Why Did Reddit Trigger a GameStop Stock Surge?

[russ_watters]

I have made no assumption nor guess at the percentage of those people. I just focused on that group...all I get is "most would still be better off saving the money. ", which may be true, but I don't see the argument.

Ok, I'll put a finer point on it: "don't have much to lose" is a gambling fallacy and it's harmful. It's much of the reason why the demographics of casino/lottery gambling is skewed toward the poor and it is harmful to them. It's part of a collection of mindsets that helps make and keep people poor.

Converting part of my fiat into cryptos... [flip]

That's not how it works, and you know it. :) The only way to send money to the exchange without a % fee is by using SEPA transfer. But I agree with you about taking the money out of that particular bank.

That first part wasn't an answer to the question, but the second may be at least a partial answer. You wanted to wire transfer from some account (type?) to an exchange (which?) because the exchange(?) charges a fee for other ways (such as?).

Not really convincing me that "investing" in cryptos is worse than buying a pack of cigarettes. I'm open to change my mind, but that argument isn't really convincing to me.

The argument is a pointless distraction. That's why I responded with gibberish. Whether cigarettes are worse than crypto or not I neither know nor care and it has nothing useful to say about this discussion. The bank doesn't have responsibility over your health, only your money.

True as of now. But I hope things will change in the future.

I just don't see a reason why a significant number of people would ever want the features of crypto, other than its current primary userbase (criminals). It just isn't very good/useful and more time won't change that.

 

[russ_watters]

Incidentally, as this has turned into a crypto thread, cyrpo is having a pretty bad couple of days. More company collapses, and more government (EU) regulation is pushing it down again (in addition to leading the stock market down).

https://www.cnbc.com/2022/06/30/eu-agrees-to-deal-on-landmark-mica-cryptocurrency-regulation.html
https://www.forbes.com/sites/siladi...eatening-more-market-turmoil/?sh=7ce3d72a574b
https://www.cnbc.com/2022/06/30/bit...again-as-pressure-mounts-on-crypto-firms.html

 

[BWV]

No. I wouldn't rule it out, and Meta aren't the first to try (google glass?), but I don't think it's something people really want. Cool for movies though (Ready Player One, Free Guy).

Unfortunately, I don't know how you can deal with this, like everything online it seems to bring out the worst in people

https://www.glamourmagazine.co.uk/article/metaverse-misogyny

Last year, Allen was waiting in the lobby of Meta’s (Facebook’s) Horizon Venues – a platform where crowds of avatars watch music concerts and sporting events. “I started talking to the other female avatar in the room, only to discover that she was a child – she told me she was seven. We chatted for a few minutes before we were suddenly interrupted by a big group of men who joked that there were so many of them they could gang rape us.” Allen immediately moved her avatar between the men and the girl, warning them that the girl was a child. “They did back off, but even if they thought it was banter, comments like those are not OK,” she adds, frustrated, noting that although Meta’s lower age limit is 13 (meaning the girl shouldn’t have been there), it’s easy to misinterpret people’s ages as the avatars available all look between around 21 and 50-years-old.

 

[russ_watters]

Unfortunately, I don't know how you can deal with this, like everything online it seems to bring out the worst in people

Yeah, that's a big problem. I'm not sure how that can be overcome to make that world non-toxic. See also: Westworld.

 

[kyphysics]

No. I wouldn't rule it out, and Meta aren't the first to try (google glass?), but I don't think it's something people really want. Cool for movies though (Ready Player One, Free Guy).

I think the main thing holding me back is the dumb headgear that looks like it weighs 500 lbs. Get it down to like Star Wars' Jordy's thin visor and light-weight? Now, we're talking.

Also, I think they have options to to interesting augmented reality and not just complete hermetically sealed VR. Like, suppose you where a visor and walk past McDonald's. Instead of walking inside, you can see an "overlay" of the menu with pricing using a visor/VR/AR glass.

Stuff like that could be interesting. Maybe replaces need for mobile phone apps in many cases?

Gaming should be an obv. demand for it. I do have doubts people would replace 2-D internet for 3-D virtual version entirely, though.

 

[BWV]

Yeah, that's a big problem. I'm not sure how that can be overcome to make that world non-toxic. See also: Westworld.

Yes, the risk of getting your ass kicked or thrown in jail seems a necessary deterrent in the real world

 

[kyphysics]

Not to be like totally gross/graphic, but how can a person be "raped" in the metaverse? I mean, these are avatars with no "bodily" movements resembling sexual actions, right?

Also, the victim can just log out/exit, right?

Lastly, are these sessions recorded in any way, so as to allow post-assault disciplinary action? Maybe there can be automated censors...like how you cannot curse on this forum...built in?

 

[BWV]

https://www.bvp.com/atlas/why-i-m-cryptophobic

 

[russ_watters]

Yes, the risk of getting your ass kicked or thrown in jail seems a necessary deterrent in the real world

Or fired.

 

[russ_watters]

Not to be like totally gross/graphic, but how can a person be "raped" in the metaverse? I mean, these are avatars with no "bodily" movements resembling sexual actions, right?

No, but that's really neither here nor there.

Also, the victim can just log out/exit, right?

That isn't how sexual harassment/assault works. "You could just walk away" isn't the point. Heck, forcing someone to leave the situation is often a goal. The harassment itself is a wrong.

Lastly, are these sessions recorded in any way, so as to allow post-assault disciplinary action? Maybe there can be automated censors...like how you cannot curse on this forum...built in?

They could, but they don't and even if they did, it would be hard to police. Part of the online allure is anonymity and lack of accountability. Strictly moderated venues are less "fun". And this is part of the reason I use my real name here. I want accountability.

 

[strangerep]

I'm not sure how that can be overcome to make that world non-toxic.

It would need mandatory smell-o-vision. E.g., the actual smell of a monster breathing on you, or the actual smell of genitals, or the actual smell of the insides of a human body after its stomach and intestines been slashed open with a sword, or the actual smell of an opened coffin/tomb, etc, etc. If one had to cop a squirt of the real-world smell after performing such actions it might deter (some) people. No more hiding from the stench of one's actions.

 

[fluidistic]

https://www.bvp.com/atlas/why-i-m-cryptophobic

The person who wrote the article doesn't really understand nor know what cryptocurrencies are.
For example, he seems unaware of what happens in el Salvador, how they implemented a system in which the government has all eyes on everything that occurs (completely transparent, 0 opacity), while the general population has no such vision (unless they possibly hack the government's system, or a leak appears from the government side). On the top of that, they don't use bitcoin, but a clone of Algorand, meaning they can use smart contracts. What this mean is that the government can, at all times, do whatever it wants with the crypto of whoever it wants, meaning the government can get its taxes if it wants to. So when I read the sentence

It is rather a naïve notion that anything can be an asset or currency if enough people believe it to be and is cynically likened to fiat currency issued by the state even though the state’s fiat powers come from its credibility, transparency and the power of taxation

, I think this person has no understanding of cryptocurrencies.

Overall he is extremely scared that bitcoin/ethereum, as they are, would be used (even though he doesn't seem to be aware that they are transparent, and that ethereum has smart contracts capability). He never consider that the government could implement something like in el Salvador, which he apparently would be very happy with, but which is terrible regarding the human right of privacy.

Those are my 2 satoshis.

Edit: He also criticizes the fact that a small % of wallets own most bitcoins. Well, the creator of bitcoin mined something like 1 million to 2 million bitcoins (out of the 21 millions that will ever be mined). He never, ever transferred those into other wallets (except for a few little donations at the beginning). It is clear that he has done it so that no 51% attack would be done in the early days. He just ensured the train was on track, and that it would continue its path when he would leave the train all by itself. It wasn't for greed (else he would have converted at least some of it into fiat to this day, but we know he hasn't.).

 

[fluidistic]

Ok, I'll put a finer point on it: "don't have much to lose" is a gambling fallacy and it's harmful. It's much of the reason why the demographics of casino/lottery gambling is skewed toward the poor and it is harmful to them. It's part of a collection of mindsets that helps make and keep people poor.

Ok, I didn't know this.
With cryptos though, we don't know the odds of winning in the long term. For some cryptocurrencies, I think the chances are well above 1 in 14 millions (such as the one of the lotto). The thing is, a good project isn't guaranted to be popular and monetarily worth it in the long run, luck is involved, and I recognize that cryptos are extremely risky as "investment".

That first part wasn't an answer to the question, but the second may be at least a partial answer. You wanted to wire transfer from some account (type?) to an exchange (which?) because the exchange(?) charges a fee for other ways (such as?).

I have a bank account in a public bank (owned by the state). I want to perform a wire transfer to a centralized exchange where it is possible to buy cryptocurrencies. Even though these exchanges are shady and go against the philosophy of cryptos (they are similar to banks in many aspects), they aren't "forbidden" by the law. They accept SEPA transfers, and the fee is either non existent, or 1 euro. This is much better than using a credit card (fee is above 2%). However my bank doesn't allow me to perform the SEPA transfer. I solved the problem by registering in a German online bank that doesn't prevent me to perform the SEPA transfer. But still, my state bank is preventing me from using my money as I want.

I just don't see a reason why a significant number of people would ever want the features of crypto, other than its current primary userbase (criminals). It just isn't very good/useful and more time won't change that.

Most people use crypto has investment, either passively or actively (liquidity pools/staking with PoS cryptos, and lending/borrowing). Criminal use is less than 2% or so, in fact it is even lower than the % of fiat users. Source https://www.europol.europa.eu/cms/s...racing the evolution of criminal finances.pdf and reference 36 in particular (which I cannot access).

 

[fluidistic]

The argument is a pointless distraction. That's why I responded with gibberish. Whether cigarettes are worse than crypto or not I neither know nor care and it has nothing useful to say about this discussion. The bank doesn't have responsibility over your health, only your money.

Then something is wrong with banks. Why not let me do a wire transfer to a legal centralized cryptocurrency exchange? After all, banks have 0 problem if I gamble in the casino and lose all my money there. If they cared about my money, they wouldn't let me do that.

 

[kyphysics]

That isn't how sexual harassment/assault works. "You could just walk away" isn't the point. Heck, forcing someone to leave the situation is often a goal. The harassment itself is a wrong.

They could, but they don't and even if they did, it would be hard to police. Part of the online allure is anonymity and lack of accountability. Strictly moderated venues are less "fun". And this is part of the reason I use my real name here. I want accountability.

I agree with your first paragraph.

As for the metaverse policing, I'm sure there will be SOME, but a good question is how much. Maybe there will be like "PG" versions/kid-safe friendly versions? YouTube has like a kids version and they don't allow comments on videos of young kids even in the adult version.

The metaverse will have its challenges, but I suspect it'll learn to deal with them and still thrive the way the internet has with all the chances of anonymity. Ultimately, any "reality" will have the challenge of human beings - the good and bad. I'm afraid that part will never change.

 

[Vanadium 50]

Then something is wrong with banks.

Banks carry insurance. To carry that insurance, they agree not to do certain risky things. This is just like homeopwners insurance not allowing you to do risky things - e.g. even though I own my house, I can't put an oil refinery in my back yard.

You are certainly free to find a non-insured bank. Expect little recourse if something goes wrong - even if it had nothing to do with your account.

 

[Vanadium 50]

10 baggers are 10x gainers!

Finally, we're getting some goals. I know it's commonplace for people to roll their eyes and ignore me when I talk about goals, but if you don't know where you are going, any path will take you there.

A good goal is "buy a house", "retire comfortably" or "move out of my parents' basement". (The latter is one, IMHO, should be more popular than it seems to be.) "I want to buy a stock that goes up 10-fold" is a terrible goal.

(1) This can be achieved trivially by buying all the stocks there are. Through various funds, I estimate I own about 5000 different stocks. Surely one of them will go up by 10x. Probably one already has.

(20 "No, no" one might say. "That doesn't count. I need to figure out which stock will do that, so I can concentrate my investments there!" The thing is, nobody can do that consistency. Earlier upthread we were discussing a great stock picker - until she wasn't.

If it were possible to pick that special stock in advance, the big financial giants would be devoting billions to it. The conceit here is that somehow one is smarter than every analyst in every market and can pick this stock through skill and not luck. To that, I can say I'm happy to be your counterparty.

 

[fluidistic]

Banks carry insurance. To carry that insurance, they agree not to do certain risky things. This is just like homeopwners insurance not allowing you to do risky things - e.g. even though I own my house, I can't put an oil refinery in my back yard.

You are certainly free to find a non-insured bank. Expect little recourse if something goes wrong - even if it had nothing to do with your account.

Both the state bank I'm in, and that online bank from Germany have the same insurance, common to (all?) union European banks. If I'm not mistaken, it's 100k or 200 k euros insured by default.
The online German bank is more "crypto friendly", it doesn't prevent me from using SEPA to crypto exchanges, and it also has web pages explaining several cryptocurrency related things.
I haven't had any problem with it, so far.

 

[Vanadium 50]

I am more familiar with US banking rules than German rules. However, I expect that the German rules are stricter. The last time there was hyperinflation and massive bank failures, they brought in an out-of-work Austrian paper-hanger to fix things.

That did not end well.

 

[BWV]

EU banks post 2008 have comparable regulations to US banks, like the US banks, most became insolvent during the GFC and would have failed absent gov intervention

Your bank allowing you to transact in crypto is far different than the bank carrying it on their balance sheet.

 

[russ_watters]

Ok, I didn't know this.

Yeah, casinos are truly evil. But I don't want to get too sidetracked on that...

With cryptos though, we don't know the odds of winning in the long term.

Are you saying that makes it better? To me that just makes it scary and something to avoid. Like a casino where you don't know the odds except that they are really bad.

For some cryptocurrencies, I think the chances are well above 1 in 14 millions (such as the one of the lotto).

That isn't a great way to characterize the odds for investments and wow, I hope you don't really think crypto is that bad (and are doing it anyway!). Lotteries have very high payouts and very low odds of success so they don't really function the same as investment. Most investments are more like casinos where you have a pre-calculated, expected return over time, with some variability. Over the long term, they converge toward historical trends. For a mutual fund it's maybe +8% annually after inflation. For a casino it's on the order of -5% per bet. You might have a few big wins and a lot of small losses, and over time it converges to that -5%.

In a lottery, you either win a lot on a small bet or you lose everything. Even if the odds for crypto are a lot better (1 in 10? 1 in 5?), you're still at least implying that you are willing to bet a large sum of money with a very high likelihood (9 in 10? 4 in 5?) of losing it all and a small likelihood of maybe a 10x gain. That's...awful. I can't imagine signing-up for that.

...I recognize that cryptos are extremely risky as "investment".

Glad to hear that, but as V50 says, I still get the sense that you, like most crypto investors, don't have a plan and goals...which are hard to have for a bet as unpredictable as crypto.

However my bank doesn't allow me to perform the SEPA transfer. I solved the problem by registering in a German online bank that doesn't prevent me to perform the SEPA transfer. But still, my state bank is preventing me from using my money as I want. [separate post]Then something is wrong with banks. Why not let me do a wire transfer to a legal centralized cryptocurrency exchange?

That's a feature, not a bug. It was added after very hard-earned lessons a hundred years ago. You may find later that you wish you had taken the hint. A lot of crypto investors have learned it the painful way.

After all, banks have 0 problem if I gamble in the casino and lose all my money there. If they cared about my money, they wouldn't let me do that.

That I'm not sure about. I haven't been to a casino in a while and always used cash as far as I can remember. I don't know if they do large wire transfers (or credit cards). There's a lot wrong with casinos and how they are regulated in my opinion, but arguing banks should do the same wrongs in other cases is a weird rationale.

Most people use crypto has investment, either passively or actively (liquidity pools/staking with PoS cryptos, and lending/borrowing). Criminal use is less than 2% or so, in fact it is even lower than the % of fiat users. Source https://www.europol.europa.eu/cms/sites/default/files/documents/Europol Spotlight - Cryptocurrencies - Tracing the evolution of criminal finances.pdf and reference 36 in particular (which I cannot access).

I know, and you're flip-flopping due to the schizophrenic nature of crypto. Again, you yourself said that the value comes from its utility, and you acknowledge the utility is highly limited and mostly criminal. But now you're flipping to say it's mostly an investment -- in that case (removing the utility reason for its value), it's value has literally nothing to base it on.

 

[russ_watters]

A good goal is "buy a house", "retire comfortably" or "move out of my parents' basement". (The latter is one, IMHO, should be more popular than it seems to be.) "I want to buy a stock that goes up 10-fold" is a terrible goal.

However, "I want to buy a fund that goes up 10-fold" is a pretty good and easy goal. It just requires time and a sensible investment. If you're in your 20s and want that and have a few thousand to "bet", drop it in a mutual fund and leave it there for 30-40 years. Boom. 10x gain.

 

[BWV]

Most investments are more like casinos where you have a pre-calculated, expected return over time, with some variability. Over the long term, they converge toward historical trends. For a mutual fund it's maybe +8% annually after inflation. For a casino it's on the order of -5% per bet. You might have a few big wins and a lot of small losses, and over time it converges to that -5%.

I would define an investment as something that offers a risk premium - meaning the return expectation less the return available from some risk-free investment like T-bills increases with the volatility, i.e. something better than a fair gamble. Stocks and bonds have risk premiums, derivative financial instruments like futures and options do not, other than the extent they offer exposure to the underlying's risk premium.

https://www.credit-suisse.com/media...ent-returns-yearbook-2022-summary-edition.pdf

The annualized real return on US stocks 1900-2021 is around 6.7% and gov bonds is around 2% (obviously gov bonds today do not offer 200 basis point yields over expected inflation, but that has been the average result)

 

[Vanadium 50]

So would you not consider a Certificate of Deposit an investment? It's hard to fuind a 1-year CD above 2%, but the last 52-week T-bill auction ended at 3% or so. Not saying there's a right or wrong answer here - just want your opinion.

(I'm still trying to figure out why people buy CD's at 0.85% for 11 months. You could buy a 26 week T-bill and get more interest in half the time.)

 

[BWV]

So would you not consider a Certificate of Deposit an investment? It's hard to fuind a 1-year CD above 2%, but the last 52-week T-bill auction ended at 3% or so. Not saying there's a right or wrong answer here - just want your opinion.

(I'm still trying to figure out why people buy CD's at 0.85% for 11 months. You could buy a 26 week T-bill and get more interest in half the time.)

Sure - CDs and bank deposits are just a proxy for Treasuries. Banks offer rates based upon what the Fed pays and their desire for capital - so if they don’t want to grow their loan book they won’t offer aggressive CD rates .

 

[BWV]

Decentralized finance is going just swell

https://www.investvoyager.com/blog/voyager-update-july-1-2022/

Voyager Update July 1, 2022​

Today, Voyager made the difficult but necessary decision to temporarily suspend trading, deposits, withdrawals, and loyalty rewards, effective at 2:00 PM Eastern Daylight Time on July 1.
This provides time to continue exploring strategic alternatives and preserve the value of the Voyager platform we have built together. We are in discussions with various parties and will provide additional information at the appropriate time. More information can be found here: Press Release.

 

[kyphysics]

The annualized real return on US stocks 1900-2021 is around 6.7% and gov bonds is around 2% (obviously gov bonds today do not offer 200 basis point yields over expected inflation, but that has been the average result)

Is that a real Wilshire 5000 return?:

S&P 500 or Nasdaq 100 real returns would be interesting.

 

[kyphysics]

Also, I wish Warren Buffett were younger, as I could follow one of two historically back-tested means of either benefitting from or beating his returns:

Method 1: Buy and sell what he does. There is a small delay between Berkshire's actions and when they are disclosed in 13f filings, but studies have shown you'd still have gotten a 17% (nominal) return just following this strategy.
Method 2: Only and always buy Berkshire when it's corrected 10% or more. Doing so would mean you mathematically beat Warren's own returns.

 

[BWV]

Is that a real Wilshire 5000 return?:

S&P 500 or Nasdaq 100 real returns would be interesting.

None of those indexes were around in 1900, but the number is an estimate of the entire, cap-weighted market return, comparable to the Wilshire 5000. Because smal cap stocks are a relatively small percentage of the total market cap, the returns of broad market indexes fall within tens of basis points of large cap index returns

 

[BWV]

Also, the Nasdaq 100 is mostly a subset of the S&P 500 - so not a good chart

 

[kyphysics]

Also, the Nasdaq 100 is mostly a subset of the S&P 500 - so not a good chart

I think the argument is that people say tech/Nasdaq has had better returns in the pastd few decades (vs. total stock market). Not sure about back to 1900, however.

Feel free to correct/fact check if I'm inaccurate. I've mostly heard this and haven't bothered to look (at least not for 50 years or more...).

 

[Vanadium 50]

Feel free to correct/fact check

Here's a nutty idea. Why don't you do your own fact-checking before your post?

NASDAQ opened in 1971. How many seconds do you think it took me to look this up? Four.

 

[BWV]

I think the argument is that people say tech/Nasdaq has had better returns in the pastd few decades (vs. total stock market). Not sure about back to 1900, however.

Feel free to correct/fact check if I'm inaccurate. I've mostly heard this and haven't bothered to look (at least not for 50 years or more...).

The NASDAQ 100 took an 80% drawdown in the early 2000s and did not recover until around 2015

There is always some sector or group of stocks outperforming, it’s been tech over the past decade, but likely it will be something else over the next ten years

Phillip Morris, BTW, has created more wealth than any other American stock

 

[Vanadium 50]

hillip Morris, BTW, has created more wealth than any other American stock

Are you including the boost it gave to health care stocks?

 

[kyphysics]

The NASDAQ 100 took an 80% drawdown in the early 2000s and did not recover until around 2015

There is always some sector or group of stocks outperforming, it’s been tech over the past decade, but likely it will be something else over the next ten years

Phillip Morris, BTW, has created more wealth than any other American stock

Yeah, tech can get very bubbly...but take it back 50 years...does it outperform?

Regarding the 15 year Nasdaq bear market, that applies only if you were dumb enough to have not taken some profits in 1999/2000 and/or put all your money into the market top in 2000 (and subsequently never bought the dip afterwards...), right?

If you're dollar-cost-averaging, what is the returns for S&P 500, Wilshire 5000, and Nasdaq over, say 30-50 years? Any significant diff?