I liked your response here. Here I'm addressing the parts that I disagree with, but I read through your entire post and agreed with like 90% of it so I just didn't respond to those parts that I agreed with. Some of my "disagreements" here are really just extra analysis.

This little bit of winning produces a euphoria in the player making the person more oblivious to the facts, which are that the probabilities ensure the more skilled will win in the long run, just like the probabilities are slanted for the house in the casinos. That's the emotional weakness, similar to dreaming about winning the lottery. — Metaphysician Undercover

I get what you're saying here. We should take note here that a live environment is different from an in-person environment, and while one player may have an overall better sense of the game at a fundamental level and excel at online play, live dynamics can muddle the waters a little bit and bring in an extra element that allows worse players to step up their game in other ways to even the playing field. A highly skilled player could also overestimate their edge and that could serve to their detriment.

Also a lot of players are just playing to have fun or pass time, not necessarily to win money. I personally was not playing with the goal of winning money when I played semi-professionally, my goal was always to play my best game. If the money comes then it comes but it was never a guarantee.

And as a trader you would know that the small money is made when the market rises, and the big money is made when the market drops. — Metaphysician Undercover

This I would question. Traders can make money either way. Insane amounts of money are made when markets are doing well.

It may be easy for someone like you to say, "those people should not be playing that game". However, those people are the suckers, and if they weren't playing the game, the rest of you wouldn't be making the easy money. This just requires that you adhere to some fundamental principles while letting the emotional ones make the mistakes. So it's clearly a matter of the reasonable people taking advantage of the unreasonable, where "unreasonable" is defined by an emotional weakness. — Metaphysician Undercover

This can certainly be the case, but it's not always the case. Two emotionally-balanced players could be playing and one could just be using better strategy than the other. The player that is using better strategy could (and often does) still lose though. Edges can be quite small and only expose themselves over thousands of hands.

But by and large, yeah, poker is often about exploitation and if you're 100% opposed to exploitation and want to maintain moral purity at all costs you probably shouldn't be at a poker table. You probably shouldn't be in business either. You might make a good philosopher though who can provide sweeping moral judgments over areas that they have zero personal experience with.

Don't trade on margin then, which is basically borrowing money. People who complain about margin calls or close outs shouldn't be trading at margin anyways. Comes with the territory. — Benkei

No! I stand with your average mom and pop investor who comes home from their 9-5 on payday, paycheck in hand, and decides to 10x leverage long AMC at $15. They don't use a stop loss because liquidation is their stop loss. But then evil traders come and manipulate the market and these poor Americans are forced to sell. The whole thing seems very immoral to me.

People who are successful are so because they have the motivation to be such.
— synthesis

This is just right wing propaganda, though. There's no actual truth to it; it's just something privileged people promote to justify the perpetuation of their privilege. Viz:

https://youtu.be/bJ8Kq1wucsk — Kenosha Kid

The truth is somewhere in the middle, no? Some successful people literally just inherit their money or succeed with an investment or use their parent's connections to land a sweet job, but others genuinely do grind and hustle and those are the ones you gotta admire. There are plenty of examples of both and plenty of successful people who are borderline admirable.

So an observer's opinion is not worth anything? One must actually participate in the activity to make a judgement about it? Do you think that one must participate in murder, or theft, before judging that there is no place for these activities in our society? — Metaphysician Undercover

Sure you're an observer - and I don't mean to be offensive or rude here - but you don't really seem to be an observer who really knows quite exactly what's going on in financial markets. I'm certainly not claiming to be an expert either and there are plenty of discussions where I'll be lost, but the difference between us is that I'm less inclined to make these kinds of overarching judgments. Before trading I was a semi-professional poker player so I'm just not that interested in hearing someone's take on why poker is wrong. According to who?

I'll ask you the question I asked earlier in this thread: What is the difference between buying a stock at $200 and selling it at $300 and buying a piece of artwork at $200 and selling it for $300? Why is one okay but not the other?

If Metaphysician Undercover is also against "hoarding", "stockpiling" and gambling then I can't imagine it's worth it to try to convince him to accept trading. Some of his responses to me also lead me to believe that he's never actually traded or used leverage so this discussion would appear to be entirely theoretical for him. For someone who's never really participated in this type of activity to then come down and basically say "the need for the trader has been eliminated" is just drivel to me. As an actual trader who follows other traders no one really cares whether the market "needs" us or whether others morally approve, but you've made some good macro points about how traders do provide value even if when we're doing it we're mostly just out for ourselves.

I wonder what this means for trans men, who I know worry a great deal about their masculinity. Is trans masculinity different from “masculinity”? — Uglydelicious

Yeah, probably, but I'd also figure masculinity looks different everywhere you look. Disabled people also need to square masculinity with their condition; very few men fit the traditional norm. Thankfully there various models of masculinity in the culture or the media that can be emulated, but we could always use more who have their own take on it.

What makes borrowing a stock and selling it any different? It’s not yours, how can you sell it? — Pfhorrest

You're talking about shorting, right? What makes it ok is that all parties in the transaction understand and consent to it. Your broker and who ever is on the other side of your trade understand and agree to what's happening here. If all parties consent, who are we to object?

So is selling a collectible object providing something. — Metaphysician Undercover

Alright so lets say I buy a piece of artwork at $100 and later sell it at $200 - how is that different from someone buying a stock or a commodity at $100 and later selling it at $200? Why is one ok but not the other?

So the trader believes that he is going to make some money. Now what is the service that the trader provides, for which he believes he will get paid? If he's not providing any service, then why should he would get paid? And if he believed that he shouldn't get paid, because he's not providing any service, then he wouldn't be there trying to do "something beneficial for himself". — Metaphysician Undercover

So should people only be paid if they provide services to others? Should winning poker players not be paid? Do you believe gambling should be banned? What about passive income from investment? What about someone who just wants to sell a collectable item?

What do you mean "the trader requires payment?" The trade doesn't happen unless there is a buyer and a seller, both of whom believe that he has done something beneficial for himself upon doing the trade. By the trade happening its fulfilling both sides wishes.

Ok so you don't believe that people should be able to borrow funds or have lines of credit extended to them, ok. I wonder how many economists would share this view.

What is it specifically that you want to see outlawed or better regulated?

Do you expect me, or anyone else to believe this? What constitutes "a normal market swing" in today's environment? Manipulation is the norm. There is no such distinction to be made, between normal market swing, and manipulation. — Metaphysician Undercover

If you want to be skeptical that's on you but it's happened with me a few times. Sometimes you just set your stop loss a little too tightly and you get stopped out. If you want to know what normal market volatility is they have volatility indexes and measures for that type of thing so I'd direct you there. If you want to say 'everything is manipulation' that's on you and it kinda of blurs the distinction between actual misdeeds and normal buying and selling.

Blame implies wrongdoing. To admit to myself, I made a bad investment, I lost money, is not a big deal. To think that some traders cheated me out of my investment is a big deal. Notice it's "to think that some traders cheated me...". When people start to point fingers at wrongdoing, then the truth or falsity of this or that particular instance doesn't even matter anymore, just like for the Trump supporters who thought that they got cheated out of the election. — Metaphysician Undercover

I think the truth or falsity of the accusation genuinely does matter here. If there was actual fraud or something criminal behind the scenes then investors/traders absolutely have a right to be upset. However, if a whale simply decides to buy or sell today and traders get stopped out when they were using high leverage then it's hard to feel bad for them because they willingly went out of their way to take on this additional risk. Traders or investors or whatever you want to call them need to go out of their way to use leverage. Most exchanges don't even offer it.

It's not always market manipulation either. Some traders or "investors" set their stop losses too close to the price and when it hits those "investors" get "forced to sell" just on normal market swings.

No of course not. Buying a house is a different issue. It would actually be really dumb to buy a house in cash. Regardless of whether we consider using margin/leverage "trading" or just "investing" by choosing it the user has consciously taken on more risk than just holding the asset normally. When you use leverage you must know there's always a chance of being forced to sell.

Ok just replace "speculating" with "trading" then. My point is you basically step into the realm of trader when you start using margin trading/leverage.

A trader losing money could not make a living, and would be gone from the market. But on top of this, all the losing traders, would have to be bringing into the market place all the money required for the winning traders to be making their living. So there'd be an endless supply of losing traders coming in with money for the winning traders. — Metaphysician Undercover

I've heard the statistics that 90% of traders are losing money. But some portion of that figure will probably become winning traders and some portion of the winners will become losers. It's not a static thing where the winners just always stay winners.

I wouldn't be surprised if some portion of those "losing traders" are really just using trading platforms to hedge and are thus happy with their losses (I've been guilty of this.)

In reality, a lot of the money comes from investors who are forced (for one reason or another) into selling at a loss. — Metaphysician Undercover

Why are investors "forced" to sell? Have they hit their stop loss? Do investors face liquidation if the price goes too low? Tell me what is forcing the investors to sell.

But yeah, the investor only really loses if the stock or asset goes to zero. Then you're screwed. If the asset goes to zero then traders can no longer trade it either so they're out of work too for that market.

An investor might think that taking a margin is a smart and profitable way to invest. But if we consider the reasons why an investor would sell when the market is down, the call to cover the margin when the market does drop from an unforeseen event, is reason number one. — Metaphysician Undercover

Yeah, if you take on margin you're taking on a lot of extra risk. Obviously if you go long and the market tanks you will be facing margin calls or be forced to sell at liquidation or your stop loss, but this doesn't apply to people who just buy and hold. Margin holders add that extra feature themselves. Newer traders or investors should stay away from margin.

Still, you cannot avoid the fact that huge market drops are perpetuated by traders then, and there is still a significant number of investors who are forced to sell low, due to prior commitments or whatever other reason, and companies are forced out of business, and the loses from these investors are supplying a lot of money to the traders. — Metaphysician Undercover

Well, sure it could be traders or whales or any big price mover who's looking to either buy or sell is going to move that market and the swings can be pretty wild. That's why you need to extremely careful when using margin and it's not something for newer traders to use. If you just buy and hold you can wait out these price swings and you'll never be forced to sell unless you're investing money that you need for personal use, but that's a whole different thing and we can ask ourselves whether that person should even be investing in something this risky in the first place.

TLDR: If you're using margin you're speculating so if you get stopped out or liquidated don't come crying that "speculators take money from investors" because by using margin you're speculating.

And if traders make money, that money must come from someone. So it's a matter of traders being engaged in a completely different activity from that of investors. And "taking advantage of", means that the traders treat the investors unfairly, because they know that the rules of the market place will allow them to do so. — Metaphysician Undercover

That money is going to come from other traders. So for instance I trade eth and btc derivatives on Phemex (I know we're talking about stocks here but it's the same theme), and when I make a trade I use the Phemex orderbooks so that liquidity is coming from other Phemex traders or maybe whatever liquidity reserves Phemex itself has, but I'd assume mostly from other traders.

When you're an investor that gain or loss doesn't become realized until you sell it. A trader could go short or long, but he's competing against other traders here and his profits are from other traders, not long-term holders who aren't offering their liquidity to the orderbooks.

EDIT: It's also worth noting that in my experience the vast majority of traders are investors themselves. It would be jarring to me to hear from a serious trader who just doesn't invest in anything.

Different sources will say different things about index funds vs. mutual funds. For the sake of clarity and simplicity, index funds just basically track an index (like the S&P 500) while mutual funds are often actively managed by fund managers attempting to beat market returns. Typically mutual funds have much higher expense ratios than index funds.

Hedge funds are less regulated than mutual funds and much, much more exclusive. Much higher barrier to entry.

Here's an article that expands on the differences between mutual funds and index funds.

https://www.nerdwallet.com/article/investing/index-funds-vs-mutual-funds

I find stock investing pretty boring TBH. The basic advice people will give you is to throw everything in the S&P or the Dow and and just capture the returns of the overall market. Things get more interesting when you're able to engage in either newer, emerging markets (like crypto) or more specialized markets like collectibles where people can do their research and find some returns in unexpected places like with Pokemon cards. I personally learn best just by doing, maybe making a few mistakes and learning from those, and then talking with other investors or people in the same space.

Well, you got in cheaper than me. I don't know what a fair price is though given Gamestop was been trading between $4-$15 for the past few years and now it's "crashed" to $86 or so now.

This Gamestop saga is interesting to watch though. On one side you have possibly millions of bourgeoise retail investors, some with quite ample capital, and on the other side you have hedge funds who have been in this business for years and are heavily connected, but there's less of them and their moves are a little more visible than they might desire. Earlier today GME and AMC were both down like 55-60% but just in the last few minutes presumably the retail investors have managed to fight back and Gamestop is now only down 33% halfway through the trading day. Retail investors emerged victorious last week but it'll be an ongoing battle.

Yeah, stock market investing or trading has definitely become recreation, especially during the pandemic when everyone's staying home. While GME and AMC are obviously having a rough day today, the stock market as a whole I'm not too worried about. I'm not a stock trader. I'm an investor. I throw the vast majority of my stock market portfolio into the S&P 500 and I just don't touch it. I made the mistake of selling in March 2020 right near the bottom and had to rebuy higher. In any case, I do touch base with my family's financial advisor at BofA and BofA is anticipating decent annual returns up until 2023. I anticipate holding my S&P 500 position for decades though (I'm 30) so a dip isn't a problem for me unless I do sell and make the same mistake I made last time. There are also tax implications to selling here in the US which makes me even less inclined to do so.

An index fund is a kind of mutual fund which is a kind of hedge fund. — Pfhorrest

This is not correct. All of these financial products are different. Index funds are different from mutual funds which are different from hedge funds.

I don't know about Melvin specifically, but with hedge funds generally if you wanted to be accepted as a client you'd need atleast $100k if not $1mm to even get your foot in the door. These are not impoverished families for whatever reason throwing their life savings at Melvin. These are people with money seeking high returns and using their tax-advantaged retirement accounts to do it.

This is why people need to learn to manage their own finances and not trust everything to a "professional." I have a tough time understanding or sympathizing with people who refuse to manage their own finances or savings. If someone's "financial advisor" destroys their retirement savings in a risky hedge fund, then I hate to say it but who allowed that? Who gave them the money? Were they never overseeing their own investments? Or did they just believe that large piles of money would suddenly appear to them upon retirement when they trusted this "financial advisor?" You do know other people's portfolios suffered too while Gamestop was shorted over the course of years? I'm sure people lost retirement savings there too.

Who the hell puts all of their retirement savings into a hedge fund? So what now, do we just protect the hedge funds then? Pour billions of taxpayers dollars in to subsidize them and keep them afloat? I'm sorry but when you give your retirement funds to a company that makes a living shorting American businesses and then they get hit because a group of retailer investors steps in to try to help out the struggling business I just don't have much sympathy for you. Just leave your retirement savings in the S&P 500 or some target date index fund or bonds. Why anyone would put an overwhelming portion of their retirement savings with to trust to a risky hedge fund is beyond me. These people saw that Melvin had a great year a year or two ago and they were trying to maximize earnings. Well sometimes greed backfires, deal with it.

I actually like AMC as a company; they're a nice chain in the US and I've been to AMC theaters countless times and would love to see them reopen after the pandemic. Buying $GME isn't so much about making profit - I don't have any price targets or stop losses with my gamestop buy - At the end of the day, what's wrong with a bunch of retail investors coming together and deciding to help out a struggling company? I've been a Gamestop customer plenty of times. If certain hedge funds who were ultra-short Gamestop feel a little pain then that's not my problem. Hedge funds already have enormous advantages over the average retail investor.

I also only threw like 1% of my portfolio at this so it's not like failure is the end of the world.

Why would being wrong mean that you're cast into the scrap heap? Who makes that decision? Are serious thinkers not allowed to be wrong?

If you totally remove ego from the picture, being wrong is actually much better because when you realize you're wrong that brings you closer to the truth. It can also lead you to being more open minded in other areas. Being right is better for your ego, but you're not really learning anything; you've basically just taken time out of your day to convince someone else that your right and whatever implications come along with that.

I'm not saying that I'm 100% onboard with the "conspiracy" view, but it is worth noting that silver is up over 8% on the daily which far outstrips over precious metals. Gold & Palladium are barely up today. Platinum is doing well today, but only around half as well as silver.

In any case I did pick up some AMC and GME today and I'm fully preparing to get utterly wrecked. I'm already down over 20% today but it's nice to play a part.

I've never actually used the app and I've heard it isn't great. I just access Vanguard through chrome on my laptop.

EDIT: I think you need to be a US resident to use Vanguard.

Try Vanguard. It's not a high-tech trading platform or anything, but it'll get the job done. Zero fees and commissions too.

Also anyone getting inundated with headlines to buy silver? WSB is saying this is a false flag.

When considering homosexuality as a defect I find myself trying to think of problems it may cause to anyone effected by it and possible solutions to whatever problems there may be. — praxis

What are the problems it may cause for these people?

EDIT: Scratch that, nevermind responding. I didn't read your post the first time because I just stopped reading after the first couple sentence because I had no idea what you were talking about. Then when others commented I became kinda interested over the outrage but never finished reading your initial post, but I went back and read it and your answer is unbelievable so just disregard this.

I'm looking at GME's balance sheet and it does seem that GME holds $GME common stock so getting shorted on a massive scale can't be too helpful there. I heard as a result of the AMC stock appreciation AMC was able to pay off $600mm in debt and the organization can continue running after coming very close to bankruptcy recently.

market cap only reflects the expected performance of investors. That in itself doesn't affect Gamestop's performance.

Look at it this way, when a company issues a stock for the first time it's like it gets a perpetual loan from the investor and in return will pay a variable interest (dividends) which is related to company's performance. This loan can be transferred from investor to investor and prices for the loan will vary depending on expected dividends and therefore expected performance. One investor pays another for the right to the dividends but the original amount loaned to the company doesn't change.

Shorting a stock is again just transactions between investors, first you borrow one from an investor and sell it to another investor, then later you buy one from yet another investor to return the borrowed stock to the first investor. These are all transactions between investors with no effect to the company but says something about investors' expectations of the performance of the company. — Benkei

Why is it a perpetual loan rather than a one-time loan when the stock is issued for the first time and sold to the public?

I understand that shorting is just a transaction between investors, but that does impact the market cap. I admit that I don't have much experience in traditional markets, but I would think a low market cap reflects poorly on the brand, no? Wouldn't a low market cap make it harder to get loans? Maybe Gamestop or AMC employees get offered stock options as part of their compensation? While I understand that a company's market cap may not reflect its fundamentals or its actual performance, I find it hard to swallow that market cap just apparently doesn't matter to the company as you seem to be implying.

I just don't know the exact breakdown there.

Not being able to reach the cupboard without a boost is a deficiency, as is being incapable of dunking. Is it not PC to say this? — praxis

I'm not here to call you out for not being PC. I'm just curious as to where you draw the line. Is a tall person being bad at limbo a deficiency? Should everyone be able to limbo under a certain height? If we 're going to call short people deficient then why not tall people?

Heavy short selling suppressed gamestop's stock price for years, this hurts the company, no? Suppressing the share price leads to a lower market cap for the company.

I would certainly say that people are not guilty for the fantasies which arise, but perhaps it matters how we react to our fantasies. I would see consciousness awareness of them as being the most important aspect, as processing them. — Jack Cummins

It's a good thing to reflect upon those instinctual thoughts and dispel them upon reflection. That's part of being a good person - you don't just identify yourself with your immediate, instinctual thoughts; you're instead capable of dispelling them upon reflection and reaffirm your commitment towards a different worldview.

Well, people have - or can have - a degree of control over their habitual behaviours. The terms "instinct," "sub-conscious," "habit," are all constructs and there is not real evidence as to exactly what they correlate. But conscious attention for sure can modify motives and habits which may have only been operating below the level of conscious awareness up until then. — Pantagruel

Just because something can be modified doesn't mean that it necessarily will modify in terms of instinct. We don't really control our immediate responses. Sure we can try to do things to change them but there's no guarantee they'll succeed. Personally, I've had immediate negative instinctual responses towards members of my own ethnic group as well as others so I guess I'm just basically racist against humanity at this point.