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Yeah but in the long run the Earth collapses into the Sun and all stocks go to zero. So logically short everything and you if you’re patient enough you can’t lose.
Thanks, McCarthy!
Now markets will crash on deflation worries. I love that my entire financial wellbeing hinges on this stuff.
I’m told BBBY is going bankrupt and when companies go bankrupt their stock goes to zero, so it’s an easy trade.
I would have thought markets would go up because the fed will be less hawkish on rate increases. But the markets are down so I guess you’re right?
Numbers hit expectations on every metric. The softer numbers were sort of built in and helped drive the rally in recent days.
We will switch over from inflation fears to earnings fears at some point IMO. Earnings estimates are still too high, especially for back half '23 I think.
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Predicting returns is a fool’s game. That being said, I think it’s easy to get caught up in how far some stocks have fallen, and underappreciate how expensive they still are.
DoorDash still has a market cap of $20 billion. GameStop is still almost $6 billion. Tesla almost $400 billion. There’s still a lot of room for those kinds of stocks to fall.
This is the Golden Age of the contrarian investor. Every news item that logically should be met with enthusiasm by the market results in a bunch of red, when there’s horrendous news the market shoots up.
The reality is that capital markets barely respond to news anymore unless the news is a panic inducing revelation like “there’s a global pandemic happening” and everyone runs for the exits. The stock market’s daily movements are utterly unpredictable aggregations of millions and millions of inputs and reactions from real portfolio managers and a bunch of bots doing trades. I learned enough about chaotic dynamic systems in college to not try to predict movements in a system like that. There’s like 100,000 butterfly flaps every minute in capital markets, any one of them can cause a hurricane that no one sees coming.
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Found a place to go through all the old Matt Levine Newsletters
I’m reading through just imagining what kind of a world we could have if the combined intelligence of all these smart people was bent towards productive enterprises rather than ever increasingly complicated tricks to win zero sum finance games.
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This is a great chart:
https://twitter.com/mtkonczal/status/1613539920441737222?s=20&t=gxRIVHbDXfiw_p9MCWg2ng
It’s the distribution of inflation rates across the different components of goods and services. It’s normally the case that price levels across goods/services rise or fall in a fairly uniform way, which I think makes it easier to understand and respond to those movements. But in 2022, you’ve got these incredibly wide distributions, which means that you could characterize inflation (and inflation expectations) as really high or relatively moderate depending on which of those components you focus on. Good to see that distribution tightening up.
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The peaks in the distributions from March 2021 on are bad news in a polarizing political environment. Do you know which goods are services make up the peaks? Like those orange/red peaks are (I am guessing) related to food and gas prices, essentials that make up a big portion of the budget for poorer households. One my Grand Unifying Theories (unsubstantiated but strongly held) is that everything is going to be K-shaped for the rest of my life. The tight, single peak inflation curves are the top of this chart tell a story of shared collective experience. The broad distributions with peaks at the bottom tell a story of disparate experiences. My hunch is that we are going to see policy driving the distribution back to the left, with most of the improvement experienced by the rich and most of the lingering pain experienced by the poor. If this is followed by capital markets recovery and long-term real wage suppression for the working class, the establishment will probably get tendon damage from patting themselves on the back so hard, meanwhile another huge cohort of disgruntled people will be ripe to be plucked by faux conservative populism. Yay.
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i think the cpi data is being leaked or reproduced in some way which is why we rallied 4% over the past 4-5 days but basically flat today
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I can confirm that the $28 sandwich place (after chips, drink, tax and tip) by me seems to be floundering.
However the French boulangerie by me which comes out to the same price for a sandwich, pastry and coffee is always packed.
#DATASCIENCE
You don’t say.
Up 46% on the day!? Is this just some kind of short covering, day trade move?.
I’m convinced that Matt Levine would be an absolutely great hang. I don’t know if his humor is for everyone, but I firmly believe that if we were randomly seated next to each other at a conference dinner, we would be best friends by the end of the evening.
In 2021, JPMorgan Chase & Co. paid $175 million to acquire Frank, a financial technology company that helps students fill out college financial aid forms. It is not obvious why this would be a lucrative business for JPMorgan, or Frank, but that was not really the point of the acquisition. The point of the acquisition is that helping students fill out college financial aid forms, while not itself lucrative, might help you build long-term financial relationships with them at an early and impressionable point in their lives. If Frank helps a student fill out her financial aid forms, she might like Frank, so when Frank emails her and says “hey now that you’re in college you should set up a checking account, here’s one,” she might open the checking account — at JPMorgan — that Frank recommends. Later, she might get her mortgage through a Frank recommendation. JPMorgan was buying Frank’s customer relationships, so that it could use them to sell financial products that were lucrative.
That is, in some sense, JPMorgan paid Frank $175 million for an email list. As the proprietor of an email list myself, I have some interest in this transaction.
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Yes, I should have checked the shortsqueeze subreddits before posting that, like I do before I myself am about to short something. The pump that’s happening isn’t from the BBBY apes (most of whom have a >$20 cost basis), but from new people playing it as a pump-and-dump / short squeeze (not that any shorts will feel the squeeze unless it hits like $40). And now that the market cap is back above 500M, WSB may pick it up again (but for most WSB’ers it’s probably too soon because many people there lost a ton of money from the recent rugpull).
This is the search I have saved that checks the 3 squeeze subs that I know of: reddit.com: search results - (subreddit:onesqueezedd OR subreddit:squeezeplays OR subreddit:shortsqueeze) AND bbby
Last year they also pumped Revlon when it was going bankrupt, and IIRC it was still trading at goofy prices up to the moment REV was delisted. So I imagine the price essentially gapped down to zero or close to it (since bond holders etc would get paid first) and people were left holding the bags. The same could happen with BBBY, or the company might dilute shares again (like they did after Q3).
Perhaps the Hertz/Revlon phenomenon is the new norm for every bankrupt / near-bankrupt company going forward. I hadn’t considered that, so I was lucky with the timing of my exit–I covered last week at $1.30 only because I might want to take funds out of my account to pay taxes.
Probably just people manipulating the stock on social media to pump and dump it. CVNA has some hits in my reddit search. Big volume spike the past couple of days.
And now CVNA is dumping at the same time BBBY is.
social media people have figured out a) get big enough following b) pump and dump on them relentlessly c) laugh with all the $$$$
I know people were idiots a long time ago too, but I’d like to think after getting fooled a few times they’d oh idk, stop listening to them, not in this era Even back then they did leave the town to go to the next one for the same scam.
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There’s always a few people who win on each run and vouch for the scammers. It’s also quite easy and cheap to buy followers on Twitter or up votes on Reddit.