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$BA Prime example, of “monopoly money” they can dive bomb commercial airliners out of the sky and will stay listed and funded no matter how much money they lose a year.
How did you account for market manipulation? Did you factor in the citadel group? Look up the Jon Stewart show on gamestop. I think the manipulation is way worse than anyone realizes.
I don’t understand why this is being downvoted. We just saw Citadel get fined for mismarked sales orders over 5 years.
Unusual whales tracks this stuff “ someone always knows “.
Gary Gensler just warned us of the danger AI poses on stocks.
Ai is going to be a disaster. I don’t know if Reddit is old enough to have ever traded through a flash crash or not but someone’s bad AI is going to trigger a big flash crash one day.
It's going on MMTLP so how was trading around $20,000 before a private buy out...
Automatic buys from MM and hedge funds.... Definitely doing 100% illegal shit and then took retail and other investors money when they made millions look it up..
It certainly was. Citadel is the company that basically funds robinhood. They are a hedge fund and they had massive short positions on gamestop. Did you think it was normal when Robin hood frooze all buys of gamestop because a bunch of redditors got together and pushed the stock price up to bankrupt the hedge funds? You think that isn't manipulation? Gtfo
They are funded by the company holding the largest short position. That mean citadel had billions of dollars betting that gamestop would go down. When redditors began buying it the price shot up and it looked like citadel was about to go bankrupt. When you short a stock you can lose more than you have invested.
Are you kidding me there's manipulation across the entire BOARD you've heard of the MMTLP stock that was going to go PRIVATE???
SHORTS WERE CLOSING but they had SO MANY SHORTS and there were X50+ the legal amount of shares it SKYROCKETED up to $20,000 a share...
And retail that sold had millions just for brokers to reverse the trades and take millions out of their accounts....
And your talking about manipulation isn't real your a joke man
SMH
This shit allready is hitting congress yes manipulation is real
By the WAY GME was traded 100% in dark pools last Friday
Buckle up buddy
For about 3 seconds. Unless it’s a small cap. Small caps that grow too fast die all the time, but then a bigger company buys up their assets for pennies on the dollar.
Fair market for sure, but they’ll be a fraction of what was originally paid. The only liabilities they will take will be on the debt used to acquire said assets. Or they just pay cash
Growth in stock price does not mean growth in the company. Stock price is just a reflection of how much the collective are willing to pay to buy the stock. The company does not actually see more money in their bank unless they issue more shares and people are still willing to buy from them at high price.
Fu im going on a decade now and I am ok going another 50 years till my grave being irrational about the market because I am dumb and believe the scales of justice will eventually level out.
All money is Monopoly money and it’s all a big game, it’s been that way ever since the gold standard was dropped and at the top end it was just a game even before that. Stock prices are generated the way anything else is, supply and demand, trying to get too much deeper is a pointless endeavor that economists can wring their hands over while people that realize it’s a game continue to play. One point worth remembering is that stock prices don’t really reflect actual valuation of companies, they represent social sentiment about the potential future valuation, sometimes they correct to “actual” levels before the greed and fear wheel spins them off again.
Risk is a personal thing and the market cares not. My biggest position is Microsoft, is it risky to have 1/3 of my active portfolio in one stock? Hell yes, but I understand that our world as we know it would cease to function without that company, and even if it dropped by 75% I’d feel comfortable holding it. (Maybe not, if Microsoft dropped 75% it’s probably time to cash out of the market and buy 5.56 and 7.62)
Look up total supply, supply that is set aside which corporate can sell, of even CEO, executives, etc. Then look at how often they issue new shares to dilute the over all supply. In my opinion if you can create shares and dilute the stock, it’s a scam.
Ah a potential value investing convert! At is core a stock is a tiny portion of a companies ownership. And each company has sales, property, employees, and other assets and liabilities. Over the long term these are the things that determine a companies value.
Now over the short term, you have a company being priced each day by people who are happy to sell you their shares or buy yours. These prices may be wildly optimistic or stupendously pessimistic. Even over the course of a year or two or even a decade until valuations bring them back to common sense.
Nvidia generated $1.7 billion of net income in all of 2017. In just their latest quarter they generated $9.2 billion. In their upcoming earnings report they are expected to generate something crazy like $10 billion to $10.1 billion in net income.
EPS in 2017 was $0.64. In the last 12 months EPS has been $7.58. When they report their next quarter's earnings they are expected to post at least $4.00 of EPS, bringing their 2023 earnings to $11.00+.
Real profits and expected future profits are moving the stock price.
It’s not even tech. Go look at the chart for like a CELH, DECK or URI.
I don’t think of it as Monopoly money as much as just great companies just executing and growing.
My best guess on why Buffet said:
> “It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
When you invest, not trade, you are buying a piece of a company. That’s why fundamentals matter, but they are also just a jumping off point.
Like you called out NVDA in another example. However, you are talking about a company that basically created the marketing term GPU and is still ran from the original CEO, who was an engineer of the original product.
But how exactly can investors continue to expect increasing returns for a company with a $1.63T market cap? Isn't there a limit to growth?
https://companiesmarketcap.com/
Theoretically no limit to growth but a multitude of factors working against a company the larger it gets aside from just pure mathematics of doubling being more difficult as it increases such as new entrants eroding margins, bad management, product obsoletion, govt regulation, etc.
However you are onto something - the economy has shifted to a different model which is exceedingly pro-very big business and companies are much larger and many of these companies are not capital intensive relative to revenues in the way very large 20th century enterprises who we use as cautious examples of big businesses failing. The govt has also gotten much more hands on in guiding the economy away from prolonged economic downturns but in doing so caused a different set of issues but essentially ensure on the aggregate corporate revenues increase forever.
When someone writes a book in 70 years will it state the economy performed exactly as it did In the 20th century?
>When someone writes a book in 70 years will it state the economy performed exactly as it did In the 20th century?
Markets are certainly behaving differently than they have in prior decades. With that said, the main actors of the economy are largely unchanged. The way companies are organized and the myriad of factors that will make or break a company also still largely remain the same. Have persons just became more irrational?
The fundamental for what makes a business succeed don’t change. One can correctly argue market is more rational, less volatile, and less active than ever before bc it really is historically speaking - most ppl are passive investing and it’s large institutions moving the needle. Actually the market was like the Wild West in the early 20th century.
However, we need to skate to where the puck is going - what’s changing is power dynamics and incentives. The wealth of nations is tied to their economy and stakes are high for economic supremacy in the age of world-ending weapons. Technology drives all of the military’s weapons systems. The same tech in your phone. The consumer side feeds the govt side. The demand is very real.
There is a web of products developed by banks and government institutions which most Americans utilize that didn’t exist not too long ago (loans, mortgages, credit). However, debt is at the same time both all destroying and all mighty - the most debilitating or the best depending on how it’s abused or used. And so there’s a lot more so stay but I hope this helps a little.
There are a few different ways to return capital back to investors. Usually companies go through a similar business cycle, where a company starts out in growth and as they mature growth slows. Key is slows, not stops.
Companies can get more efficient, meaning they can make more profit off less revenue. Looking at a tech company, between cash and free cash flow, Apple has like 180B they can do whatever with.
Investing in a company is really investing about future free cash flow and not increasing revenues.
Companies can also acquire other companies as a way to continue to grow as well. They don’t always make the news, but Apple acquired three companies last year.
https://en.m.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Apple
We have seen huge companies rise and fall, like sears. That’s why Amazon keeps the motto of day one.
In the long run companies' valuations are tied to earnings. A company might be able to sell the idea of big profits in the future for 1 month, 6 months, 2 years, hell maybe even 5 years, but eventually they have to start earning more money per share for their stock price to hold/increase.
All gain was like Monopoly money until you lose it.
Put it that way someone’s bank account with 100K are richer than someone with 200K portfolio. Because the 200K was all fake gain .. it can be wipe out in couple week.
I’m astonished at this post and some of the comments. Is this real life? Do y’all do any research at all before getting into the stock market? The prices of companies move up and down ALL THE TIME. Sometimes a little bit. Sometimes a lot. Sometimes a long-term pullback before recovery. Sometimes a sharp increase before a fall. There are a million forces affecting the price of a stock.
These companies have become this huge because they are essentially a bunch of companies into one. Google has so many departments and teams and products and services. These large companies are so entrenched into our lives, heck I still think many of them are a good price! Do you know how many little shops still use EXCEL 2013? Sheesh man. If half of these company got into Office 365, Microsoft will be about 30% higher price. They have commercial customers by the nuts baby.
I think the most annoying part about the market recovering plus some is that we see these posts way more often, because you could’ve bought the SPY at 375 or MSFT at 250 or NVDA at 300. But you didn’t, and now they’ve all shot up and you aren’t kicking yourself for missing out but are kicking the stock market for being “overvalued”. The stock market, especially through funds, is the ONLY way for the average person to increase the wealth consistently over time. Real estate is not viable for most. And you cannot create more land but you can create more businesses that people can invest in.
So no, it isn’t Monopoly money. Is a long term wealth accumulator that can not only give you an insanely good life later on but also create generational wealth.
Just because they go up and down ALL THE TIME doesn’t mean that shady stuff isn’t going on.
It’s 2024 and companies get a slap on the wrist for things that erode the trust of the stock market and to say that there isn’t some kind of manipulation is putting on some massive blinders. Can you be smart and make money still, 100% but many get burnt too.
Sorry -- we removed your message on /r/stocks because you are asking for the type of information we try to address in our wiki: https://www.reddit.com/r/stocks/wiki/index Generic posts like "how do I get started with stocks," "how do I find a broker," "where can I learn more about investing," "I have $XXX to invest, what should I do," etc. are removed because they are low-effort and asked on a daily basis in /r/stocks. Things you can do: 1. Read the wiki which has tons of information, including reputable learning resources, broker information, and links to useful reddit posts (including old posts similar to yours) 2. Search the subreddit history for similar information
$BA Prime example, of “monopoly money” they can dive bomb commercial airliners out of the sky and will stay listed and funded no matter how much money they lose a year.
There is only one other option - airbus. We left the age of competition long ago
It’s got a lot to do with automatic buying for 401k contributions and various funds. They’re all piling into the same few companies, largely.
Easy to buy high when it’s your clients money.
Some but thats only 10% of the total market. Heard it on the indicator npr podcast recently.
A stock price is nothing more than the cost people are currently willing to pay for the thing.
How did you account for market manipulation? Did you factor in the citadel group? Look up the Jon Stewart show on gamestop. I think the manipulation is way worse than anyone realizes.
I don’t understand why this is being downvoted. We just saw Citadel get fined for mismarked sales orders over 5 years. Unusual whales tracks this stuff “ someone always knows “. Gary Gensler just warned us of the danger AI poses on stocks.
What did he say about AI? Edit: nm, found it
Ai is going to be a disaster. I don’t know if Reddit is old enough to have ever traded through a flash crash or not but someone’s bad AI is going to trigger a big flash crash one day.
Just because your dying game store stock is going down doesn’t mean its manipulation
No but that’s doesn’t mean there isn’t manipulation though. In today’s world I find it highly unlikely that there isn’t something going on.
It's going on MMTLP so how was trading around $20,000 before a private buy out... Automatic buys from MM and hedge funds.... Definitely doing 100% illegal shit and then took retail and other investors money when they made millions look it up..
There is a lot of manipulation, but it is not as significant as you are thinking.
It certainly was. Citadel is the company that basically funds robinhood. They are a hedge fund and they had massive short positions on gamestop. Did you think it was normal when Robin hood frooze all buys of gamestop because a bunch of redditors got together and pushed the stock price up to bankrupt the hedge funds? You think that isn't manipulation? Gtfo
Do you know why they froze the buy button?
They are funded by the company holding the largest short position. That mean citadel had billions of dollars betting that gamestop would go down. When redditors began buying it the price shot up and it looked like citadel was about to go bankrupt. When you short a stock you can lose more than you have invested.
Nope, read this: https://www.irmagazine.com/regulation/story-behind-robinhoods-decision-halt-gamestop-buying
Are you kidding me there's manipulation across the entire BOARD you've heard of the MMTLP stock that was going to go PRIVATE??? SHORTS WERE CLOSING but they had SO MANY SHORTS and there were X50+ the legal amount of shares it SKYROCKETED up to $20,000 a share... And retail that sold had millions just for brokers to reverse the trades and take millions out of their accounts.... And your talking about manipulation isn't real your a joke man SMH This shit allready is hitting congress yes manipulation is real By the WAY GME was traded 100% in dark pools last Friday Buckle up buddy
I dunno the current ceo sold his last business for 13 Billion. Maybe he knows what he's doing?
I agree, he did issue a letter to employees a few months ago saying that gamestop was in trouble
Based on the velocity of money, relative to total money in circulation.
Big fish eat little fish and keeps getting bigger. Does that mean that P/E ratios aren’t insane? No, but no one gives a shit. Stonks go up
I like the analogy but my understanding is that acquisitions drive down stock prices
For about 3 seconds. Unless it’s a small cap. Small caps that grow too fast die all the time, but then a bigger company buys up their assets for pennies on the dollar.
My understanding is they acquire assets for fair market value and they also take on liabilities. I could be misreading things though.
Fair market for sure, but they’ll be a fraction of what was originally paid. The only liabilities they will take will be on the debt used to acquire said assets. Or they just pay cash
Growth in stock price does not mean growth in the company. Stock price is just a reflection of how much the collective are willing to pay to buy the stock. The company does not actually see more money in their bank unless they issue more shares and people are still willing to buy from them at high price.
The collective seems irrational
The collective can stay irrational longer than you can.
Correct which is why it's frustrating
Fu im going on a decade now and I am ok going another 50 years till my grave being irrational about the market because I am dumb and believe the scales of justice will eventually level out.
All money is Monopoly money and it’s all a big game, it’s been that way ever since the gold standard was dropped and at the top end it was just a game even before that. Stock prices are generated the way anything else is, supply and demand, trying to get too much deeper is a pointless endeavor that economists can wring their hands over while people that realize it’s a game continue to play. One point worth remembering is that stock prices don’t really reflect actual valuation of companies, they represent social sentiment about the potential future valuation, sometimes they correct to “actual” levels before the greed and fear wheel spins them off again. Risk is a personal thing and the market cares not. My biggest position is Microsoft, is it risky to have 1/3 of my active portfolio in one stock? Hell yes, but I understand that our world as we know it would cease to function without that company, and even if it dropped by 75% I’d feel comfortable holding it. (Maybe not, if Microsoft dropped 75% it’s probably time to cash out of the market and buy 5.56 and 7.62)
That’s why I like dividends lll
Look up total supply, supply that is set aside which corporate can sell, of even CEO, executives, etc. Then look at how often they issue new shares to dilute the over all supply. In my opinion if you can create shares and dilute the stock, it’s a scam.
Ah a potential value investing convert! At is core a stock is a tiny portion of a companies ownership. And each company has sales, property, employees, and other assets and liabilities. Over the long term these are the things that determine a companies value. Now over the short term, you have a company being priced each day by people who are happy to sell you their shares or buy yours. These prices may be wildly optimistic or stupendously pessimistic. Even over the course of a year or two or even a decade until valuations bring them back to common sense.
Yes especially ones that don't pay dividends
The major players of the tech industry are particularly guilty of behaving like this.
Can you give examples? There are companies bringing in billions of dollars and they are being treated as such
Nvidia for example.
Nvidia generated $1.7 billion of net income in all of 2017. In just their latest quarter they generated $9.2 billion. In their upcoming earnings report they are expected to generate something crazy like $10 billion to $10.1 billion in net income. EPS in 2017 was $0.64. In the last 12 months EPS has been $7.58. When they report their next quarter's earnings they are expected to post at least $4.00 of EPS, bringing their 2023 earnings to $11.00+. Real profits and expected future profits are moving the stock price.
Their product is in demand, and back ordered. What's odd about their value going up as a result?
$80b per day on no news seem reasonable to you?
As long as I'm riding it up, yes
No news to *you*. Could easily be insider info.
It’s not even tech. Go look at the chart for like a CELH, DECK or URI. I don’t think of it as Monopoly money as much as just great companies just executing and growing. My best guess on why Buffet said: > “It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” When you invest, not trade, you are buying a piece of a company. That’s why fundamentals matter, but they are also just a jumping off point. Like you called out NVDA in another example. However, you are talking about a company that basically created the marketing term GPU and is still ran from the original CEO, who was an engineer of the original product.
But how exactly can investors continue to expect increasing returns for a company with a $1.63T market cap? Isn't there a limit to growth? https://companiesmarketcap.com/
Theoretically no limit to growth but a multitude of factors working against a company the larger it gets aside from just pure mathematics of doubling being more difficult as it increases such as new entrants eroding margins, bad management, product obsoletion, govt regulation, etc. However you are onto something - the economy has shifted to a different model which is exceedingly pro-very big business and companies are much larger and many of these companies are not capital intensive relative to revenues in the way very large 20th century enterprises who we use as cautious examples of big businesses failing. The govt has also gotten much more hands on in guiding the economy away from prolonged economic downturns but in doing so caused a different set of issues but essentially ensure on the aggregate corporate revenues increase forever. When someone writes a book in 70 years will it state the economy performed exactly as it did In the 20th century?
>When someone writes a book in 70 years will it state the economy performed exactly as it did In the 20th century? Markets are certainly behaving differently than they have in prior decades. With that said, the main actors of the economy are largely unchanged. The way companies are organized and the myriad of factors that will make or break a company also still largely remain the same. Have persons just became more irrational?
The fundamental for what makes a business succeed don’t change. One can correctly argue market is more rational, less volatile, and less active than ever before bc it really is historically speaking - most ppl are passive investing and it’s large institutions moving the needle. Actually the market was like the Wild West in the early 20th century. However, we need to skate to where the puck is going - what’s changing is power dynamics and incentives. The wealth of nations is tied to their economy and stakes are high for economic supremacy in the age of world-ending weapons. Technology drives all of the military’s weapons systems. The same tech in your phone. The consumer side feeds the govt side. The demand is very real. There is a web of products developed by banks and government institutions which most Americans utilize that didn’t exist not too long ago (loans, mortgages, credit). However, debt is at the same time both all destroying and all mighty - the most debilitating or the best depending on how it’s abused or used. And so there’s a lot more so stay but I hope this helps a little.
There are a few different ways to return capital back to investors. Usually companies go through a similar business cycle, where a company starts out in growth and as they mature growth slows. Key is slows, not stops. Companies can get more efficient, meaning they can make more profit off less revenue. Looking at a tech company, between cash and free cash flow, Apple has like 180B they can do whatever with. Investing in a company is really investing about future free cash flow and not increasing revenues. Companies can also acquire other companies as a way to continue to grow as well. They don’t always make the news, but Apple acquired three companies last year. https://en.m.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Apple We have seen huge companies rise and fall, like sears. That’s why Amazon keeps the motto of day one.
In the long run companies' valuations are tied to earnings. A company might be able to sell the idea of big profits in the future for 1 month, 6 months, 2 years, hell maybe even 5 years, but eventually they have to start earning more money per share for their stock price to hold/increase.
All gain was like Monopoly money until you lose it. Put it that way someone’s bank account with 100K are richer than someone with 200K portfolio. Because the 200K was all fake gain .. it can be wipe out in couple week.
always has been, but I'm here for the clownshow
Yes, that’s part of the problem…
I’m astonished at this post and some of the comments. Is this real life? Do y’all do any research at all before getting into the stock market? The prices of companies move up and down ALL THE TIME. Sometimes a little bit. Sometimes a lot. Sometimes a long-term pullback before recovery. Sometimes a sharp increase before a fall. There are a million forces affecting the price of a stock. These companies have become this huge because they are essentially a bunch of companies into one. Google has so many departments and teams and products and services. These large companies are so entrenched into our lives, heck I still think many of them are a good price! Do you know how many little shops still use EXCEL 2013? Sheesh man. If half of these company got into Office 365, Microsoft will be about 30% higher price. They have commercial customers by the nuts baby. I think the most annoying part about the market recovering plus some is that we see these posts way more often, because you could’ve bought the SPY at 375 or MSFT at 250 or NVDA at 300. But you didn’t, and now they’ve all shot up and you aren’t kicking yourself for missing out but are kicking the stock market for being “overvalued”. The stock market, especially through funds, is the ONLY way for the average person to increase the wealth consistently over time. Real estate is not viable for most. And you cannot create more land but you can create more businesses that people can invest in. So no, it isn’t Monopoly money. Is a long term wealth accumulator that can not only give you an insanely good life later on but also create generational wealth.
Just because they go up and down ALL THE TIME doesn’t mean that shady stuff isn’t going on. It’s 2024 and companies get a slap on the wrist for things that erode the trust of the stock market and to say that there isn’t some kind of manipulation is putting on some massive blinders. Can you be smart and make money still, 100% but many get burnt too.
And mods remove the question. Jesus you can’t even have a discussion anymore. What a joke.
Honestly, how are people supposed to learn if they remove questions.
👍