Have you read it? The article is well reasoned.
I did. But we can play along at home with the others if we like
https://archive.vn/XGk7Q being a nice archive of it.
https://www.washingtonpost.com/opin...gamestop-story-its-hedge-funds-short-sellers/ if someone does want a linky back to the original (maybe to compare to current).
Ridiculous title from where I sit -- good guys and bad buys, heroes... pah for the whole affair. I find it hilarious that firms whose whole job is analysing, mitigating and... hedging against risk got caught napping that hard, taken to the cleaners and now while on a good day they would normally imagine themselves posing in front of a billowing American flag, tear rolling down face, hand on heart as the national anthem plays and they extol me on the virtues of the free market that the country affords them the option to play in now aim to make it less free than... probably Iran (
Iran as actually quite interesting as these things go).
However clickbait title is nothing new so let us walk past that and assume it is to draw people in and at least get them to consider a different point of view.
Starting out. Ragging on gamestop. I disagree that "a product best sold digitally" is games (no second hand market, which is getting all those game sellers creaming their jeans, no good) but at least some seem to think the accepted wisdom is that and by some measures if I don't care about consumer freedom it could well be. Some might argue its stock price dropping off being a useful assessment of value is a bit disingenuous given that it was arguably driven down but we can overlook that for a bit. Equally a short is only as good as your timing of it -- you might rightly predict a company will have gone pop in 3 years but if a year from now they announce dividends or something and get a rally causing your position to be hurt then nobody will normally have any sympathy for you.
The assertion that it is a bubble on par with tulips and not even the excesses of the dot com stuff (which were insane if you go listen to the stories -- such things as no product or design, just some nerds in an office and someone funding something) which at least apparently held some merit is also dubious from where I sit. The very idea here is that there are some that over leveraged themselves (promissory rather than monetarily but that matters little) and are going to be forced to buy at almost any cost (money they technically have available too) and thus are ripe for the plucking/to be taken to the cleaners.
"Their goal is to destroy the traders who link stock prices to fair value."
That is, in a phrase, fucking rich given the seeming goal of the short selling set was to ride it all the way into the scene of a crash (which is fair enough -- plenty of money to be made on companies going up as well as going down). Nor am I actually sure it is a goal that can be widely ascribed (I am not inclined to use the phrase movement but if the shoe can at least be rammed on there and look like one of those bound foot Chinese ladies then...). If some of said traders happen to get destroyed in the process then few in there will likely shed anything other than tears of amusement. Given the sales pitch of a hedge fund generally runs "if you don't know what you are doing then you can lose your shirt, let us take care of it as I are smart expart" there is a certain amusement there as well. Even more so as going back to the part above they will also be the first to tell me prices don't reflect reality and sometimes nice little round numbers, failures in risk estimation, people wanting some of the sweet dividend cash and more can uncouple a price from what might be "real" if simplistic profit-earning ratios, debt levels/money in the bank (and how liquid that might be), credit ratings, market share, general sector health and more metrics along those lines formed the sole basis of it.
" They are not just acting within the system; they want to overthrow the system."
Is this really any different to corporate raiding/vulture capitalism, the shift to "shareholder is king", the thing I mentioned earlier with PETA buying meat companies to try to force them to go vegan and other activist investors doing what they do, companies buying ailing old money to look fancier than they are... "welcome to the new generation, they like to shake things up".
"What about short sellers? These are specialists who research stocks that might go down, sometimes because bosses are illegally covering up bad news about their companies."
I believe that is an argumentative technique called poisoning the well. I know we are reading an opinion piece in this little exercise and thus full bore journalistic standards need not necessarily be in play but will note it in this.
"They have gone after a short seller named Andrew Left, hacking into his social media accounts,"
Happy to disavow such actions. Granted what is good for goose appears to be good for gander and retaliation is in order. That said do I have to ascribe the actions to the whole deal or some bad actors within it?
"hedge funds did not receive a bail out"
https://www.marketwatch.com/story/hedge-funds-may-getting-a-bailout
Not that I particularly care, nor am I sure that the "movement" is all about that, but if you are going to make statements that are only in the very strictest sense technically true, and also be among the crowd that is the first to tell me about the fungibility* of money, then OK. That I can disprove it with the second link of a web search for "housing market hedge fund bail out" (probably the first too but I refuse to link huffpost). The third link
https://www.bloomberg.com/opinion/articles/2020-04-16/coronavirus-do-hedge-funds-deserve-bailouts would appear to also indicate they have no qualms this last go around (never mind what the straight market indexes did during that time).
I have no great qualms with that (money trough is money trough, money pursuer going to be drawn in like pigs to muck. Some like to shame those that suckle at the government teat, I don't care) but if we are here assessing the merits of a news story.
*others playing along it is a word that refers to how one dollar spends just as good as another. If I give to a hospital and say don't spend it on opticians then the budget will likely have been written in such a way that the optician was never in any real doubt for lack of funding, however my name goes on a cancer wing or something and the money technically earmarked for the cancer wing in the main budget originally instead gets shuffled over. Replace opticians with abortion if you fancy doing the American pressure point and yeah. Charities, universities (
https://www.usnews.com/education/be...s/10-universities-with-the-biggest-endowments ), places getting loans or funds earmarked for certain purposes... this is why such places hire accountants and pay them pretty well.
In the rest I am not seeing much I would classify as good reasoning or reasoning how the short sellers are poor put upon types in need of a break here. Short sellers operate in the open is a thing contemplated there, though it does nicely miss the over leveraged part.
Very few serious traders will do FOREX (for others playing along that is foreign exchange, trading money between currencies and taking advantage of price swings there -- war starts, fewer people want currency, country gets to host olympics, everybody wants, country is major exporter of shiny tech and likes their currency for transactions...) and citing volatility there as the reason why. Seems it has come, especially in those over leveraged cases, for the short selling set. A little cash cow has come to an end. Don't see it as functionally different to a stock that was worth a lot a few years ago now not being worth as much thanks to poor choices or the coming of a new tech that rendered it obsolete.
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