Lurker > red sox 777

CoolCly posted...

reddit's talking about how ETF's that hold gamestop are massively shorted right now, like the hedgefunds covered GME but replaced it with ETF's holding GME in some kind of neutral move

But the prices for the ETF's don't really seem like they'd be effective at that at all to me

I guess it could be possible with extreme leverage? But not sure what it gains them.

Suppose I have $100 to short GME. I could use it to open a short position in GME of $100. I see there is some ETF that holds 100 stocks, including GME. To gain the same short exposure to GME by shorting that ETF, I would need to short $10,000 worth of it. So I borrow $19,800 so that I now have a total of $19,900. I spend $10,000 shorting the ETF and I spend the other $9,900 buying $100 each in the other 99 stocks in the ETF. I now have a net position equivalent to the original $100 short position in GME, by using 199x leverage.

Now let's say GME goes to the moon and reaches $1,000 (20x). The other 99 stocks stay where they are. That ETF will rise about 20% from this. So a 20% loss on $10,000 is.....$2,000, or 20 times my equity. So I still go bankrupt. I still get margin called long before this. Not sure what I've gained here, other than maybe disguising the short position.

So yeah, this feels like grasping at straws.

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Vote away!

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I have decided to give up on gold mining. I've gained about 12% on AU, which I first bought in November, but at this point I am thinking crypto is going to eat gold's lunch. Might end up having a Netflix/Blockbuster relationship.

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I'm siding with Bill Clinton on this. Even if he did commit perjury, I don't think that is an impeachable offense unless the perjury had to do with his public duties. If he committed perjury about his private affairs, that doesn't rise to the level of an impeachable offense in my eyes.

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The thing about doing this 100 times, is that you're probably eventually going to hit a company like LK that doesn't release earnings, and instead announces they've committed fraud. Then it gaps down 80% at open the next day. Absolutely it can go down much more than 10%. I agree that this strategy is probably profitable but it is absolutely not low risk.

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Nanis23 posted...

I know, which is why I am not doing this anymore. I just wanted to give an example of my beginners luck

My best gain (ever) was Teva after earnings in January 2020. I went in before the earnings with a whooping $30k. Teva killed it, and went from 9.17 to 10.54...in two days. Yes, I held $30k over two days.
Total gain was 10% and it was..nice

That day was my peak lmao. Everything after that sucked and the next time I tried was 10 days after that and I lost 20% doing the same thing
Then a few days later a market crash happened

I want to say "I learned from my mistakes" but is getting traumatized considered learning?

That depends on what you're learning. A lot of people lost a lot of money in the 1929 crash and what they learned from that was to never invest in stocks again, which cost them a lot of money over the next few decades as they missed out on big gains. It sounds a lot like the same may happened to you with the Feb-March 2020 crash.

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If you have to hold companies that go down, this probably loses a lot of its power. I think the way to play it is to sell no matter what the day after earnings and reinvest into another company before earnings. But yeah, I'm skeptical this would do better than just buying and holding companies you really like long term.

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Previous Results:

Reagan - 72.7% FOR impeachment.
Bush 41 - 52.9% AGAINST impeachment.
Clinton - 50% TIE.

Should the younger President Bush be impeached?

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Jakyl25 posted...

The fact that they technically can do that and theres no check on that power aside from packing the court is a real doozy

They would just be ignored in that extreme case. That was how the framers expected things to work - and I think George Washington vetoed a bill because he personally thought it was unconstitutional, so it's clear constitutionality was not something the framers thought was supposed to be left solely to the courts. Every government official is responsible for upholding the constitution. SCOTUS has spent 200+ years establishing their reputation for reason and impartiality, but that reputation can be lost if they were to actually do things like declare themselves a dictatorship.

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Jakyl25 posted...

That leaves open the possibility that they could overturn precedent and decide they DO have that power though, right?

But that does seem to indicate that, until otherwise brought to the SCOTUS, the current status is that they do not have power to make that judgment

In the way that SCOTUS could conceivably decide that all previous justices were very far off the mark and reinterpret the constitution to mean that actually the country is a dictatorship run by SCOTUS. Such an action would itself be a constitutional crisis.

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Corrik7 posted...

Wrong.

Would be happy to entertain this argument if you have one.

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Nanis, what you are describing (buying stocks blindly after earnings) sounds like pure gambling. Moonroof's strategy of choosing stocks to hold through earnings has better reasoning.

https://www.nber.org/system/files/working_papers/w13090/w13090.pdf

Per this research paper, there historically has been (keep in mind their data ends in 2004) a small premium to buying stocks and holding through earnings. They calculated the advantage at around 0.6% for holding for a month around earnings (vs. holding a stock not declaring earnings that month). That works out to about 7.4% per year if you repeat this 12 times with compounding. They don't have data for holding for one single day across the earnings announcement though.

That said, this paper is from 2007 and I'd be shocked if a lot of banks/hedge funds/quants hadn't discovered the earnings premium ages ago, which would reduce it. Although, the authors of the paper believe that it is mostly retail traders driving the earnings premium.

So I am considering setting aside like 5-10% of my portfolio to try this strategy of plunging the money into earnings, repeatedly and sequentially, day after day with a different company announcing earnings that day. The downside would be that that money is not being invested in companies I actually believe in, since it's constantly being cycled through companies announcing earnings. Another downside is that this feels like a ton of work for probably not very much reward.

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red13n posted...

No, I'm not.

I'm telling you that the Senate voted it was constitutional to proceed. Whether the Supreme Court thinks it is or is not is irrelevant to the proceedings.

This is correct. The Senate is the highest court of impeachment. There is no appeal from its decisions. The Supreme Court does not have the authority to overrule the Senate on impeachment.

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Jakyl25 posted...

In the hypothetical event that Trump was convicted here, SCOTUS absolutely would have been called to make that determination down the line I imagine

Actually, I don't believe SCOTUS has the jurisdiction to decide that issue. The Senate is the only body with the authority to make that call. If it went to SCOTUS, I am pretty confident it would be a 9-0 ruling or something close that SCOTUS lacks jurisdiction to decide this.

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masterplum posted...

If everyone really is entrenched there isn't anything to gain over dragging the trial out another week other than possibly creating war weariness among people who aren't bloodlusting for trump.

Unless you thought witnesses would actually change anything (hard sell), I don't think skipping witnesses is a bad thing.

It's important to have the trial in public to show the people the evidence. This is going to look like, the Democrats didn't call any witnesses because they had no evidence, or they knew the witness testimony was going to hurt their case. Whether or not that is the case, that is what it is going to look like. Trump is going to loudly proclaim he was completely and totally exonerated, and that the whole thing was a witch hunt.

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Or not. Dems are a joke for not going through with the witnesses after they won the vote to do so. The R position that there is no jurisdiction is consistent with not calling witnesses - if the Senate lacks jurisdiction there is no reason to have any further proceedings. The Dem position is just throwing in the towel. So we are going to have 2 impeachment trials, both without witnesses and both ending with Trump being acquitted.

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Apparently Coinbase is doing a direct listing. Hopefully this will get rid of the ridiculous first day surge.


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Previous Results:

Reagan - 72.7% FOR impeachment.
Bush 41 - 52.9% AGAINST impeachment.

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Apparently the Dems are not calling witnesses? If so, what a joke that is. What kind of prosecutor attempts to win a case without calling any witnesses? At least put on your case, and if the jury disagrees, they disagree.

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SPCE announced they are delaying the test flight to perform additional checks. Well, glad I sold off a bunch of shares yesterday instead of waiting for today. Not too worried about my remaining shares that I intend to hold through the launch - whether the launch happens sooner or later, the timing ultimately matters little. The result matters a lot. Unless you bought short-term calls, in which case, uh, too bad for you.

GME volume has fallen off the face of the earth - just 12 million yesterday. So far today we are under 5 million.

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In the previous poll, 72% of voters thought that President Reagan should be impeached. Today, we consider the first President Bush.

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masterplum posted...

But how much GameStop did he buy you

None.

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So based on that data from the NYT, it looks like the "time in market" that really matters is the time you are invested when the market is closed. If you think about it from the point of view of risk premium, it makes perfect sense. During market hours, you can immediately close a position if you want, so the risk is lower than overnight when you can't close the position until morning and it may gap down a lot at open. I was always puzzled by the statistic that a really high percentage of daytraders lose money, but this would be another good reason why! They're not actually earning the risk premium if they aren't holding overnight.

On a different note, I checked the account someone else is managing for me today. Happy to see they are also up a nice percentage over the past few months (although not as high as mine), and we don't currently have any of the same stocks. I am a little surprised at there being no overlap given that we each have around 15 stocks. Some of the trades have included stocks I would never choose if I were making the decisions. But, that's the point of independently running these accounts - it's an additional layer of diversification.


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https://www.nytimes.com/2018/02/02/your-money/stock-market-after-hours-trading.html

This article confirms what I was thinking. It turns out that historically virtually all of the gains in the stock market occur overnight. The S&P 500 was actually slightly down over 25 years from 1993 to 2018 if you only count movement during market hours!

I think it makes sense because there are day traders who fear holding overnight, so they will sell shortly before close so that they don't have to hold overnight....driving down the prices at close.

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StartTheMachine posted...

HOLD UP FOLKS

How the hell did I miss that TN is on the list of 7 states without state income taxes!? That's where I am! :O I know every year I do my taxes, I've never had to fill out my state taxes but I thought that was just because I never made enough for it to matter or something lol

Does this mean I pay 0% on all income from stocks!? Or do I still pay capital gains rates at the federal level? If I pay absolutely nothing in taxes from my gains I think I'm gonna cry

You still pay federal taxes. But not paying state taxes is big savings.

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Yeah, basically what you want to protect yourself against is dumping 100k into Luckin Coffee before the fraud announcement, or Enron, or BP the day before the Gulf of Mexico spill, or something like that. 99% of the time, nothing like that will happen but if you are moving huge amounts of money sequentially into stocks, eventually you'll hit a company like that that gaps down 80%+ and wipes out all previous gains. It's playing roulette (supposing they gave you fair odds) by covering every number except 0. Almost all the time, you win a little bit. But eventually 0 hits and you lose a lot.

I really hope this doesn't happen to you. And the way to make sure it doesn't, is to never invest more than half your portfolio in any one thing. It doesn't matter how short a period of time you hold it, the risk of a fraud/bankruptcy/disaster announcement is always there.

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And uh, he must have been saving money. As opposed to spending it.

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Moonroof doesn't diversify. He puts large sums of money sequentially into a small number of stocks for short periods of time. So far this hasn't bit him but if he's going to play ERs like this, he's almost certainly going to get hit eventually with a big gap down loss on bad earnings.

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I feel like on average the strategy of holding through earnings should be +EV. That's because it is risky and therefore you should be rewarded with a risk premium for doing it. Like, we know that generally time in market (time your money is at risk in the market) drives returns, but I don't know that it's actually time that's doing the magic but rather new information. So buying right before earnings may be a way to get a lot of "time in market" without actually being invested for that much time. You are bearing the same risk as far as new information goes so you should get the same reward.

That said, when I tried this last Summer, I went something like 0 for 8. Every company I tried to hold through earnings went down. Then I gave up. Maybe I was unlucky or maybe I'm really bad at picking companies for earnings releases.

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SPCE with another great day. My limit sell orders for SPCE all filled today, and I have now sold off exactly half of the shares I once had in preparation for the launch scheduled for this weekend. I had to get the amount of money at stake down to a level where I can handle the tension of this launch.


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ChaosTonyV4 posted...

https://twitter.com/drjasonjohnson/status/1359701976049541120?s=21

What does this MEAN

He's retaking the word liberal for its meaning through most of history. Like the Liberal Democrats in the UK. It excludes the left.

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I'm going to just submit a limit order and hope for the best. My feeling is that even if it does the usual absurd gap up, it will still have a lot of room to run. Crypto can still do something like 10x before equaling the market cap of precious metals, and I'm fairly bullish on precious metals too relative to the dollar.

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I guess even more accurate would be FPO - Final Private Offering. After that, it is publicly traded.

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IPO - Initial Private Offering. That would be more accurate!

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But people wonder why SPACs are so hot right now, and it's because of these absurd IPOs. An SPAC actually lets people get in early.

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From what I've heard, if you have a lot of money (like 500k+) invested at a higher end brokerage, you may be able to get a small IPO placement (a few thousand dollars). I guess if you are the 1% you can probably get a bigger placement.

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The market may one day stop buying these new companies, but that day is not today. (It could be the day after all the bears have finally given up).

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Do you mean buy the dip? Selling the dip sounds like losing money...

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Can someone explain to me why AVCT plunged below $1 in the Spring of 2020? I don't get why an SPAC would plunge like that.

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trdl23 posted...

Then you would damn well know the hardest part of Calc 1 is the algebra. The actual calculus is pretty easy, but it doesn't mean crap if you don't have solid algebra behind it.

My view on this is that there are going to be kids who could do the math without a problem but are saddled with earlier math classes that teach it in a very boring way. As a result, they are bored, perceive math as boring, and don't learn. When they don't learn, they are shunted off to lower level classes that are even more boring, and they learn even less. Give them a harder, more interesting, class, and they can learn.

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trdl23 posted...

This sounds like somebody who's never done Calculus.

I actually did a major in math (and economics).

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Your losses can be deducted from your gains. If your losses exceed your gains you can also deduct $3,000 a year from your regular income until your losses are exhausted.

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Vote away!

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I will say for me personally, the idea of not being able to take the money out for 35ish years is really not appealing. I want to buy a house(s) before then. And I don't mind paying a bit more in taxes if I do well in the market.

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Yeah you don't have to worry about the taxes in retirement accounts, but you also can't take the money out before you reach retirement age without incurring rather severe penalties.

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Note, if it were solely up to me, I'd seat 60% of the class based on test scores and 40% based on lottery. People who do well in school have enough advantages in life, so I wouldn't assign them any additional seats based on that.

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LordoftheMorons posted...

There is a minimum level of qualification necessary to be able to handle the curriculum at these schools. Is it wrong to not let kids who havent finished algebra into a calculus class?

And not all differences in academic ability boils down to a difference in resources. There are high achieving poor kids and low achieving rich kids (including those whose parents have pushed them). You can account for differences in opportunity without flipping the table over and going to a lottery, leaving the most of the most talented kids of all backgrounds to go to their base schools because they werent lucky enough.

There are definitely kids who would thrive in a calculus class who haven't finished algebra. I think the way I would have it is, these magnet schools can be partially filled by test scores, partially by in-school achievement, and partially by lottery. Maybe 1/3 - 1/3 - 1/3?

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Yeah. It's the difference between the short term capital gains and long term capital gains tax rate. I'm happy to report that getting on the phone with my broker last week likely saved me a few hundred dollars. When I was selling some SPCE shares, I had forgotten to manually select shares to sell, so it defaulted to FIFO.....meaning it would sell my low cost basis shares from last Summer rather than the shares I bought with GME profits 2 weeks ago. That would result in higher realized gains and short-term tax treatment (assuming I hold my remaining shares until the one year mark is passed)! Fortunately, they were able to change the tax lot selection as long as I called before the settlement of the trade.

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LordoftheMorons posted...

Yes, hence my parenthetical about selection effects. A lot of the students who do register will do so because their parents made them (because the school is more prestigious), and there will be no opportunity to figure out which ones are not prepared besides them enrolling and finding out that they cant handle it. And even of the kids who do want to go youll be getting a group thats on average less qualified.

The words you are using sort of exemplify the problem with the system- "prepared" and "qualified." Which kids are going to be prepared and qualified? The ones who have parents who have been preparing them from an early age - i.e. generally wealthier families.

It's a really terrible to thing to tell a child that they aren't qualified, when the reason for that is that their parents are poor.

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LordoftheMorons posted...

These schools are not appropriate for most students and can be very stressful places for those insufficiently prepared or interested. I went to a magnet school and loved it, but there were some kids forced to go by their parents who would have been much happier at their base high schools. If Im not misreading Tony was identified by testing, which seems like an example of the system working?

With the lottery, even the absolutely most qualified students who would be absolutely wasting their time at their base high schools are in most cases rejected. Furthermore, the reason these schools are good in the first place is primarily not because theyre given more resources or have the best teachers; its the accumulation of the critical mass of students necessary to offer more advanced coursework. If the students are the same as in any other school in the district the concept falls apart and youre not even offering anything special to the students who were lucky enough to attend.

(It probably doesnt collapse entirely to a normal school because of selection effects, but a lot of the kids applying will be doing so because their parents made them anyway).

There are many kids who would thrive at a more challenging school who won't be selected to go there because the system misses their potential.

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