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US Hedge Funds Take a Beating- from kids


NANOJAMBO

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NANOJAMBO

https://imgur.com/gallery/JBejsIL

 

A story of how a bunch of internet geeks decided to beat hedge fund managers at their own game and now Wall St is getting seriously worried. One fund alone stands to lose $13 BILLION after shorting the share price - which climbed from 30 cents to $300 . 

 

 

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Maple Leaf

Option trading is a very risky business; it's gambling as opposed to investing.  If you deal in "call" options there is literally no limit to the amount of money you can lose.

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'Mon the geeks!

 

Shorting stocks is a reprehensible thing anyways. Hedge funds are dicks.

Zero lessons were learned from the 2008 crash.

Nations printed trillions in cash, gave it all to the banks and things carried on as usual.

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fancy a brew

:jjyay:

 

You love to see it. 

But big business has historically found ways to socialise its losses, hopefully this one turns out differently.

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25 minutes ago, Cade said:

'Mon the geeks!

 

Shorting stocks is a reprehensible thing anyways. Hedge funds are dicks.

Zero lessons were learned from the 2008 crash.

Nations printed trillions in cash, gave it all to the banks and things carried on as usual.

 

Why is is reprehensible? Short sellers have identified and punished lots of frauds. Most recently Wirecard and NMC Health. Do you think managers fraudulently fleecing investors should be able to get away with it? 

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Maple Leaf
30 minutes ago, Cade said:

'Mon the geeks!

 

Shorting stocks is a reprehensible thing anyways. Hedge funds are dicks.

Zero lessons were learned from the 2008 crash.

Nations printed trillions in cash, gave it all to the banks and things carried on as usual.

 

Depends on your point of view, I suppose.

 

imo, making money from stocks going down is no more reprehensible than making money from stocks going up.

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It is similar to what happened to hedge funds around 10-15 years ago when they thought Audi shares were going to fall but unbeknown to them VW were planning on buying a major stake and for a short period they were the most valuable company in the world. 

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A Boy Named Crow

The fund might have taken a hit, but its the investors in that fund who will suffer. Hopefully they're all fatcat capitalist hyena types, and not a bunch of "mums and dads" hoping to grow their life savings so they can maybe retire one day...

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14 minutes ago, A Boy Named Crow said:

The fund might have taken a hit, but its the investors in that fund who will suffer. Hopefully they're all fatcat capitalist hyena types, and not a bunch of "mums and dads" hoping to grow their life savings so they can maybe retire one day...

This is the thing. I don't know a great deal about how hedge funds operate but generally the problem with the "financial world" is that pretty much all of us will have a significant stake in it even if we are hardly aware of it. If you have a pension it is likely to be invested in stocks and shares - and various middlemen will be getting enriched along the way using your cash. But the beauty for them, is that if their investments (using your cash) turn out to be hopeless, they won't have to pick up the tab. It's your pension that takes the hit.

 

I would guess that many of the big companies we shop with will invest money with hedge funds. So if a hedge fund makes a big loss, one way or another I expect that most of it will end up being passed on to the public at large through higher prices etc. 

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A Boy Named Crow
7 minutes ago, stirlo said:

This is the thing. I don't know a great deal about how hedge funds operate but generally the problem with the "financial world" is that pretty much all of us will have a significant stake in it even if we are hardly aware of it. If you have a pension it is likely to be invested in stocks and shares - and various middlemen will be getting enriched along the way using your cash. But the beauty for them, is that if their investments (using your cash) turn out to be hopeless, they won't have to pick up the tab. It's your pension that takes the hit.

 

I would guess that many of the big companies we shop with will invest money with hedge funds. So if a hedge fund makes a big loss, one way or another I expect that most of it will end up being passed on to the public at large through higher prices etc. 

Yup, the game is completely rigged in favour of those with the means, to allow them to fleece those without the means. Marx wasn't far wrong really...

Edited by A Boy Named Crow
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9 hours ago, A Boy Named Crow said:

The fund might have taken a hit, but its the investors in that fund who will suffer. Hopefully they're all fatcat capitalist hyena types, and not a bunch of "mums and dads" hoping to grow their life savings so they can maybe retire one day...

I think most people able to invest into hedge funds are the fat cat types you mention. Be interesting to hear from someone who knows more than me if that is the case.

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Governor Tarkin
10 hours ago, A Boy Named Crow said:

The fund might have taken a hit, but its the investors in that fund who will suffer. Hopefully they're all fatcat capitalist hyena types, and not a bunch of "mums and dads" hoping to grow their life savings so they can maybe retire one day...

 

This.

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Like a lot of other things, the entire system shouldn't be set up in such a way that it allows 4chan to absolutely ruin it overnight.

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49 minutes ago, GinRummy said:

I think most people able to invest into hedge funds are the fat cat types you mention. Be interesting to hear from someone who knows more than me if that is the case.


Nope. Most certainly not the case. 
 

Most investments in hedge funds are generally through organisations looking after pensions, insurers and the likes. There will be a large number of individuals who have invested, I myself have a lot of investment via a number of managed funds. Whilst, I’d like to be a fat cat, I haven’t quite reached that status 😞

 

Generally, when these things collapse ie. Woodford Fund it hits the least wealthiest the hardest, which is generally Mr&Mrs Muggins who pension and retirement funds are tied in to the market and not with any risk spreading, 
 

It makes some people feel better to think some billionaire has taken a hit, they haven’t or not one that will register. Mr & Mrs Muggins are probably devastated that half their pension pot or whatever has disappeared. 

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2 minutes ago, Lord BJ said:


Nope. Most certainly not the case. 
 

Most investments in hedge funds are generally through organisations looking after pensions, insurers and the likes. There will be a large number of individuals who have invested, I myself have a lot of investment via a number of managed funds. Whilst, I’d like to be a fat cat, I haven’t quite reached that status 😞

 

Generally, when these things collapse ie. Woodford Fund it hits the least wealthiest the hardest, which is generally Mr&Mrs Muggins who pension and retirement funds are tied in to the market and not with any risk spreading, 
 

It makes some people feel better to think some billionaire has taken a hit, they haven’t or not one that will register. Mr & Mrs Muggins are probably devastated that half their pension pot or whatever has disappeared. 

Thanks for the clarification. I thought there was some sort of distinction between a hedge fund and the likes of Woodfords fund that are available to retail investors but I suppose if big pension funds and funds (like Woodfords) invest in hedge funds then everyone is affected.

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It is a shame for those who lose out but that's sort of the nature of the game, as harsh as that sounds, and I don't think anyone can be under the illusion when investing of anything other than  it may end up with them losing out.

 

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2 minutes ago, GinRummy said:

Thanks for the clarification. I thought there was some sort of distinction between a hedge fund and the likes of Woodfords fund that are available to retail investors but I suppose if big pension funds and funds (like Woodfords) invest in hedge funds then everyone is affected.


Hedge Fund are just way more aggressive and deal in the short terns markets to pursue higher returns than say a mutual fund. They also leverage to much greater extend so are inherently way more risky as the shorting is showing up, 

 

They are generally seen as a bit more exclusive. Though that’s down to their appetite for risk than which wouldn’t be all that attractive to certain type of investment ie. Mr &Mrs Muggins who are probably just looking to beat inflation as safely as possible. 
 

I personally believe in the stock market for longer term returns. that be proven over a long long period of time. Hedge fund is a lot more on the gambling end of the scale. 

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Governor Tarkin
10 minutes ago, Taffin said:

It is a shame for those who lose out but that's sort of the nature of the game, as harsh as that sounds, and I don't think anyone can be under the illusion when investing of anything other than  it may end up with them losing out.

 

 

I'm too feart to put my savings in to managed funds. They're earning me piss all at the moment but I can't stand the thought of losing it all.

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7 minutes ago, Lord BJ said:


Hedge Fund are just way more aggressive and deal in the short terns markets to pursue higher returns than say a mutual fund. They also leverage to much greater extend so are inherently way more risky as the shorting is showing up, 

 

They are generally seen as a bit more exclusive. Though that’s down to their appetite for risk than which wouldn’t be all that attractive to certain type of investment ie. Mr &Mrs Muggins who are probably just looking to beat inflation as safely as possible. 
 

I personally believe in the stock market for longer term returns. that be proven over a long long period of time. Hedge fund is a lot more on the gambling end of the scale. 

Very interesting. Thank you.

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6 minutes ago, Governor Tarkin said:

 

I'm too feart to put my savings in to managed funds. They're earning me piss all at the moment but I can't stand the thought of losing it all.

 

I've got some smallish amounts in managed funds but also sitting on savings for the same fear. It's not working for me sat in my bank, but I'm terribly risk averse with money, despite not really being a risk averse person in general.

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Dean Winchester

It's going to be interesting when the shorts are called. Rumour is tomorrow to early next week.

 

If the price stays the same they'll be forced to pay back at the current share price... But they'll also need to do it more than once for each share since they've shorted around 140%. It looks like a fabulous game of chicken to be fair :lol::lol:

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Governor Tarkin
5 minutes ago, Taffin said:

 

I've got some smallish amounts in managed funds but also sitting on savings for the same fear. It's not working for me sat in my bank, but I'm terribly risk averse with money, despite not really being a risk averse person in general.

 

Aye I'm the same.

I'm cool with the long game though so maybe can snap up a property or two as a cash buyer when the almost inevitable Brexit/Covid price crash arrives.

 

We could be slum landlords, Taff'. Isn't that something to aspire to.

Edited by Governor Tarkin
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fancy a brew
36 minutes ago, Lord BJ said:


Nope. Most certainly not the case. 
 

Most investments in hedge funds are generally through organisations looking after pensions, insurers and the likes. There will be a large number of individuals who have invested, I myself have a lot of investment via a number of managed funds. Whilst, I’d like to be a fat cat, I haven’t quite reached that status 😞

 

Generally, when these things collapse ie. Woodford Fund it hits the least wealthiest the hardest, which is generally Mr&Mrs Muggins who pension and retirement funds are tied in to the market and not with any risk spreading, 
 

It makes some people feel better to think some billionaire has taken a hit, they haven’t or not one that will register. Mr & Mrs Muggins are probably devastated that half their pension pot or whatever has disappeared. 

 

It seems very unlikely Mr and Mrs Muggins would have anything like half their pension invested in a single hedge fund.

Unless they were keen on gambling with their money, in which case win some lose some.

 

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10 minutes ago, Governor Tarkin said:

 

Aye I'm the same.

I'm cool with the long game though so maybe can snap up a property or two as a cash buyer when the almost inevitable Brexit/Covid price crash arrives.

 

We could be slum landlords, Taff'. Isn't that something to aspire to.

 

It would need to be an almighty crash for me to pick up a house as a cash buyer...never mind two 😭😭

 

Picturing it now though on my LinkedIn:

'Taffin - project management/slum landlord'

Certainly has an aspirational ring to it.

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Governor Tarkin
1 minute ago, Taffin said:

 

It would need to be an almighty crash for me to pick up a house as a cash buyer...never mind two 😭😭

 

Picturing it now though on my LinkedIn:

'Taffin - project management/slum landlord'

Certainly has an aspirational ring to it.

 

Flats, my good chap. Flats.

 

During the 2008 slump an average 1 bed in Gorgie dropped from ~  110k to ~ 70k, which was still almost double the price from the turn of the millenium.

Sitting at around 130k now.

 

Have your wad at the ready. 👍

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Geoff Kilpatrick

For those feeling sorry for the hedge fund, just remember it's their own fault for creating the one way bet by short selling more shares than there were in existence. That should never be allowed to happen.

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32 minutes ago, Geoff Kilpatrick said:

For those feeling sorry for the hedge fund, just remember it's their own fault for creating the one way bet by short selling more shares than there were in existence. That should never be allowed to happen.

Yup. 

 

And as someone else alluded to, it's highly unlikely anyone's pension, even old Mr and Mrs Muggins, is going to take a hit. Pensions are normally invested into low risk funds that produce steady, consistent returns. Not this Labrokes style punt that looks set to blow up. 

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7 minutes ago, Norm said:

Yup. 

 

And as someone else alluded to, it's highly unlikely anyone's pension, even old Mr and Mrs Muggins, is going to take a hit. Pensions are normally invested into low risk funds that produce steady, consistent returns. Not this Labrokes style punt that looks set to blow up. 

Exactly. Less than 10% of UK pension funds invest in hedge funds and for those that do, the allocation would only be around 1-2%. 
 

This lot are one of thousands going/gone tits up in the past year or two. Always harder to find the losers in a bull market!

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1 hour ago, Governor Tarkin said:

 

Flats, my good chap. Flats.

 

During the 2008 slump an average 1 bed in Gorgie dropped from ~  110k to ~ 70k, which was still almost double the price from the turn of the millenium.

Sitting at around 130k now.

 

Have your wad at the ready. 👍

 

I'll maybe get a front door in that case😭😭

 

Might just stick the lot on GameStop afterall

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A Boy Named Crow
3 hours ago, GinRummy said:

I think most people able to invest into hedge funds are the fat cat types you mention. Be interesting to hear from someone who knows more than me if that is the case.

I believe pension funds invest in them,  so the mums and dads are still on the hook!

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8 minutes ago, A Boy Named Crow said:

I believe pension funds invest in them,  so the mums and dads are still on the hook!

Read your other post after I replied 


makes sense

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A Boy Named Crow
17 minutes ago, GinRummy said:

Read your other post after I replied 


makes sense

Someone else who might know more than me has said they don't invest in them. Who knows? 

Edited by A Boy Named Crow
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I am really hopeful that if this causes the US Government especially to act, while they're still faffing about not sending checks out to cold, hungry people, that it is finally the straw that breaks the camel's back.

 

In the meantime...

 

 

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17 minutes ago, A Boy Named Crow said:

Someone else who knows more than me has said they don't. Who knows? 

I'm no financial big wig but as I understand it, pensions are primarily invested in low risk, long term investment funds.

 

I believe your money may be invested in slightly riskier higher pay off funds at the beginning of it's life cycle but generally, because of shit like this, pensions are normally invested in long term safe options. 

 

The issue with the crash ****ing so many people, was that pensions had been invested in bonds based on the property market, because it was traditionaly safe with solid returns. Who doesn't pay their mortgage?

 

Unfortunately the sub prime mortgage market completely collapsed it, screwing everyone.

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3 hours ago, jamboy1982 said:

I’m involved, bought some yesterday 

 

Hasn't it levelled off over the last 24/36 hours?  Seems to be sitting around the $350 mark.  Hopefully you get something out of it, because the trends look like it's peaked, or is at least starting to.

 

Would have ****ing loved to have got involved with that at the very start.

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2 minutes ago, tian447 said:

 

Hasn't it levelled off over the last 24/36 hours?  Seems to be sitting around the $350 mark.  Hopefully you get something out of it, because the trends look like it's peaked, or is at least starting to.

 

Would have ****ing loved to have got involved with that at the very start.

 

In pre-open trading GameStop is currently sitting at $475

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Just now, Justin Z said:

 

In pre-open trading GameStop is currently sitting at $475

 

****ing hell, I love the internet :lol: 

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Some figures recently came out that American billionaires had increased their wealth by $3 trillion during the pandemic, at the same time that workers had lost $2.8 trillion in wages.

 

This is a tiny bite out of a massive ankle. But I continue to hope enough people are angry enough that things are finally going to stop being rigged against the little guy. Time will tell.

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11 minutes ago, Justin Z said:

Some figures recently came out that American billionaires had increased their wealth by $3 trillion during the pandemic, at the same time that workers had lost $2.8 trillion in wages.

 

This is a tiny bite out of a massive ankle. But I continue to hope enough people are angry enough that things are finally going to stop being rigged against the little guy. Time will tell.

Honestly, if I wasn't unemployed right now, I'd be chucking what little savings I have at this. Not to make money, just to be one of the little guys doing their bit to bring the ****s down a peg or two. 

 

The disappointing thing is that shit will be put in place to stop it happening again. As you say, the game is rigged and they'll close this loophole sharpish. 

 

But at least this once, the little guy will get to stick a boot in. And what a glorious boot it will be. 

 

I'm actually surprised at how much I want this to happen. Like, really, really want this to happen. It'll be a very bright spot in what has been a shite state of affairs for quite some time. 

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32 minutes ago, Norm said:

I'm actually surprised at how much I want this to happen. Like, really, really want this to happen. It'll be a very bright spot in what has been a shite state of affairs for quite some time. 

 

Couldn't agree more

 

Student debt crisis solved : boomershumor

 

image.png.fcd0ce85969dd8eebd137ce4217049c5.png

 

:jjyay:

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And now little investors have had their trading suspended, allowing the big fish to 'recalibrate' their holdings.

 

Disgusting stuff, this should be the kind of thing that starts revolutions.

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Governor Tarkin
3 minutes ago, Craig_ said:

And now little investors have had their trading suspended, allowing the big fish to 'recalibrate' their holdings.

 

Disgusting stuff, this should be the kind of thing that starts revolutions.

 

We need more revolutions imo.

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Dean Winchester
Just now, Craig_ said:

And now little investors have had their trading suspended, allowing the big fish to 'recalibrate' their holdings.

 

Disgusting stuff, this should be the kind of thing that starts revolutions.

Yup pretty much all the brokers the retailers use have stopped you from placing buy orders for GME. Mental.

 

 

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6 minutes ago, Dean Winchester said:

Yup pretty much all the brokers the retailers use have stopped you from placing buy orders for GME. Mental.

 

My bank is claiming "technical issues" at the moment. We small-timers have no chance.

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2 minutes ago, Justin Z said:

 

My bank is claiming "technical issues" at the moment. We small-timers have no chance.

 

The technical issues being that they probably have serious interests in the stock price plummetting! :lol: 

 

You can't buy any more, but that doesn't stop you holding on to what you have. They're going to try and manipulate it so it looks like people are panic selling, but just stick with it.

 

A lot of posts on this thread: https://www.reddit.com/r/wallstreetbets/comments/l6w4uo/robinhood_will_not_let_new_options_or_shares_be/

 

 

There are a lot of small timers with their fingers in the pie.

 

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Dean Winchester
4 minutes ago, tian447 said:

 

The technical issues being that they probably have serious interests in the stock price plummetting! :lol: 

 

The irony of the name of the App in question isn't lost on me :lol: 

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jamboy1982

I have cashed in. Bought at 300 sold at 450. Demand is so high I got 450 when the actual price was 380. I set a take profit limit. Tasty wee profit to start the year off!

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