully blind.
      1. Some of you may not know that CPI does include rents, healthcare expenditures and stuff based on how much they actually cost us, so, before you comment that the government is manipulating CPI to make inflation numbers low, I would suggest you to read how and what are the weights of each consumption factors. Also, stimulus money hardly increases velocity of money because it doesn't really counter the loss of employment income. Just for clarification, there is lots of asset inflation, for example, bonds are very inflated.
    8. Our government is doing a shit ton of deficit financing, from that we can expect they will do everything to stop deflation and inflate away the debts. It is in the best interest of our government to keep borrowing money at low cost and to inflate away the debt. Thus, our government has a huge incentive to keep the yield low, while also allowing inflation to rise. You may think, how can this be a free market if... basically, this is capitalism with USA characteristics. Add to that, direct or indirect beneficiaries of these shit ton of deficit financing is, well, the various companies.

    Conclusion

    Using my crystal ball, which cost me $0 to buy, I can say this:

    This is what I can say from all the points that I have mentioned. Risk assets like stocks are now more attractive than bonds. USD is accommodative for the stock market. Global economic recovery, especially in EM economies will be good, thus helping our companies. Deficit financing. Inflation will be good for most stocks. Liquidity is present. Bond yields will also stabilise soon as the feedback loop ultimately stops. No deflation. There is likely going to be real inflow into stocks. Stocks will probably finally outperform long term bonds.

    Thus, I think, while we will have lower overall rate of return(just like Munger said) in this decade, yet I think we will continue to have a good bull market for a while. Current panic in the market is nonsensical to me.

    Disclaimer: This is not financial advice. I eat crayons and stuff. This is a casino. Don't listen to a stranger on the internet, please don't. I also have used my crystal ball to predict all those future outcomes.

    Risk of my predictions being completely off the mark.

    • Fed decides to increase fed funds rate suddenly for overheating/other events and starts quantitative tightening.
    • We do have a huge supply crunch in every sector after reopening and inflation goes to the moon. Yields also goes to the moon.
    • Black swan events.
    • Think of something yourself man!
    submitted by /u/nafizzaki
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    If you only have $100 to invest, what stock would you invest it in?

    Posted: 27 Feb 2021 10:56 AM PST

    I just have a hundred bucks left to spare for investing at the moment and I don't want to have it just lying dead in my bank account. I want to make it grow. It's probably best to invest it on a penny stock to see a significant profit return. I've invested my other money in ADA and it's the only thing that's green in my portfolio right now.

    submitted by /u/thatgreengentleman_
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    Built this site as a joke to calculate how much you could have made.

    Posted: 27 Feb 2021 01:15 PM PST

    Hey guys so not sure if you guys do this but I always think back to when I should have bought a stock and think only if i had.

    Well to make things worse, I quickly made a site the other night where you can enter a stock and date along with amount invested and it'll tell you around what you would have made.

    http://www.ifonlyihadstock.com/

    Please let me know what improvements etc can be done.

    I was thinking of adding news, related stocks to check, mock portfolio.

    Would love to hear your thoughts!

    Thanks

    submitted by /u/prgrmmr7
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    PSA: Short-selling (naked or not) does NOT cause bankruptcy or even permanent depressions in price

    Posted: 27 Feb 2021 08:55 AM PST

    In response to this conspiracy thread here which has somehow made it to the top and is written by someone who lacks a basic understanding of how finance works and has never worked in the financial industry: https://www.reddit.com/r/stocks/comments/ltoikn/illegal_naked_shorting_and_stock_manipulation/

    Let's really get into the basics first:

    1. Enterprise value = Value of all cash-generating assets of company = Value owned by debt holders + value owned by equity holders
    2. Bankruptcy = not enough cash generated by assets to pay off interest on debt. Because debt holders are higher in the cap structure and get paid first, if there's not enough money to pay them it implies there's not enough money to pay equity holders either, and equity values fall dramatically.
    3. Share price = Value owned by equity holders / # of shares outstanding

    Why this all matters?

    Short-selling doesn't cause bankruptcy, a lack of cash to pay off interest from debt does. It's really that simple. Companies are heavily shorted because they're on the verge of bankruptcy, not because short-selling causes bankruptcy. Basic causation and correlation mix-up.

    Short-selling, even illegal short-selling, can only cause temporary depressions in price. The total equity valuation per above, does not change. Share price might temporarily be impacted, due to artificial inflation of shares being sold/outstanding. However, three simple mechanisms completely destroy these short positions over any reasonable amount of time.

    1. Value investors notice excellent P/E multiples due to the artificially depressed price, and shark eats shark.
    2. Intentionally issuing dividends completely screw the position over, and increase equity value by turning naked short-sellers into cash-generating assets. All short-sellers are responsible for covering these dividends out of their own pockets.
    3. Shorting is expensive and requires a trending decline, whereas dilution is a one-time impact. Naked shorts have to manage their opportunity cost, call option purchases, share borrowing costs, and dividend payments. If the share price even stays constant, they eventually bleed until the position has to be closed.

    tl;dr Illegal short-selling probably does happen and it's a bad thing. But it's mostly deployed by momentum traders looking to scalp a few dollars off weak hands. The rhetoric used in that thread is asinine, and the author has a poor understanding of how both sides of the trade works. Any CEO that blames short-selling for bankruptcy is a moron and runs a shitty company.

    submitted by /u/StrangeRemark
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    Late March - April Sell Off?

    Posted: 27 Feb 2021 11:46 AM PST

    Last March we had the huge pandemic dip and a lot of the big boys got in right after the bottom. It's closing to be a year since then and we know the US tax laws grant you major benefits if you hold a stock at least a year. Do you guys think we'll see a decent sell off for tax purposes for the major players? Possibly a sizeable dip before running up again.

    submitted by /u/vegeta_mavi
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    Berkshire Hathaway beats Q4 EPS Consensus by 42.3%, repurchases $24.7 billion in shares, and continues repurchases this year

    Posted: 27 Feb 2021 08:20 AM PST

    https://www.investopedia.com/berkshire-hathaway-earnings-4q2020-annual-letter-5114383#:~:text=Earnings%20per%20share%20(EPS)%20were,%2C%20up%20by%2024.6%25%20YOY.

    This is huge!

    Here's the annual letter:

    https://www.berkshirehathaway.com/2020ar/linksannual20.html

    The coolest thing is that despite selling some Apple stock, BRK shareholders' percentage ownership of Apple actually increased from 5.2% to 5.7%!

    Also, even though he states that $KHC was trading at less than carrying value at year end, the stock has since rallied. It now trades at about the same as carrying value as of Friday.

    submitted by /u/moazzam0
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    House passes $1.9 trillion stimulus bill - impact on market?

    Posted: 27 Feb 2021 12:15 AM PST

    Late night news that the house passed the stimulus bill. It will then be voted in the senate, which has a fair chance of passing through. The bill certainly will have an impact on the stock market, but I'm reading 2 completely opposite opinions about this on Twitter. What's gonna happen to the stock market if the bill eventually pass through?

    submitted by /u/xcsublime
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    GME | Ultimate Guide | Cheat Code Inside

    Posted: 27 Feb 2021 04:57 AM PST

    Disclaimer: I am not a financial advisor. This entire post represents my personal views and opinions, and should not be taken as financial advice (or advice of any kind whatsoever). I encourage you to do your own research, take anything I write with a grain of salt. I love the stock.

    In this post, I'll provide context to this week events and continue a discussion on the financial engineering game happening around GME. Moreover, I'll describe how the jump in the 10 year Treasury yield (risk parity trade) severely weakened the short position.

    The game will continue but retail holding no matter what underpins the entire game framework and mechanics.

    Retail holding GME shares and buying the dip with shares or fractional shares is the cheat code.

    The Retail Assisted Hedge Funds (whales) will do the heavy work of financial engineering.

    Army of Quants in other hedge funds have analyzed the markets structure, positioning, market participant's move and counter move, and have concluded shorts are F%#Ked. They see the market mechanics in retail's favor and they are sided with retails for easy profits.

    You are not alone.

    Background

    First, let's define the market participants and their role in the market. The market participants are describe in 4 groups:

    1. Retail – (Millions) - Reduces liquidity by buying up millions of shares
    2. Retail Allied Hedge Funds (RAHF) – Gamma squeeze Vikings – Provides leverage
    3. Market Maker – Defines the cost of options/moves in the game – Delta/Gamma hedge buyer
    4. Shorted Hedge Funds (SHF) – Participants that have shorted GME shares.

    The Allies

    Retail -- HOLDING no matter what -- play a pivotal role in this financial engineering game. A single or fractional share is meaningful and crucial. Each and every retails plays a vital part. Each share is a vote against the system that led to the Great Financial Crisis.

    Retail are the lodestone because have bought up millions of GME and by holding no what happens they have effectively removed millions of shares from the float. This is crucial because it creates a condition in which GME shares are very illiquid, so any natural (non shorted/manipulated) volume weighted move in prices tend to explode higher. In these natural volume weighted moves, GME share prices, moves in dollars and not pennies. This rate of change in share price, creates a volatility monster.

    The illiquidity in GME shares is needed by the Retail Allied Hedge Funds (RAHF) to set up gamma squeezes. The illiquidity created by retail, and the buying of OTM call options by RAHF, caused the gamma squeeze this week (February 24, 2021).

    In the week of February 24, 2021, RAHF bought up 60C OTM and 70C OTM options. The initial 100,000 contracts (10M notional shares) which cost about $10-$16M for the RAHF, led to a gamma squeeze that caused $664M in mark to market losses for shorts [1].

    At this point let us highlight the volatility monster. Retails holding no matter what and the very high short interest, has created a highly illiquid float. High volume weighted buys in this system causes the share price to move in dollars not pennies*.* This high volatility (volatility monster) quickly runs up the share price and very far out OTM call options quickly become ITM. The rapid gamma convexity is an inherent attribute of this system/game so long as retails hold no matter what. Again, retails are the vital participants in this game as all subsequent RAHF financial engineering moves are predicated on them holding.

    Tldr;

    Retail and Retail Allied Hedgefund (RAHF) created a market force of low liquidity and high leverage that can quickly cause far out of the money (OTM) call options to be in the money (ITM). This force can cause massive moves and gap up in share price.

    The Axis

    The axis consist of Hedge funds shorting GME. They have a very high short interest in GME and want to prevent the mother of all short squeezes (MOASS).

    In order to prevent MOASS they have 3 main moves:

    1. Synthetic longs
    2. Arbitrage
    3. Market manipulation

    Synthetic Long

    An explanation of synthetic long can be found on youtube.

    Basically, Short can create a long share using options (synthetic long share) but this share has an expiration date based on the option used. In other words, after an expiration date, this synthetic long share disappears.

    What they have likely done is this:

    They have used options to create synthetic longs to hedge against their short position. So they are covered, but only for a certain amount of time because of options expiration.

    Someone on reddit analyzed the put-call parity for GME, and deduced that shorts had created synthetic long with options up to the beginning of April 2021. This is the likely date in which the synthetic longs disappear and short position are no longer hedged. Thus short interest should jump again once the synthetic long expire and Hedge Funds do not rehedge.

    Short are in a precarious situation again if they do not rehedge.

    The gamma squeeze of Feb 24, 2021 has spiked implied volatility, so it's now very expensive for the shorts to build synthetic longs and roll over their hedges in the options market.

    Arbitrage

    This manoeuver consists of creating shorts and synthetic longs in ETFs which contain GME shares as a proxy [2].

    An example of this manoeuver is if either bought or borrowed GME shares from XRT to drive down the share price with the goals of invoking weak hands to sell off GME.

    The Arbitrage trade allows the Shorted Hedge Funds (SHF) to maintain a neutral-game positive position and delay the MOASS.

    Market Manipulation

    Legal market manipulation is the only value add that Shorted Hedge Funds provides to their wealthy clients. The Shorted Hedge Funds are skillful at market manipulation and not portfolio construction. Market manipulation becomes a business cost for them.

    Legal frameworks are set up to allow for market manipulation and Shorted Hedge Funds know and have exploited them to drive down GME share price. The markets are rigged against you, dear retail. And now you are woke.

    There have been numerous stories of odd events happening with GME share blocks in dark pools and aftermarket trading.

    The mere fact that of unusual activity in GME shares is a data point to support the claim that GME shares are still heavily shorted because if it wasn't the case, these market participants would not need to manoeuver in such extreme ways to maintain a neutral-game positive position.

    The Game

    The invariants of the game consists of liquidity and leverage. Each market participant's moves are aimed at shifting those global system values.

    Retail continue to buy up millions of shares, creating a low effective float. Retail Allied Hedge Funds continue to set up gamma squeezes. The low liquidity and leverage creates a volatility monster that can quickly cause far OTM call options to be ITM.

    It'll be interesting to see what happens when 1400 stimmy checks are mailed out.

    Shorts continue to arbitrage, hedge with synthetic shorts (likely until April 2021), and manipulate markets to prevent the MOASS.

    The Mother of All Short Squeeze starts around GME share price of $800. There is a hedge fund out there with assets under management (AUM) of 60B that has shorted GME. GME @ 800 would have a market cap of 56B. The mark to market losses for that hedge fund could be 70% of its AUM.

    It may happen sooner than than expected, if the Retail Assisted Hedge Funds can gamma squeeze GME to $800/share.

    But, Risk Parity enters the Arena

    Risk Parity

    A description of the risk parity can be found here https://www.investopedia.com/terms/r/risk-parity.asp

    Basically, Risk Parity allows hedgefunds to leverage position. The lower the 10 year treasury yield, the move leverage that can be applied on any position.

    Now that the 10 year treasury yield is moving higher, leverage has to be unwind (deleverage).

    This deleveraging also applies to positions to suppress moves in GME. This can be disastrous for shorts but creates a favorable condition for the Allies.

    So keep an eye on the 10 year treasury yield. As it continues higher, you'll see the entire market go red, as hedge funds deleverage all their bubble plays but it also helps GME longs because it'll make leveraged naked short positions more costly to hold.

    GME Virtuous Cycle

    GME is transforming into a gaming cloud company. Numerous reports came out this week that they are now selling computer graphic cards, and PC gaming rigs. The shorts had valued GME as a brick and mortar but their investment thesis has changed while they hold a dangerous high short interest. GME is a cloud company and the valuation metric should shift to account for this change in business model.

    The implication is that as the markets finally starts to value GME as a cloud company, its share price will continue to climb, squeezing out shorts. Interspersed with this move to cloud valuation -- that can take up to a couple of years -- will be numerous gamma squeezes as Retail Allied Hedge Funds take advantage of the virtuous cycle to set up more gamma squeezes.

    End State

    The end state is either MOASS or GME inclusion in the SPX500.

    When GME is included in the SPX500, shorts will be against tens of millions of passive investors. At that point they have lost, but before then, MOASS.

    The Mother of All Short Squeeze starts around GME share price of $800. There is a hedge fund out there with assets under management (AUM) of 60B that has shorted GME. GME @ 800 would have a market cap of 56B. The mark to market losses for that hedge fund could be 70% of its AUM.

    MOASS may happen sooner if the Retail Assisted Hedge Funds can gamma squeeze GME to $800/share.

    Over the next months, expect many more gamma squeezes and lower share prices but as long as the virtuous cycle holds, we will approach GME at $800/share. That is the process. Believe in the process.

    Cheat Code

    The cheat code is just to HOLD and buy the dip with shares or fractional shares. Tell a friend. That's it. As long as retail do this, MOASS will likely happen as the virtuous cycle takes hold.

    References

    [1] https://markets.businessinsider.com/news/stocks/gamestop-short-sellers-billions-losses-reddit-traders-wallstreetbets-rally-gme-2021-2-1030125873

    [2] https://www.reddit.com/r/GME/comments/lp37ll/short_selling_etfs_what_it_does_how_it_affects/

    submitted by /u/hello-world-foo-bar2
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    Everybody is an Oracle. Predicting the market the day after...instead of before!

    Posted: 26 Feb 2021 10:55 PM PST

    I see a lot of posts that go something like "Oh yeah, I was saying last week to sell off all my holdings because I knew this weeks dip was coming" or "oh yeah, I knew to buy *stock* last week because there would be another month-end 'squeeze' bump".

    This frustration continues when I read a flurry of industry-articles that come out during the day as if they knew it was going to happen...no matter what happens. Like they've got them pre-made to send out no matter what.

    I am glad you are wise and have plenty of foresight to share, I truly am, that's why I'm here...but please, next time, share it BEFORE so we can all get in the fun.

    Sometimes I see an event happen and I think to myself "of course that was going to happen it makes so much sense" and honestly, I wish I could learn how to figure that out BEFORE it actually happens.

    I am trying to learn as best I can by reading a lot in this thread but the more time I spend here continuing to see after-the-fact posts of wisdom, I start to think nobody knows anything and perhaps the Bogle Three-Fund-Portfolio is the best way to go.

    DL;DR: My short-play account just became a long-play account because the r/stocks Oracles were holding out. ヽ(ಠ_ಠ)ノ

    I also averaged down as hard as I could this week, so dear lord please bump tech next week.

    submitted by /u/dreamliner330
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    When would be a good time to buy into ARKK? (02/27/2021)

    Posted: 27 Feb 2021 10:27 AM PST

    I am new to investing, but I am looking to invest in ARKK after doing some research. When would be a good time to invest? Will it go down soon due to its recent success or is now as good a time as any?

    submitted by /u/UselessGenZer
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    Reddit ETF Cost

    Posted: 27 Feb 2021 03:46 AM PST

    I did the math for the Reddit ETF

    Symbol Description Last Mkt cap P/E 52 range Yield Ex-date Earnings date Weight (%) Share Ratio Per $10000 USD At Least 1 Share At Least 1 Share Floor Cost Per Stock Weight ($)
    AAPL APPLE INC 121.26 2.10T 33.79 53.15-145.09 0.65% 5-Feb-21 29-Apr-21 5 4.123371268 31.88974105 31 3759.06
    AMD ADVANCED MICRO DEVICES INC 84.51 105.31B 42.2 36.75-99.23 0.00% -- 27-Apr-21 5 5.916459591 45.75730683 45 3802.95
    DKNG DRAFTKINGS INC 61.53 23.61B -- 10.60-64.78 0.00% -- 14-May-21 5 8.126117341 62.8465789 62 3814.86
    ENPH ENPHASE ENERGY INC 176.06 23.34B 190.39 21.49-229.04 0.00% -- 4-May-21 5 2.839940929 21.96381915 21 3697.26
    ICLN ISHARES TRUST GLOBAL CLEAN ENERGY ETF 25.85 6.02B -- 8.08-34.25 0.36% 30-Dec-20 -- 5 19.34235977 149.5918762 149 3851.65
    NET CLOUDFLARE INC 73.97 19.06B -- 15.05-95.77 0.00% -- 6-May-21 5 6.759497093 52.27727457 52 3846.44
    NIO NIO INC 45.78 67.02B -- 2.11-66.99 0.00% -- 1-Mar-21 5 10.92179991 84.46810834 84 3845.52
    NVDA NVIDIA CORP 548.58 359.00B 94.76 180.68-614.90 0.11% 3-Dec-20 20-May-21 5 0.911444092 7.049017463 7 3840.06
    PLTR PALANTIR TECH INC 23.9 38.84B -- 8.90-45.00 0.00% -- 30-Apr-21 5 20.92050209 161.7970711 161 3847.9
    PLUG PLUG POWER INC 48.38 21.78B -- 2.53-75.49 0.00% -- 6-May-21 5 10.33484911 79.92868954 79 3822.02
    SQ SQUARE INC 230.03 92.51B 539.36 32.33-283.19 0.00% -- 5-May-21 5 2.173629527 16.8106334 16 3680.48
    TSLA TESLA INC 675.5 712.23B 1, 159.41 70.10-900.40 0.00% -- 28-Apr-21 5 0.74019245 5.724574389 5 3377.5
    ABNB AIRBNB INC 206.35 18.88B -- 121.50-219.94 0.00% -- 5-May-21 4 1.938454083 14.99181003 14 2888.9
    AMZN AMAZON COM INC 3,092.93 1.54T 73.09 1,626.03-3,552.25 0.00% -- 29-Apr-21 4 0.129327208 1.00020369 1 3092.93
    BABA ALIBABA GROUP HOLDING LTD SPON ADS EACH REP 8 ORD SHS 237.76 649.84B 30.4 169.95-319.32 0.00% -- 21-May-21 4 1.682368775 13.01127187 13 3090.88
    CRSP CRISPR THERAPEUTICS AG 125.69 9.60B -- 32.30-220.20 0.00% -- 27-Apr-21 4 3.18243297 24.61261835 24 3016.56
    DIS WALT DISNEY COMPANY (THE) 189.04 346.68B -- 79.07-200.60 0.00% 13-Dec-19 4-May-21 4 2.115954295 16.36457893 16 3024.64
    SE SEA LIMITED ADS EACH REP ONE CLASS A ORD SHS 235.69 84.02B -- 35.61-285.00 0.00% -- 2-Mar-21 4 1.697144554 13.12554627 13 3063.97
    TSM TAIWAN SEMICONDUCTOR MANUFACTURING SPON ADS EACH REP 5 ORD TWD10 125.94 653.45B 55.26 42.70-142.20 1.11% 17-Jun-21 15-Apr-21 4 3.176115611 24.56376052 24 3022.56
    CRM SALESFORCE.COM INC 216.5 212.07B 60.65 115.29-284.50 0.00% -- 27-May-21 3 1.385681293 10.71672055 10 2165
    FSLY FASTLY INC 73.58 7.39B -- 10.63-136.50 0.00% -- 5-May-21 3 4.07719489 31.53261756 31 2280.98
    ARKG ARK ETF TR GENOMIC REVOLUTION ETF 93.51 10.71B -- 24.00-115.15 0.00% 29-Dec-20 -- 2 2.138808684 16.54133248 16 1496.16
    JD JD.COM INC SPON ADS EACH REPR 2 ORD SHS CLASS A 93.87 125.05B 79.12 32.70-108.29 0.00% -- 11-Mar-21 2 2.130606157 16.47789496 16 1501.92
    JMIA JUMIA TECHNOLOGIES AG SPON ADS EACH REP 2 ORD SHS 44.31 3.62B -- 2.15-69.89 0.00% -- 12-May-21 2 4.513653803 34.90814715 34 1506.54
    Totals 6850.52 100 10000 77339 75336.74

    So if you're broker doesn't do partial shares, you have to spend $75,336.74 USD to completely buy the Reddit ETF.
    Prices captured at February 26, 2021.

    Updated if you bought Reddit ETF on April 1, 2020.

    Symbol Description Apr 1 2020 or Earliest Feb 27 2021 Gain ($) Gain (%) Weight (%) Share Ratio Per $10000 USD At Least 1 Share At Least 1 Share Floor Cost Per Stock Weight
    AAPL APPLE INC 61 121.26 60.26 98.78688525 5 8.196721311 39.3442623 39 2379
    AMD ADVANCED MICRO DEVICES INC 44 84.51 40.51 92.06818182 5 11.36363636 54.54545455 54 2376
    DKNG DRAFTKINGS INC 20 61.53 41.53 207.65 5 25 120 120 2400
    ENPH ENPHASE ENERGY INC 29.96 176.06 146.1 487.6502003 5 16.68891856 80.10680908 80 2396.8
    ICLN ISHARES TRUST GLOBAL CLEAN ENERGY ETF 9.33 25.85 16.52 177.0632369 5 53.59056806 257.2347267 257 2397.81
    NET CLOUDFLARE INC 23.54 73.97 50.43 214.231096 5 21.2404418 101.9541206 101 2377.54
    NIO NIO INC 2.65 45.78 43.13 1627.54717 5 188.6792453 905.6603774 905 2398.25
    NVDA NVIDIA CORP 250.77 548.58 297.81 118.7582247 5 1.993858915 9.57052279 9 2256.93
    PLTR PALANTIR TECH INC 9.88 23.9 14.02 141.902834 5 50.60728745 242.9149798 242 2390.96
    PLUG PLUG POWER INC 3.38 48.38 45 1331.360947 5 147.9289941 710.0591716 710 2399.8
    SQ SQUARE INC 48.63 230.03 181.4 373.0207691 5 10.2817191 49.3522517 49 2382.87
    TSLA TESLA INC 98.76 675.5 576.74 583.981369 5 5.062778453 24.30133657 24 2370.24
    ABNB AIRBNB INC 145 206.35 61.35 42.31034483 4 2.75862069 13.24137931 13 1885
    AMZN AMAZON COM INC 1920 3092.93 1172.93 61.09 4 0.208333333 1 1 1920
    BABA ALIBABA GROUP HOLDING LTD SPON ADS EACH REP 8 ORD SHS 188.75 237.76 49.01 25.96556291 4 2.119205298 10.17218543 10 1887.5
    CRSP CRISPR THERAPEUTICS AG 40.4 125.69 85.29 211.1138614 4 9.900990099 47.52475248 47 1898.8
    DIS WALT DISNEY COMPANY (THE) 94.3 189.04 94.74 100.466596 4 4.241781548 20.36055143 20 1886
    SE SEA LIMITED ADS EACH REP ONE CLASS A ORD SHS 43.11 235.69 192.58 446.7176989 4 9.278589654 44.53723034 44 1896.84
    TSM TAIWAN SEMICONDUCTOR MANUFACTURING SPON ADS EACH REP 5 ORD TWD10 46.73 125.94 79.21 169.5056709 4 8.559811684 41.08709608 41 1915.93
    CRM SALESFORCE.COM INC 136.5 216.5 80 58.60805861 3 2.197802198 10.54945055 10 1365
    FSLY FASTLY INC 17.92 73.58 55.66 310.6026786 3 16.74107143 80.35714286 80 1433.6
    ARKG ARK ETF TR GENOMIC REVOLUTION ETF 29.7 93.51 63.81 214.8484848 2 6.734006734 32.32323232 32 950.4
    JD JD.COM INC SPON ADS EACH REPR 2 ORD SHS CLASS A 40.46 93.87 53.41 132.0069204 2 4.943153732 23.72713791 23 930.58
    JMIA JUMIA TECHNOLOGIES AG SPON ADS EACH REP 2 ORD SHS 2.87 44.31 41.44 1443.902439 2 69.68641115 334.4947735 334 958.58
    Totals 6850.52 100 10000 48000 47454.43
    Created On Total Cost On Created Total Cost on Feb 27 2021 Gain ($) Gain (%)
    April 1, 2020 47454.43 75336.74 27882.31 58.75596862
    submitted by /u/chairisborednow029
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    Huge Crash or tiny crash or no crash or who knows what

    Posted: 27 Feb 2021 07:15 AM PST

    Something changed in the 21st century. And that something is our government printing money and sending stimulus checks left and right. The Fed is essentially acting like a market hedger now. I also think that given our extreme political polarization, no party can afford to oversee market crash without trying to fix it somehow. This is insane, that's not what government is supposed to do. But it is doing it. So yes, it may crash in 2021 but by 2024 nobody will remember it.

    And given that now everyone is invested in the market, shareholders became too big too fail. So S&P drops 50% and all pension plans and 401k take a hit and what will happen? We will have retirees living on government cheese? No, they will print more and will send more checks. Because if they don't they are out of power at next elections. This has not been the case in the 20th century. People had stable pensions, were invested in government bonds, could live off social security. People actually aspired to go to college and relied on their careers to build wealth, not stock market. Now we are all in equities, the entire society.

    And finally, if you look at what's going on with personal finances and purchases - people want more and companies can't keep up. There is shortage of everything from Peloton bikes to glaucoma medication. We don't see built up of inventories, it's the opposite. Even housing market isn't suffering - there is shortage of houses/condos. When people are bearish they don't take out $1M mortgage.

    Now, of course if you need your money next 2-3 years, don't put it in equities. But this has always been the case. Otherwise, I am now more worried about my cash turning into junk than market crashing. Because market will go back up eventually, but cash will not.

    submitted by /u/Dowdell2008
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    Hawaiian Airlines Recovery Play

    Posted: 27 Feb 2021 11:41 AM PST

    Here's my thesis.

    International travel is still going to be hampered by Covid-19 restrictions and/or uncertainty. People are going to travel domestically. In the US, Hawaii is going to be an attractive location once vaccines are administered in masse. You don't need a passport and quarantine for citizens probably won't be a thing. HA will benefit from bookings. I know Costco books with them. I've flown with them before booking through Costco. I like the stock.

    Position 100 shares @ 18ish.

    submitted by /u/LumpyShoulder4339
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    "zombie" companies

    Posted: 27 Feb 2021 07:34 AM PST

    I keep hearing about these zombie companies on this sub and others. I hear some number ranging from 20% - 40% of all listed companies being zombies. What is the real extent here and what is the implications if these companies end up not being able to pay their debts in the future? What are some examples of these companies, do SPACs count?

    submitted by /u/Augustus-Romulus
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    Help me out with options.

    Posted: 27 Feb 2021 11:34 AM PST

    I have a grasp of what they do. I have deposited $100. Made $114 then blew my account up basically.

    I am kind of looking for smaller premiums. Do I want to stay more in the money or take gambles a few dollars up?

    Alot of premiums are like $120-$200 I'm looking at. Looking for like .30 to $.70 premiums I can make a call or put on.

    submitted by /u/gramofmayo
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