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HOT TOPIC Reddit r/WSB bankrupts Hedge Fund using Robinhood

Andreas Thiel

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Just saw this ... a specultive post that says AMC might be used as a long hedge against GME short positions by high frequency trading companies (like Citadel):
View: https://www.reddit.com/r/Superstonk/comments/nqzo1o/i_got_what_you_quant_6221_trading_analysis_and_a/


According to this there is some room (up to $100 and slightly beyond) before AMC stops working as a hedge.

My favorite part:
The overnight/premarket moves in AMC have significantly contributed to AMC's outperformance of GME since last week, but during the regular trading session the two have moved nearly tick for tick, until today. I present you today's tape
 

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Andreas Thiel

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After finishing the book, I think that it sounds more like a trap and preparation to frame the aftermath discussions.

Apparently there have been several victims on the retail side in the past ... and they all had one thing in common: somebody told the victims that there would be a big payoff because, at some point, shorts would have to cover.
CNKM Diamonds should be a cautionary tale that proves that there is no such mechanism that will automagically buy all shares (even phantom shares) at any price. The investors there are considered "Entitlement" holders rather than Shareholders. According to the book, buying back phantom shares has not been a thing so far. It is more likely that the trades are rolled back if this escalates. Many brokers have messed with their customers positions, even deleted them or sold in the CNKM case.

There are some posts that say that BlackRock has joined that fight and a SPAC might have been prepared for that occasion. There is a chance that they (banks and brokers) will pull off a Houdini act and detangle Melvin and Citadel by unwinding their position to another participant.

I might feel different if the problem at the center of this development had never been properly addressed.
But there were several global killers caused by this issue and they managed to paint over the regulatory issues every time.
Even if naked short selling is eliminated through enforced regulation, fails to deliver can still be used strategically to carry the phantom shares forward.

During the housing crisis it is well established that there were issues with the MBS and CDS finance products. The fact that there was leverage is a side remark that comes up from time to time. The fact that trades were not settled was the reason that some banks and brokers were on the hook for 9 times the insurance amount. The symptoms have been dealt with, but the issue is alive and well.

When you look at how big the issue is in treasuries, then your mind starts to wander:

Considering that Eagletech Communications, Inc was ruined through the mechanism and the technology showed up years later in Google Voice ... it is hard not to enter tinfoil mode.

Apes make a huge mistake when they think that the DTCC not buying back their shares (phantom or real) at any price would be a huge deal and destroy all trust in the system. They fail to see how big of a deal it would be to let this play out and acknowledge the regulatory mistakes that were made.
At the very least my trust in the system has been destroyed.
 

Andreas Thiel

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Hmm, some interesting development with theroaringkitty aka Deep f*cking Value aka Keith Gill.

He is communicating through memes and it seems to me that he wants to communicate something important but does not get the point across so far.
Seems like a sobering message ... and superstonkers have already started killing their heroes if they dare say their 20m floor for GME shares is wrong.

I think his latest Tweets might mean that he is looking at other meme stocks. GME is already in space and might not be the best play for most people - there is some potential left when you consider the Russell index development. He also says he travels between time and space. I interpret that as a message to superstonkers that they should look at WallStreetBets again and look at the charts to find meme stocks that are not in a late stage (which AMC and GME are).

He posted a scene from Unbreakable, shortly before the train crashes.

My very bold interpretation is that we should look at Meme stocks that did not get hurt in the declines yesterday.
Went through them and stumbled across something when I got to WWE: World Wrestling Entertainment, (WWE) Valuation Measures & Financial Statistics

Held by institutions: 120.12%

Short of shares outstanding: 10.75%

Doesn't that look like a VW squeeze that has not been squoze? What else do I need confirmed? The media should discourage retail investors from getting in. Aaand:
World Wrestling Entertainment stock was trending on the Reddit board Wall Street Bets this morning, and little else was needed to push the stock higher. What we didn't see today was any news that should fundamentally change how investors view the stock. Reddit traders can move stocks short term, but the fundamentals are what Foolish investors should focus on.
 
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Summarized my thoughts. Seems like I was able post it at DDintoGME and am curious to see how well this ages and if it will be taken down or just voted down: https://www.reddit.com/r/DDintoGME/comments/ny2jtr View: https://www.reddit.com/r/DDintoGME/comments/ny2jtr/what_if_our_kitty_posted_some_sobering_tweets/

Please hear me out. There will be some uplifting speculation, but I feel like I need to post something that will be FUD for most apes. It shouldn't be. If we have gotten ahead of ourselves, we should appreciate a message that introduces the necessary doubt where we are wrong while reducing some uncertainty that currently exists.

I got on board post January squeeze and was deep in emotionally, but then I went through some difficult moments.

My appeal is: open your mind to the possibility that the community needs to pivot a little, even though the core of the DD is 99% correct.

My take on the Tweets is pure speculation. There are certain things we take for granted as have accepted as truths that deserve a closer look.

The difference in outcomes - if I am correct - could be:

  • MOAM (mother of all meltdowns) - We will actually slay the beast but not be billionaires. While we accomplish the improbable, none of us will celebrate and meltdowners will celebrate what they consider the mother of those
  • MOAR (mother of all revolutions) - We will actually slay the beast and quite a few of us will be pretty well off, all of us will be proud as f*ck and in a fortified position to say: fuq u, meltdowners
Strong indicators that there is an issue:

  • I was really disenfranchised when I had read "Naked, Short and Greedy", and thought: if I have read it right, there is no way voting will reveal f*ckery throught fails to deliver. Initially over voting was considered the governance issue that FTDs cause, so rather than eliminating all issues, they got away with "fixing" just that aspect by allowing the broker to forward pretty much anything they want as long as they don't forward too many votes. Really got me wondering if anybody else has read the book. I found out many have, but this kind of "FUD" got burried. Even after Wes clarified it, the posts that got to the top still said that there was something unseen about the result. I don't see it.
  • It was heartbreaking to see Dr. Trimbath being attacked for her sobering tweet. Just play the thought: all this is over and DFV says: "I never said the floor was 20m. If you had listened to me you could be a millionaire, but hodling alone was never going to get you there". Totally reasonable but sobering, but with our current way of thinking about FUD and what justice means, he would be crucified for it. We tell ourselves that we are great at counter DD, but in many ways we accept emotions as truths that are just the result of us getting carried away, because anything less will not be wife changing money and we need wife changing money. Yes, morally what we are doing is not the same as the parasitic organized crime that takes place, but at some point innocent victims would pay the price for the crimes of others.
  • Confirmation bias is a thing and I love the memes about it ... but you know the phenomenon that when somebody can describe the problem well, you make an unfortunate leap and assume their solution / product must be reliable and fix it? Atobitt's DD can be 100% correct, and people can still have inflated expectations for the MOASS. If nothing else I want you to ask, where is the DD that proves that shorts have to cover at any price? Yes, I know that somebody is now on the hook for phantom shares ... "entitlement" holders are in a better position than they were in the past, but any solution in a shit hits the fan scenario would and should still be resolved through efficient market rules. "It would destroy all trust in the system" is a stretch. Imagine the process to sort this out actually starts and huge strides are made. Will the public get behind an ape compensation for holding like that? Apes are now entitled to their 10 trillion that they won? Sure, have my retirement money. You were right - I see that now. After hodling for 10 months ... we have to admit they deserve it. Dr. Trimbath writes that several retail investors thought that long before Gamestop. Look at how this worked out for CMKM Diamonds holders. They too thought they had their moon tickets. Some of them still wonder what happened. Our situation is different, yes, and we should see our hodling pay off in some way. But this is mostly a crowded trade - so we might even have to fight to get our consolation prize.
  • There are many Tweets by theroaringkitty that I see as sobering. I feel like people are just not tuned into that frequency and don't want to discuss it. It might shatter their world view. We believe things like: he only ever liked the one stock and would never recommend anything else. But I feel like he tries to use apes and cats to differentiate between pouncing on new opportunities and holding on to the one stonk. The John Wick tweet says he is back, but maybe he is back mostly as a value investor?
Lets take a look at some of those sobering tweets:

Could do many honorable mentions, but I think there is a drift that you should be able to catch. "I keeps one in the chamber ...", withdrawing money etc.

That said, there are many positive things. The GME hypothesis that shorts can't get out of the hole that they dug ... that one is still on. We will look back at how we fought monsters etc.

I feel like this one is really important: https://twitter.com/TheRoaringKitty/status/1402777531476893707

My interpretation is - if you feel down because the 20m floor bubble has burst ... you can do better than fully staying in GME, which is partially a gamble now and might have a ceiling as low as just 10x-ing your money.

He sees a few meme stocks that have not run as much of their course yet and there are several moons that investors can shoot for.

I understand, by our current standards this sounds like the worst kind of FUD: feed the enemy and lower your expectations FUD.

Still, we know from looking at the charts that high frequency trading is used on meme stocks. Many of them serve as a long hedge against GME shorts ... but why would shorties not have short positions in some other meme stocks? Definitely not AMC ... but while GME might have diminishing return galore ... other companies might need and appreciate help.

Thought that the unbreakable tweet (https://twitter.com/TheRoaringKitty/status/1403083073047105539) might mean that we should look at the stocks that survived the dips that day. I have come to question that since then, because that tweet is more likely to mean that the investigators will be looking at GameStop and not understand how there are survivors of a train crash. Went through some of the stocks, though, and came across some things that might be nothing, but I will just leave them here:

ORPH was the huge story that day. The next day DFV posted that: https://twitter.com/TheRoaringKitty/status/1403140014414913539

If he was in ORPH, then yes, he actually lost a lot of money around that time but is not worried.

I also thought CLF, WWE and SENS did okay. Still would need to run them through the filter of how media covers those, but WWE currently stands at 120% held by institutions according to yahoo finance: World Wrestling Entertainment, (WWE) Valuation Measures & Financial Statistics

Somebody make a screenshot. And somebody wrinkle me that. Might be totally fine and a special situation with mergers or something, but I think it is ... weird.

Another thing I did was look at the 52 week statistics (last column below) to check how far meme stocks might be into the journey. I think that is what DFV means when he says / tweets "to be where I have been".

fwfdlce2ls471.png
Last Column: 52 week performance

Again, the interesting ones would still have to go through the "how are they covered by the MSM" filter. I personally like WWE so far. The MSM seems to develop a "peak-because-blah" narrative. On the other hand, it seems like an even stupider short play than GME considering the revenue increases and the that it is not in the dying retail space, though ... so I don't know and none of this is financial advice.

Really hope this makes it past the FUD police. I know how big of a deal such a pivot would be, but I feel like it this needs to be addressed and might provide another angle to analyze news. Hope some wrinkly apes will look into some of these points.
 
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Andreas Thiel

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They did it. Got completely destroyed over there ^^. Starting to think Youtube and Reddit are professionally leading lambs to the slaughter.

Went through the trouble and quoted the part in "Naked, Short and Greedy" for DDintoGME that really got to me. Might as well post this here.

This seems to be a play since at least 2005:
"By the time I met my first CMKM investor at the NASAA Public Forum in Washington DC in 2005, I was already coming up against a trait found very common among people who were in the fight against what they labeled "naked short selling" or NSS: they expected to get rich quick. Not rich in a hurry, or even rich on their investments. Someone had convinced them that the naked short sellers could be forced to cover the short sales, which meant those short sellers would all rush to market at the same time to buy shares to cover the settlement shortages. In doing so, they would drive up the prices of the shares. CMKM investors were unique for one particular reason ..."

Is anybody reading this? Noticed that CLOV is also beyond the 100% institutional ownership ... at least according to the Yahoo Finance statistics:

Does anybody know what to make of this?
 

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Guess the new tweets mostly support my theory.

He says we should not care about "how, where or why", just about "how much" room there is to run ( View: https://twitter.com/TheRoaringKitty/status/1404831172946018305
).
I think he is still throwing out Tweets that tell us to look into different stocks.

111, Inc. (YI) seems interesting ( View: https://twitter.com/TheRoaringKitty/status/1404812396108075008
). Crazy revenue growth, not much debt. Price seems suppressed.

Other mentions that I don't know how to feel about from View: https://twitter.com/TheRoaringKitty/status/1404468676493971458
:
  • JetBlue Airways Corporation
  • Apple
  • Carnival Corporation
 

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You may not look like a FUD shill, but you sure do smell like one, talk like one and act like one.

We got the message, Cassandra. Now please stop killing the vibez.

To da moooooon boyz. #AMC #GME LOOOOOL
 

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