Redditors vs the hedge funds

[Shippou-Sensei]

I would be surprised if there wasn't a massive overlap between these guys and the NFTers. Same shit really. You guys buy this and hold it forever because reasons.

No fud diamond hands only.

 

[littlebabyjesus]

A terrible film about this has just come out: Dumb Money. I saw it by accident at the cinema last week. It was a MubiGo pick and I didn't know what it was about - sometimes I don't check, I just go. I may have to revisit that policy.

 

[Storm Fox]

I just had a look at the r/superstonks on Reddit and JFC it's so much worse.

For the cringiest memes go here Reddit - Dive into anything
Don't say I didn't warn you

 

[littlebabyjesus]

Just finished the Folding Ideas vid. Yes, very good again.

The crossover with crypto is very obvious and striking. Holding the stock/tokens for their own sake, making out that you're not bothered selling whatever the price, it's going 'to the Moon', total disregard for any real-world value that might justify a price, the fantasies about taking down conventional finance, total ignorance or misunderstanding of the various safeguards and governance that conventional finance has in place.

I think the core thing it has in common with crypto is the fetishising of supply and demand and the idea that reducing supply will always and for ever lead to an increase in price, regardless of an underlying lack of real-world value. That is what sank TerraLuna - again, a striking parallel with this sorry story, where the real world obstinately refused to follow the rules. It hasn't sunk bitcoin yet.

And just going back to that film Dumb Money, I'm annoyed with myself that I didn't just walk out. It is a cartoon version of the fantasy Folding Ideas outlines, with the plucky 'Diamond Hands' underdogs taking money from the evil hedge fund short sellers. It really is a piece of utter garbage. But the fact it got financed and made, then released as a mainstream film in mainstream cinemas, shows how many people don't see through this stuff. Again, much like crypto.

 

[Fez909]

And just going back to that film Dumb Money, I'm annoyed with myself that I didn't just walk out. It is a cartoon version of the fantasy Folding Ideas outlines, with the plucky 'Diamond Hands' underdogs taking money from the evil hedge fund short sellers. It really is a piece of utter garbage. But the fact it got financed and made, then released as a mainstream film in mainstream cinemas, shows how many people don't see through this stuff. Again, much like crypto.

I've just watched the trailer and it all looks right to me? Keith Gill really did get rich off this and at least one hedge fund went down.

Anything else happen that's not in the trailer that wasn't true? Disregarding changes due to dramatic license, etc.

 

[Cid]

I've just watched the trailer and it all looks right to me? Keith Gill really did get rich off this and at least one hedge fund went down.

Anything else happen that's not in the trailer that wasn't true? Disregarding changes due to dramatic license, etc.

There's a very good Folding Ideas documentary you could watch that explains the wider context and developments since...

 

[littlebabyjesus]

I've just watched the trailer and it all looks right to me? Keith Gill really did get rich off this and at least one hedge fund went down.

Anything else happen that's not in the trailer that wasn't true? Disregarding changes due to dramatic license, etc.

As the folding ideas doc points out, a lot of the people inspired by Gill and his ilk lost money. The film doesn't show these people. Instead it portrays a bunch of people who made money by getting in early and keeping faith in Gill. As with all pyramid schemes, the early adopters make money from the late adopters, the 'bigger fools'. And the central message - that the involvement of the 'dumb money' of ordinary people democratises the stock market and gives people a chance to make money they deserve to have - is dangerous nonsense.

 

[kabbes]

As the Folding Ideas documentary makes clear, Gill really did, quite reasonably, just see GameStop as an undervalued, out-of-favour penny stock, which had a chance of hitting 5x its very low level once the next console generation started. He had no thoughts of a short squeeze and no expectation that it would hit 100x what he paid for it. His subsequent elevation to some kind of John the Baptist figure is all just an after-the-event creation myth. One that Gill himself wisely distanced himself from by disappearing from public view.

 

[Fez909]

There's a very good Folding Ideas documentary you could watch that explains the wider context and developments since...

I've watched it. I was asking about the film, specifically.

 

[littlebabyjesus]

The biggest misrepresentation in the film is the idea that the millions made by Gill and others was money taken from the hedge funds. Most of the money was in fact taken from the bigger fools who bought in late.

That makes it dangerous nonsense.

Imagine a film about bitcoin that only followed the early adopters who made millions and made out that they were taking down the banks by doing so. That's the equivalent take.

 

[Rob Ray]

Sounds like a Big Short clone with weak research

 

[Fez909]

As the folding ideas doc points out, a lot of the people inspired by Gill and his ilk lost money. The film doesn't show these people. Instead it portrays a bunch of people who made money by getting in early and keeping faith in Gill. As with all pyramid schemes, the early adopters make money from the late adopters, the 'bigger fools'. And the central message - that the involvement of the 'dumb money' of ordinary people democratises the stock market and gives people a chance to make money they deserve to have - is dangerous nonsense.

So your criticism of the film is it didn't cover things that happened after the film's topic ends (the Keith Gill story)?

He had no thoughts of a short squeeze and no expectation that it would hit 100x what he paid for it.

Provably false. See this, from nearly a year before the squeeze:

 

[littlebabyjesus]

So your criticism of the film is it didn't cover things that happened after the film's topic ends (the Keith Gill story)?

No. The price of GS 'went to the moon' on the back of a bunch of investors who ended up losing money. That happened during the Gill story, not after it.

 

[Fez909]

The biggest misrepresentation in the film is the idea that the millions made by Gill and others was money taken from the hedge funds. Most of the money was in fact taken from the bigger fools who bought in late.

That makes it dangerous nonsense.

Imagine a film about bitcoin that only followed the early adopters who made millions and made out that they were taking down the banks by doing so. That's the equivalent take.

If it was a film about Bitcoin, it would be misrepresentative, but if it was a film about the early investors, which is what Dumb Money is, then I don't see the problem.

It's not a serious film. It's a comedy. And seems to portray events as they actually happened

But, as I said, I've not seen it, and have no reason to defend it. Was just curious what made it shit (in your view)

 

[littlebabyjesus]

It's not a comedy, and portraying a pyramid scheme as if there were only winners (except for the evil hedge fund who deserved to lose) is not portraying events as they actually happened.

 

[Fez909]

No. The price of GS 'went to the moon' on the back of a bunch of investors who ended up losing money. That happened during the Gill story, not after it.

Melvyn Capital lost billions. I doubt that the Gamestop investors on Reddit spent anywhere close to even 1 billion on stocks.

And so what if "investors" lost money. Boo hoo.

 

[littlebabyjesus]

Melvyn Capital lost billions. I doubt that the Gamestop investors on Reddit spent anywhere close to even 1 billion on stocks.

And so what if "investors" lost money. Boo hoo.

By 'investors' I mean the plucky dumb money people, not the hedge funds.

I don't think you understand what happened here at all.

 

[kabbes]

So your criticism of the film is it didn't cover things that happened after the film's topic ends (the Keith Gill story)?

I don’t have a criticism. I haven’t seen the film. The only time I’ve even heard of it is on this thread.

Provably false. See this, from nearly a year before the squeeze:

In that 240 second video, he spends 210 seconds of it explaining why GameStop is undervalued purely based on its fundamentals. In the last 30 seconds, he throws in some technicals about why growth via fundamentals could be accelerated as a result of short positions. That’s not the same as suggesting that a short squeeze is on the cards, and it’s a long way from the kind of mythologising that has happened since.

 

[Monkeygrinder's Organ]

I sort of get taking a 'play with fire, get burned' attitude to those losing money but it's hard not to follow that with the conclusion that the winners here were worse people. Plucky underdogs taking on the powerful isn't really a narrative that stands up afaics.

 

[littlebabyjesus]

Plucky underdogs taking on the powerful isn't really a narrative that stands up afaics.

No, it doesn't stand up. And the FI doc points out that while one hedge fund may have suffered, plenty of others have made money out of the 'Apes'. They're not a threat to the system. The film's ironic title 'Dumb Money' isn't so ironic after all. Generally speaking, investing in failing businesses is a bad strategy.

 

[Monkeygrinder's Organ]

No, it doesn't stand up. And the FI doc points out that while one hedge fund may have suffered, plenty of others have made money out of the 'Apes'. They're not a threat to the system. The film's ironic title 'Dumb Money' isn't so ironic after all. Generally speaking, investing in failing businesses is a bad strategy.

Yes, the thing is hedge funds lose enormous amounts of money all the time don't they. 'Hedge fund loses huge sum' is just the system functioning as normal.

 

[Fez909]

I don’t have a criticism. I haven’t seen the film. The only time I’ve even heard of it is on this thread.

In that 240 second video, he spends 210 seconds of it explaining why GameStop is undervalued purely based on its fundamentals. In the last 30 seconds, he throws in some technicals about why growth via fundamentals could be accelerated as a result of short positions. That’s not the same as suggesting that a short squeeze is on the cards, and it’s a long way from the kind of mythologising that has happened since.

It's literally a video called short queeze, with an indication of how it might happen. You said, "He had no thoughts of a short squeeze". I'm not making any claims on his primary reason for investing, just that what you are saying isn't true.

I don't think you understand what happened here at all.

I think I have a pretty good understanding of what happened, thank you very much.

Yes, the thing is hedge funds lose enormous amounts of money all the time don't they. 'Hedge fund loses huge sum' is just the system functioning as normal.

It's normal for hedge funds to lose money, but not like this. Otherwise, why the congress appearance, the film, the interest...

 

[littlebabyjesus]

That's the big lie of the film, that the GameStop short squeeze was a heroic transfer of wealth from the billionaire hedge fund class to the ordinary put upon working people class. That's just not true. It was mostly a transfer of wealth from the late adopters in the pyramid to the early adopters.

 

[littlebabyjesus]

I think I have a pretty good understanding of what happened, thank you very much.

Sure. I don't think you do.

 

[two sheds]

Of course this all metastasized into a paranoid conspiracy cult. Another excellent documentary from Folding Ideas:

Certainly worth the two and a half hours. He goes through saying what the terms they throw around actually mean, for example. Seems to me like a lot of similarities to cults. The language is impenetrable and reading their explanations of itself will draw you in because you start to think in those terms. The more they get drawn in the more they have to lose by the recognition it's bollocks.

I'm not keen on the sound of that film. littlebabyjesus would anyone watching the film be tempted to get involved do you think? Apparently quite a few of them started lying to their spouse and family about how much money they'd thrown away, and any film should really show that.

 

[littlebabyjesus]

I'm not keen on the sound of that film. littlebabyjesus would anyone watching the film be tempted to get involved do you think? Apparently quite a few of them started lying to their spouse and family about how much money they'd thrown away, and any film should really show that.

It doesn't show any of that. It follows the lives of Gill and a bunch of people who watch his channel and invest because of it. And keep 'diamond hands' because of him. All of them come out at the end on top. Meanwhile, the hapless hedge funders are flailing around not knowing what hit them.

Don't watch it. I've watched it so that you don't have to.

ETA:

To give you a feel for the vibe, Gill's followers are: two students who are drowning in debt, a nurse working through the pandemic and struggling to provide for her children, and a kid who works at a GameStop store, is put upon by his crappy boss, and dreams of better things for himself and his immigrant parents. Meanwhile, the hedge funders have relocated to Florida mansions to see out the lockdowns in luxury.

 

[Rob Ray]

I sort of get taking a 'play with fire, get burned' attitude to those losing money

I mostly just feel sorry for them tbh. People taking bad decisions in the vague hope that they'll be lifted out of their misery and too proud to admit those errors, thus making more. The truly pathetic thing about it being they think they're rebels, rather than the system's truest (albeit unloved) children.

 

[two sheds]

Yes much as people who get addicted to gambling.

 

[emanymton]

I mostly just feel sorry for them tbh. People taking bad decisions in the vague hope that they'll be lifted out of their misery and too proud to admit those errors, thus making more. The truly pathetic thing about it being they think they're rebels, rather than the system's truest (albeit unloved) children.

I'm probably a total bastard but I really don't feel sorry for them at all.

 

[Ming]

Interesting interview with Brett Christophers. He's an academic and has written a book on asset management organisations. Never heard that term before. Book's called Our Lives in Their Portfolios: Why Asset Managers Own the World so that's me sorted for Xmas reading.