RE:RE:RE:RE:Stop Predatory Short SellingLonghandStrong wrote:
3 words, Liquidity, liquidity and liquidity. You need a market, to make any money. A coin with only one side isn't oft flipped.... The only reason people don't like shorting, is because like the coin, somebody wins and somebody loses. Nobody likes heads when they stake up tails. And, being as its the pros that win, that leaves us, the amateurs as the losers most of the time. Most people when but+hurt, can't blame, or aren't emotionally mature enough to blame, their own bad decisions, so they blame the game. Being a victim is easier than admiting you played the cards in the wrong order. If you believe in ghosts, you see ghosts. That doesn't mean there is such a thing as ghosts. And the rules? B1tching about them is like b1tching about the hoop height cause you can't dunk. Its the pros that make the rules, because IMO, they make the market. That sucks when we lose, and we lose most often when we play a pro, but like the hoop, without the market, we don't get a chance to even play... Ghosts aside, there are definitely sharks in these waters, and if you ain't a shark, you're a guppy. All too often I see guppies forget they are guppies, and then go for a swim, predictably, they get eaten. Every time I spread my guppy fins in hopes that the sharks are full, or not paying attention, well, gulp, I'm shark food and reminded of my guppy stripes. Sharks don't swim around b1thching about shorts, Basel, macro, and tick tests, they just swim around doing shark sh1t. There's a reason people, banks, private wealth managers etc. don't like junior mining sector IMO, its big risk all the time, with almost never a reward. Playing football, when the only play your team has is the Hail Mary is no fun, and you lose most often, even if the odd pass completion is exciting, spectacular and makes a highlight reel. Cliches are cliches for a reason... and IMO always provide good lesson. A cliche to remember 'a fool and his money are easily parted'. The motto, don't be a fool. I.e. take off your confirmation glasses once in a while. When the pink lenses are removed, sometimes it is in fact pretty cloudy out. Most people think that the fools are someone else other than them. I assume and play as if I am the fool, protecting my flank at all times, that way am not surprised, disappointed or hurt too badly when the pro takes my dough. And my final cliche of the day, courtesy of dub buffet himself, "be afraid when everyone else is greedy and be greedy when everyone else is afraid". Lotta greed in these plays. My personal opinion only, as soon as you think you are smarter than the market, be very, very afraid.
Lots of good points here Longhandstrong. So I'll just have a few ancillary observations.
What is it that makes pros "pro" and us "guppies?" I can tell you it's not brains or street smarts or education. I spent a few years on a risk desk watching over traders when the NASD crashed in 2000. The "pro" traders were lost. They all were taught the same way to trade at their Ivy League B-Schools and they were incapable of handling the bear market - they had never even seen one. They simply could not stop buying the dips. We walked them out one at a time and hired folks who were older and wiser and who had experience trading bear markets.
The differences are 1- "pros" can do things like naked short. 2-"pros" have access to many order types that "guppies" do not. We can buy with a market order, limit order, stop loss, stop limit, trailing stops, etc. "pros" have access to at least 20 other order types, many designed NOT to execute but merely test the market to see if actual trades will be profitable. 3- "pros" are often not playing with their own money. 4- "pros" collude with each other to screw the "guppies." 5- "pros" have access to high frequency trading platforms that allow them to front-run the trades of their clients, and 6- Regulators are a part of the scam and do nothing to protect the guppies.
Interestingly, we all know now what happens when the guppies fight back by colluding against the pros. It's called taking advantage of hedge fund stupidity in naked shorting Gamestop for example and the guppies took the hedge funds to the cleaners. You may notice that no one has been charged with anything because the hedge funds had shorted 140% of GME's float and were filthy. We also know that big banks can get hammered when they trust some of their own people as with Archegos, Bill Hwang's leveraged, unhedged bets that lost about $20 billion in four days.
But yes, we are at a significant disadvantage from a trading standpoint. That said, we know enough about how pros operate that we should be able to get reasonably close to their performance. We have access to enough information that we should be able to determine when a stock is mispriced based on fundamentals. We also hopefully can read a chart and make some guesses as to when technical factors are in our favor. So if we choose a stock that is underpriced based on the value of its hard assets, and pick our trade timing based on some basic technical analysis, we'll do OK. And if conditions change, as they often do, we can take a second look and modify our approach.
On the whole, I agree with folks who complain about the uneven playing field. It is quite unfair and they have a right to vent. On the other hand, we do have a clear picture of the deal as it stands and know very well that we are the targets of the establishment financial industry.
As it relates to this board, we have a stock that is more than 50% under its 52 week high and the fundamentals have not changed. So we are mispriced in a market that is even less efficient and more emotional than most. As it turns out, that's a very good thing. It's a more volatile situation. It overshoots to both the upside and downside. We can take advantage by adding when undervalued and getting lighter when overvalued and since we're taking more risk, on average with these situations, we'll get more reward when it works out. I actually do not see us as "losing" anything at this point unless we misplay the trade. But - and it's a large "but" - we need to be very disciplined and pretty much operate against human nature to get it right. At this point in time, human nature does not tell me to buy. But analysis does. We'll see how it works out.
Do your own DD. GLTA. Doug