Gamestop?

[Montecfo]

I wouldn’t call it a non-event. It had plenty of entertainment value for us retired folk.

Can't argue with that. It is great theatre.

 

[LRDave]

My hope is that the post mortem will let us know who won and who lost - and by how much. It's mild curiosity on my part and I have no dog in the hunt. I don't particularly like any of the players. I do think there may be lessons to learn and hope folks learn them. I hope what ever is learned leads to more stability for us long-term investors - but I'm not counting on it. YMMV

I find the rise of Reddit as such an influencing platform as the most interesting story here for me. Upvotes, awards and gold drown out a full dialogue. It took some work to seek out dissenting ideas on WSB.

We also discovered exactly how high the moon was....

 

[arbeadub]

My knowledge of history is superficial but this reminds me of the story of an investor [JP Morgan?] who got a stock tip from a shoeshine person and realized that the market was due for a major decline in 1929. With hyper inflation on the horizon a lot of money will be made and lost in the turbulent times ahead. The only thing I have done is a Roth conversion of some real losers in my TIRA that if they get in a short squeeze I can take advantage of with lowered tax consequences.

 

[Koolau]

My knowledge of history is superficial but this reminds me of the story of an investor [JP Morgan?] who got a stock tip from a shoeshine person and realized that the market was due for a major decline in 1929. With hyper inflation on the horizon a lot of money will be made and lost in the turbulent times ahead. The only thing I have done is a Roth conversion of some real losers in my TIRA that if they get in a short squeeze I can take advantage of with lowered tax consequences.

Care to share your thoughts on hyper inflation? I've been expecting it for 50 years and so far, the 70s/80s is as close as we've come. Not saying "it can't happen" just wondering how we would know that "this time it's really different." As always, YMMV.

 

[bobandsherry]

Probably $25 by the end of the day. The hedge funds appear to be out of the woods...at least the ones that didn't blow up earlier. Well, that was fun. No new rules needed.

Didn't quite get to $25, but it's definitely doing the double digit dance Closed at $90 and down to $85 in AH. If I were to guess, the hedge funds wiggled out of this with Puts and riding the profit wave as the stock dropped significantly since this stock lacked fundamentals to support the price. Interesting to watch from the sidelines.

 

[arbeadub]

Koolau, my thought is while there is no history being repeated it is rhyming with the end of WW2, national debt growing, Companies that were ramped up for production to fight covid should be turned loose for more growth, the relief of getting to a new normal. We will be busting out all over, rampant growth, money sitting in the bank will be worth less in buying power if it is not spent now, money used to buy stock in good companies will probably out pace inflation, I wish I knew which companies that will be.

 

[Exchme]

Last week, the WSB'ers were sharing charts of VW's stock from 2008 to convince themselves that it would melt up further, but none of them ever noticed that the melt up lasted a very short time and that the vast majority of folks probably didn't get out at the top, but rode it back down. Today over at reddit there are stories of people that lost their life savings on GME.

I just want to shout at them to quit gambling and use the proven path of low cost, broadly diversified index funds, like a total market fund from Vanguard, Fidelity or Schwab. They will go to the moon over time too.

 

[Jerry1]

You'd think that with all the hype that the one thing that Gamestop could have done was to acquire more PS5's. That might have at least kept the stock value up for awhile. I've been trying to score a unit since they came out and no luck now how.

 

[NW-Bound]

Now, we learned that not all hedge funds bet against Gamestop. Senvest Management bought into Gamestop last year, long before this short squeeze happened, and owned 5% of the company in Oct 2020.

On the average the fund paid less than $10/share, and wisely bailed out when the price hit $400/share. It made $700 million. Not everyone hangs on waiting for the price to hit the moon.


See: https://www.msn.com/en-us/money/com...-musks-gamestonk-tweet/ar-BB1dn72g?li=BBnbfcL

 

[Koolau]

Now, we learned that not all hedge funds bet against Gamestop. Senvest Management bought into Gamestop last year, long before this short squeeze happened, and owned 5% of the company in Oct 2020.

On the average the fund paid less than $10/share, and wisely bailed out when the price hit $400/share. It made $700 million. Not everyone hangs on waiting for the price to hit the moon.


See: https://www.msn.com/en-us/money/com...-musks-gamestonk-tweet/ar-BB1dn72g?li=BBnbfcL

I guess that's the difference between the professionals and we of the "great unwashed." Nice to know someone bet correctly as YMMV.

 

[sengsational]

It's $80 now and the yahoo finance performance prediction is green up arrows for 6 weeks out and long term I think the buy-out offer from the first few posts of the thread was $20 or something. I can't imagine they were offering 1/4 of what it was worth.

 

[jim584672]

Just tapped $70. Where is the squeeze?

 

[JoeWras]

It is at $71 now. Yesterday it held pretty steady.

Man, looking at that chart brings back all kinds of bad memories about my megacorp during the tech bubble. Days like yesterday (hold steady) were huge head-fakes that got us to hold on, because "tomorrow it will go up." Ugh, just bad deja-vu.

 

[Music Lover]

I guess that's the difference between the professionals and we of the "great unwashed." Nice to know someone bet correctly as YMMV.

It went both ways for both groups...some professionals made or lost money and some amateurs made or lost money.

 

[finnski1]

It is at $71 now. Yesterday it held pretty steady.

Man, looking at that chart brings back all kinds of bad memories about my megacorp during the tech bubble. Days like yesterday (hold steady) were huge head-fakes that got us to hold on, because "tomorrow it will go up." Ugh, just bad deja-vu.

Make that $68. Scratch that $67. I mean $66.

 

[LRDave]

$58 - wonder if there will be a support level that will show up in today's trading?

 

[JoeWras]

Don't know where support will be as long as you still have people working for a greater cause, real or not.

It sounds like the deepflipping guy has a bit of light shining on him right now. I would guess some of those less attached to the cause are bailing because of that.

 

[garyt]

I guess that's the difference between the professionals and we of the "great unwashed." Nice to know someone bet correctly as YMMV.

Really , those professionals weren't so smart, they got lucky. They were holding a dead stock and the crazies at WSB's not only bailed them out but gave them a windfall.

 

[NW-Bound]

As I mentioned earlier, shorting these stocks at their ridiculous high seems lucrative, but not easy to borrow shares at that point, plus the high risk. And the closest thing to shorting I have done is to buy puts, but the premium on GME was outrageous as I described, and did not leave me much room for profit.

But, but, but, yesterday I looked around among the few stocks that popped the most in recent days. I do not go to reddit, but spotted BBBY (Bed Bath and Beyond) among the poppers. And the puts were not too expensive, so I bought 1 PUT 40 Feb 5 for a lark. I was prepared to lose all of the $600.

BBBY surged to as high as $53 yesterday (from $20 a week ago). It is dropping, and at $32 now. I have gained enough for a few XO bottles.

My real gains hopefully will be from purchases of other "innocent" stocks that people sold yesterday. I made a 6-figure commitment there.

PS. Will I make enough from that lousy single PUT to have enough for a jamon iberico ham in addition to the XO? I guess I will hang on to the put for a few more days to find out. The option expired next Friday.

I bought the single PUT BBBY 40 - Feb 5 for $6 on last Wed, Jan 27, when BBBY was trading around $50. The stock succumbed after that, and today it is down to about where it was before all this Gamestop short squeeze started.

Rather than wait till tomorrow when the option expires to see if I can get a few more bucks, I sold it today for $13.20. BBBY closed today at $27.01, so I sold the put at about its intrinsic value.

Minus the $0.35 x 2 for the option opening and closing trades, I netted $719.3 after 1 week, with a few mouse clicks. It's a decent gain, but I could have lost the entire $600.

What should I do with the $719 gain? A bottle of Hennessy XO is $200. The remaining $519 is not enough for a leg of jamon iberico de bellota, but can pay for 2 legs of jamon serrano.

But the truth is I still have 1/2 dozen of XO bottles that I was gifted, and do not need to buy more. And my wife will say "how long do you think it will take to eat all that jamon by yourself?" She does not eat much meat.

So, I guess that was just a mental exercise, and I will leave that play money in the "general fund". Pretty dull, I know, but my life has been that way for a while.

 

[calmloki]

 

[Fermion]

What should I do with the $719 gain? A bottle of Hennessy XO is $200. The remaining $519 is not enough for a leg of jamon iberico de bellota, but can pay for 2 legs of jamon serrano.

Buy a stock market lottery ticket!

BLUE (bluebird) has a decision by/on March 27 for ide-cel.

A positive on this should pop BLUE to the $70 to $90 area (it has traded well above that before).

Hmm, for $700 though all you could buy is one May $50 call for about $6.50

Not super exciting...if I am not losing $10,000 a day now I am bored.

 

[JoeWras]

gme is up today.

This is how my brain worked in the tech bubble. "Oh good. It's back. I'm going to hold because this is just the start of the recovery. It has to return."

This "hold for recovery, yet still ride it down" went on for months while I watched the pool evaporate 70%, even though there were more downs than ups.

In the end, it is all fake if there are not fundamentals, or at least a strong hope for fundamentals.

 

[sengsational]

My dad taught me that many (not all) gamblers blew the dough on winning and stayed mum on the losses. He had a card in his wallet with his weekly poker gains and losses. More losses than wins, but the wins were big enough to more than offset the losses. It was a 'friendly' game, mostly an excuse to drink and smoke cigars (my dad did neither). But I digress. The point is that one might consider netting losses before blowing the dough. And it can be hard to do in this kind of trading because it seems that success means avoiding the rare really bad trade. I knew two guys that thought they could trade for a living and both tell the same story...they made money on nearly every trade, or at least lost peanuts, but then there were those one or two trades that blew 6 months profit. Both went back to work for the man.

 

[NW-Bound]

Buy a stock market lottery ticket!

BLUE (bluebird) has a decision by/on March 27 for ide-cel.

A positive on this should pop BLUE to the $70 to $90 area (it has traded well above that before).

Hmm, for $700 though all you could buy is one May $50 call for about $6.50

Not super exciting...if I am not losing $10,000 a day now I am bored.

Never heard of BLUE, and I don't feel like looking into it now. I make speculative plays frequently with options, but stick with blue-chip stocks mostly. I don't even do Tesla or companies not making money.

Even with blue-chip stocks, my portfolio was down $169K in a single day last week when GME rallied and the market tanked. That's enough for me to pay attention.

PS. My blue-chip put options got in the money last Friday, and made me buy $200K in stocks last Friday. The above does not happen frequently either.

PPS. And I still have more put options out with expiry Feb 19. If the market goes down more, that's a few more hundred $K going from cash to stock. That's enough for me to watch.

 

[NW-Bound]

And speaking of options, I mostly sell options, either calls or puts, and not buy them. The few times I bought options, I always lost all of it. I guess I never commit that much money when buying, hence just let them expire worthless instead of trying to cut loss and sell them.

My recent buying of the BBBY put is the only time I bought an option and it made me money!

And I just remember that just last Friday was the expiry of my GE LEAP calls at $12. GE is trading at $11.70. I paid $1K for these calls in 2018. A total loss. So, that's more than my recent win with BBBY. I guess I really have nothing to celebrate.

As mentioned, I made a lot more money selling covered calls and puts. I collected more than $300K last year in option premium. This year, due to volatility I have been more active, and collect $50K in premium YTD. Of course there's a risk of selling my shares "too cheap", or having to buy a lot more stocks.