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Shkreli on GME - 1/31
Gamestonk. Gamestop. GME. My thoughts are on Reddit, under my u/martinshkreli & subreddit martinshkreli. Those are authentic and discuss why GME is one of the most unprecedented events in market history. Here, I'm going to discuss the populist attitude that is creeping into this odd situation and add some thoughts on short-selling in general. Let's cover my own unique angle on the concept of a 'short squeeze'. Most would define it as an erratic upward change in price driven by short-covering. I believe short-squeezes defined this way are usually a fictitious idee fixe that aggregates a number of discrete market behaviors and dynamics into a convenient and pithy moniker. The image of python-like buyer constricting some hapless speculator into a higher stock price is evocative but misleading. Many knew me as a short-selling specialist on Wall Street, focused on 'binary events' of biotech stocks. I think I've seen it all: I was once short more than 75% of a company's shares outstanding (I do not recommend this). I bought 75% of a company on the open market, etc. Short-sellers are governed by the same market dynamics as longs. They get nervous when positions go against them and consider exiting. Like longs, they can double down if they wish. The only difference is that, of course, short positions grow when stocks rise. And they can rise infinitely, while long positions fall asymptotically to zero. But both get, theoretically and assuming no fundamental changes have occurred, more attractive as they move against the trader. Short sellers have to pay borrow fees to longs (typically tiny, but sometimes massive). They have to locate stock to short, again usually easy, but sometimes difficult. Both are perilous when those rare adverse times arise. Why? Despite the possibility of a growing cost of renting stock, the ultimate fear of a short-seller is a "buy-in". It is nightmarish and has only happened to me once or twice, excluding options-related activity. A buy-in occurs when a broker decides to forcibly exit the short position on behalf of the trader because the broker and trader cannot secure the 'locate' which is supposed to underlie the short sale. The buy-in order is typically violently disruptive: a market order for the whole position near the closing hours of the market! The SEC published a list of stocks at risk of buy-in: the fail to deliver list. My point is that a 'short squeeze' can only practically affect the trader for two reasons. The first is that the trader digs in, doubles down and doesn't exit as his position grows. That's bad trading, and will eventually blow the trader up. But, if the stock is a 'good short', that short will be replaced by more traders with stronger hands/a better entry price/smaller position. What's more is the average investor can't tell if this is happening! The second is the buy-in. I haven't heard GME shorts being bought in, but again, how would you know, other than the grapevine? My point is most of the disruptive, exciting trading here is simply long speculators banging away at the stock. New longs are sometimes attracted to rising prices, speculating they'll increase further: that's called momentum. Those buyers are typically offset by the existing longs who are excited to exit at higher prices. But, if there is a large short position in the stock, a speculator may feel that those covering (buying to get out) short-sellers will provide additional fuel to the momentum. That's sometimes the case, but higher prices should lead to more supply from both long and short sellers. My feeling is the actions of large long holders probably have more influence on the stock price than shorts who dart in and out, and typically in smaller size. Remember that shorts who capitulate are often just replaced by new shorts who are attracted at the new lunar prices. In essence, 'short squeezes' become a self-fulfilling prophecy as new long investors pile in trying to 'squeeze' this sometimes phantom of a short seller, and existing long investors may hold off selling for the same reason. With some Popperian skepticism you will easily see that the same dynamic can exist without the short boogeyman, or with a short boogeyman of any size. Speaking of which, where is Chanos and his slavish groupie, Carson Block? Speculative momentum can occur for any reason. Let's not forget that the 'trapping shorty' strategy is an awkward idea for a few reasons. Short sellers are often sophisticated market participants who are betting on the decline of a stock. You usually don't want these type of traders sniffing around your favorite longs: I recall writing a 'short report' on a stock to watch it fall 50% that day. If you do a study of stock returns of highly shorted stocks, they are pretty awful. The reason there is 'no arbitrage' is the borrow rate. But even if you got this poor short to capitulate and squeeze, the amount of buyers who are now holding stock at absurdly high prices put way more energy (and money) into the stock than the short seller's white towel ever could. A sledgehammer killed the fly: now what? Alternatively, are you the host or the parasite? On populism. I don't really think most investors or speculators should go into any investment thinking that there is 'an enemy'. Concentrated (big) investments (bets) give rise to emotional behavior, typically the enemy in trading and investing as it clouds rational thinking. It's a lot better to be Socratic with your 'opponent' and understand what they're thinking. If your position were to be half the size it currently is, would you be as emotionally interested? Try it! You'll lower your risk and feel better. Some of the behavior going on at WSB sounds more jihadist than speculative. The idea that there are some investors who are 'good' and others who are 'bad', or that there is an 'establishment' is BS. Everyone has the same goal: I have a pile of money, I'm trying to make it bigger, fuck your pile--I don't care about it. Anything other goal is contrived, foolish and won't help you win. You can't 'fight the rich' by trying to become one of them. Don't you see the irony? A related thought experiment: what if this trade continued to work really well? And another, and another? Then some WSBers are billionaires. Aren't they the new 'enemy/establishment?' Who do you think hedge fund managers are? They're typically the anti-establishment. Things have changed a bit, but the most successful HFMs are actually the WSBers of the past. These are guys who didn't fit in well at i-banks, often got kicked out for having big mouths or not wearing the right ties, or just wanting to wear jeans at work and not fill out TPS reports. When they started their firms, people like Soros, Icahn, Steinhardt, Robertson, Cohen, Griffin, Loeb (who has posted anonymously on boards), Samberg, even Cramer were fish out of water and had very tiny amounts of capital, often begging for investors. The need for an enemy. To sustain increasingly insane behavior, it isn't uncommon to use a straw man or a scapegoat. Oppressive regimes used this technique in the past, and the media uses it today. Retail investors don't have much power individually. With your $5k RH account, you can't day trade or even qualify for margin. It's pitiful. So, it's understandably quite exciting to finally feel like a 'player' that you read about. To be a part of 'something'. The problem is the media is goading you to be somewhere between a lemming and a life-agnostic but impotent jihadist. Blowing yourself up won't impress anyone, and there is no afterlife here, other than a minimum wage career and mom's sofa. GME and shorting in general is small potatos in the scheme of the Wall St. machine. Don't worry about getting 'even' with the rich. That's jousting at a windmill that will waste your energy. No one here, hopefully, wants to be a lemming. Those willing to 'die on this hill' have to realize something: Wall Street doesn't care about its speculators. The new traders who vanquish the old simply replace them. Nothing changes. When LTCM blew up, or Amaranth, Visium, Galleon, or anyone else, it is 'out with the old and in with the new'. So, perhaps WSB can blow up 1 hedge fund or maybe 5, but so what? Eventually, the tables will turn and it will blow up. The leveraged, fast-money trading markets are a violent place and the only people who care one whit are the brokers charging fees (directly or indirectly). They only care to make sure the sorry carcasses can pay their bills. They know there will always be another speculator lined up, ready to shove his money into the lotto machine. There is no pride here. There is no credit for being a good solider. You either survive or you don't. Your job is to survive and thrive. Becoming a lemming will guarantee failure as per the statistical truism of gambler's ruin (enjoy the proof in measure theory). With enough time, anyone playing a game with <50% success rate (equal payouts), will lose all their money. Get that number above 50%. Add the Kelly Criterion to your trading strategy. You might ask, "(that's all well and good OR we'll agree to disagree) but, Mr. Shrek, isn't this a good trading strategy? (ganging up on shorted stocks)?" As long as you're not a lemming/jihadist (willing to walk over the cliff, whether or not you have a "cause"), and you ignore a somewhat slimy ethical/market manipulation question, I don't see anything wrong with it. There are better ways to make money, since you're asking. Stoking (or worse, participating in) a buying frenzy that is akin to a forced musical chairs game is a little crazy. Once a stock is absurdly valued, you're just hoping the sell-off doesn't happen while you're holding it. If you have enough lemmings or jihadists 'helping you', that's a good thing. They will hold your bag--someone needs to. Of course, if you've found the "next" Microsoft or Apple, no one needs to hold any bags. But, no company can increase its objective (aka fair) value quickly enough for this... phenomenon? situation? absurdity?... to make it reasonable. Those things take years, go slow and steady, and this frenzied buying/"short squeeze" phenomenon won't let value play a factor. That's why WSB GME longs have shifted theses from "well, Gamestop was/is cheap" to "the gaming cycle" to "Ryan Cohen will save us" to "...jihad?!" Each member of the herd has its own financial parameters, too. Some may have $500, some $50,000,000 or more. Some may be willing to lose their entire stake (and even more) on an out-of-the-money or levered trade. Some are not. Some were in the latter and somehow end up in the former. Some are in one column at one price and another column at another--some are switched from column to column by force. Today's lemmings/jihadists are tomorrow's sellers. When you're hanging off the mountain, pay attention to the guy holding the rope. Loosely 'coordinated' buying can certainly affect stocks. Heavily shorted stocks and small cap stocks are the kind that require less capital than typical to 'move' a stock. The irony here is when putting on a position, the trader's goal is typically NOT to move the stock with his actions! I still think GME is wildly overvalued, but that doesn't exactly mean I'm 'bearish'. One funny idea here is reflexivity: GME stockholders may become serious GME customers and the company's fundamentals improve that way! Excluding some such miracle, eventually GME stock will trade at <50 again. I still think it will trade at 1,000 or more BEFORE that happens, and that the decline process will take a long, long time (several years). Keep in mind, anything can change. GME can do serial secondaries that destroy its stock. Management's job is to create value for their shareholders--but perhaps they will avoid pissing them off. There's a strange loop! Finally, the stock could be halted by the SEC or completely banned by brokers. Don't overdo it. Watch the borrow rate. Keep your positions at less than 25% of your capital--live to play another day. Disclosure: I've never traded GME stock and do not intend to. (From martin, posted by mo)
Source: https://www.bungie.net/en/News/Article/50006 This week at Bungie, we’re back in action. It’s been a while, hasn’t it? Since the last TWAB, you’ve gotten your hands on Hawkmoon. The Dawning has come and gone. Next-generation consoles received some wonderful enhancements. You’ve released a crow from their cage, and Lord Saladin watched as you decimated your foes with Stasis in the Iron Banner. On the Bungie side of things, we took a breather. This last year has been full of challenges that none of us expected. Even through everything 2020 had in store, we were able to get Beyond Light and Season of the Hunt in your hands. This did come at a bit of a cost, though, and we needed some time to recharge our batteries for a new year. We have no doubt that 2021 will have mountains to climb and unexpected surprises, but we’re all excited to get back into the groove for a new year of Destiny development. So, let’s get this party started. We’ve got four TWABs between you and a fresh Season of Destiny 2 content. You’re hungry for what we've got planned, and we’re eager to dish out the goods. First up, we’ll be looking at a few changes to vendors, Dreaming City and Moon rewards, and some sandbox tuning for Hunter Stasis abilities in the Crucible.
Rewards Update: Dreaming City and the Moon
Since the launch of Beyond Light, we’ve been collecting what feels like a metric ton of feedback on various Destiny systems. While we’ve shared some plans related to rewards, DDoS protection on consoles, crossplay and transmog, we have new details on rewards from two of our more recent destinations: The Moon and the Dreaming City. Rewards Area Lead Justin Dazet will be walking us through some changes in response to player feedback.
Justin: Last month, Assistant Game Director Joe Blackburn spoke about some changes we were making to gear in Season 13 in response to some feedback. Today we’re going to briefly chat about what some of these changes are as they relate to our back catalog of expansions, and the reasoning behind them. First let’s review a list of what you’ll see starting in Season 13:
Reissued Dreaming City Reverie Dawn and Moon Dreambane armor.
These will also drop with high stats when earned in Shattered Throne or Pit of Heresy.
The final chest in Pit of Heresy will no longer drop a fully Masterworked Dreambane armor piece.
Instead, the Dreambane armor piece that drops will have 7 armor energy and is guaranteed to drop with at least a +16 in two different stats and higher stats overall.
Dreambane class items will not drop from this chest.
Reissued 4 weapons for Dreaming City with new Perk Pools.
Waking Vigil, Sleepless, Vouchsafe, and Retold Tale.
Dreaming City weapons that drop in the Shattered Throne dungeon can roll with perks that are unavailable from drops from other reward sources.
Reissued 4 weapons for the Moon with new Perk Pools.
Premonition (Pit of Heresy only), Heretic, Blasphemer, and Apostate.
Weapons that drop in the Pit of Heresy dungeon can roll with perks that are unavailable from drops from other reward sources.
Expanding Lost Sector Legend and Master rotation to 4 Moon Sectors.
K1 Logistics, K1 Communication, K1 Crew Quarters, and K1 Revelation.
We are making these changes to help preserve the relevancy of the destinations, specifically some of the pinnacle end-game activities that still exist there. To get more specific around the actual experience, activities where re-issues are acquired will be heavily weighted towards rewarding re-issued gear over capped gear -- though the exact weighting and mechanisms may differ. For example: In the Dreaming City if you have already obtained an infusion capped weapon, it will not drop for you again. Image Link While not every gear source or Legendary reward will be kept up to date for the entire lifetime these destinations are available, we do believe there’s high value in targeting some specific activity drops for continued relevancy to give you more options for where to spend time as you seek to improve your arsenal.
Turn in those Tokens
Since Destiny 2 launched, Guardians have been amassing vendor reputation tokens. These could be turned in for Legendary gear, which would usually be dismantled for Legendary Shards and materials. Looking to the future, the team is excited to update the ways in which you earn reputation with ritual vendors and the rewards that come from them. Dazet, back to you!
Justin: The rewards for continuous ritual playlist completion has been a subject that’s come up several times as we’ve looked over Beyond Light feedback, and we’re happy to announce some changes coming soon to Gambit, Crucible, and strike reward structure. Firstly, we’ll be adding two new unique weapon rewards to each of the three playlist rituals (so six total across all three activities). These weapons are in addition to the ones added in Season of the Hunt, and continue to have a small chance to drop at the end of each activity. Second, starting in Season 13 for Gambit and Crucible (Valor) and in a future Season for strikes, rank rewards will be visible on the ritual vendors. Each Season you’ll be greeted by a row of rewards, progression toward which will be earned automatically as you complete relevant playlist activities. Instead of having rank rewards dropped automatically into your loot stream, they now will be picked up manually from the vendor lists. We feel this gives much better visibility into what you’ll be earning as you progress, and helps you make better choices about where to spend your time. Image Linkimgur Progression is on a per-ritual basis. You can be on Rank 10 for Crucible and Rank 4 for Gambit, for example. You’ll reset your rank right at the vendor by picking up the final reward. Rewards for each individual ritual are as follows:
Rank 4: 3x Upgrade Modules
Rank 7: 3x Enhancement Cores
Rank 10: Seasonal Ritual Shader (changes to 3x Enhancement Cores after resetting your rank)
Rank 13: 2x Enhancement Prisms
Rank 16: Seasonal Ritual Emblem (changes to 2x Enhancement Prisms after resetting your rank)
Reset Reward: Ascendant Shard (changes to Exotic Engram after resetting your rank)
Every rank-up awards a base Ritual Engram just like before. Additionally, each of the above ranks also awards a Prime Ritual Engram. Image Linkimgur Due to this automated progression, Crucible Tokens and Crucible Token Gifts are no longer needed and will be deprecated into junk that will delete as a full stack starting in Season 13. So, cash those tokens in before the end of the Season, and get ready to earn some Masterwork materials!
Taking a pass: Revenant Shatterdive & Fissures
The conversation and feedback on rewards wasn’t the only thing we were tracking over the holiday break. Many of you have been spending time in the Crucible, experimenting with Stasis and all of the ways in which it can change the flow of a PvP match. Prior to the break, we had a round of tuning for Warlocks. Next up, we’re looking at Hunters, but also have some comments on our approach to future Stasis tuning as we head in to the new year. Please welcome Combat Area Lead Tomonori Kinoshita back to the TWAB to talk through our goals for Stasis abilities in PvP.
Tomo: Over the holiday break we saw Trials go live, and with that a wealth of valuable feedback from the community. Along with this feedback, we have been tracking data from Trials and identified some short-term changes, as well as more mid-term goals we are focusing on in the coming weeks and months. Short term goal: Address outlier Stasis abilities to keep subclass decision making interesting.
Reduce the potency of Shatter Dive + Whisper of Fissures against Guardians, going live with Update 3.0.2.
Shatterdive
Now has damage falloff vs. unfrozen targets
Max range damage reduced from 50 to 5
Damage reduction during ability reduced from 50% to 25%
Whisper of Fissures
Reduced max-min damage vs. non-super players from 42-22 to 30-4
Reduced max-min damage vs. super players from 42-22 to 16-2
Reduced detonation radius vs. players from 10m to 9m
Investigate the efficacy of the Stasis Titan Behemoth Super. We want to let the above change settle to see where the Behemoth stands in our PvP hierarchy, but this is next on our radar.
Mid-term goal: Improve PvP subclass usage and win-rate balance.
Addressing Stasis ability outliers will help us lower the ceiling, but we also want to pull up other underperforming Light subclasses.
Mid-term goal: Review our ability-to-gunplay balance in PvP.
Destiny is a game about both explosive space magic moments and intrinsically satisfying gunplay. Especially in our 3v3 playlists, the usage of abilities has climbed as we introduce more and more ways to charge them quickly.
We’re still in very early discussions, but we’re looking into restoring a better balance where proper gunplay is rewarding in these playlists.
A few of you noticed that prior to our holiday break, we were able to get a few sandbox changes delivered faster than expected. Thanks to changes on Destiny 2’s backend and the Destiny Content Vault, our patch pipeline is indeed better than before! That said, some changes won't happen at light speed, as our team wants the appropriate time to collect feedback, check the data, and test proposed changes. Once these changes have been validated, we’ll be eager to get you details via TWABs, blog articles, and more.
Worldwide Community
Sometimes, it can be difficult to think of how large the Destiny community has become since 2014. It seems no matter where you may be in the world, you might bump in to a fellow Hunter, Warlock, or Titan. Last year, we bolstered our efforts with the addition of two international community managers. Join us in welcoming a third to the team! Introducing our new Russian Community Manager, Ivan Yanyushkin.
Ivan: Privet! My name is Ivan and I'm the latest community manager added to the team for Russian speaking Guardians. In Destiny 2 I enjoy making raids more complicated by doing them with fewer than six people and endlessly roaming around Europa on my Warlock, which for me is a meditating experience. Some of you might know me from my past work at Blizzard Entertainment, where I worked as a community manager for different titles. This experience will help me, but I will also be thankful for your guidance. Feel free to reach out to tell me what works, what doesn’t, and how things can be improved for the Destiny community. One day, when real-life gaming events finally become possible again, I will be happy to meet you in person. But for now, let’s stay in touch on Twitter, VKontakte, and on the Russian Bungie Forums. It’s an honor to work with such an amazing community. My job will be to pass the voice of the players to developers, help local content makers grow, manage Russian social media channels, and take care of many other duties. I’ll do my best to be Ivan the Great not the Terrible! P.S. Hopefully one day I’ll even get used to the fact that Hydras explode after death :) Spasibo.
Keeping You Updated
Image Linkimgur Through the holiday break, Destiny Player Support was at the ready, providing vital information to players encountering bugs, seeking workarounds, or just asking for help with their network setup. This week, their eyes turn towards an upcoming Hotfix, preparing you all for the incoming update. This is their report. UPDATE 3.0.2 Today, January 14, background maintenance for Update 3.0.2 will begin. Below is a timeline of events:
January 14, 10 AM PST (1800 UTC): Destiny 2 background maintenance for Update 3.0.2 begins.
January 14, 2 PM PST (2200 UTC): Destiny 2 background maintenance for Update 3.0.2 completes.
January 19, 8 AM PST (1600 UTC): Destiny 2 maintenance for Update 3.0.2 begins.
January 19, 8:30 AM PST (1630 UTC): Players are removed from activities and won't be able to log back into Destiny 2 until 9 AM PST when Update 3.0.2 is available.
January 19, 9 AM PST (1700 UTC): Destiny 2 Update 3.0.2 is rolled out across all platforms and regions. Players can log back into Destiny 2 at this time. Ongoing maintenance is expected to conclude at 10 AM PST.
January 19, 10 AM PST (1800 UTC): Destiny 2 maintenance is expected to conclude.
UPCOMING RESOLVED ISSUES Below is a list of some issues expected to be resolved with Update 3.0.2:
Hive bosses, In Ananh, Brood Queen and Xillox, were not counting as Hive boss kills in bounties.
Some players couldn't respawn if they died during the boss fight of the Inverted Spire strike.
Players could get out of environment in several Crucible maps.
Some quest items were not dropping in the Moon Freeroam activity. This prevented completion of several "Essence" quests, such as Essence of Rage, Essence of Insanity, and Essence of Servitude.
The Unrelenting perk was not triggering health regeneration.
MIDA Multi-Tool's catalyst wasn't dropping from Competitive Crucible wins.
Taken Psions were replicating too rapidly in some Prophecy dungeon encounters.
Garden of Salvation flawless completions were not awarding the “Inherent Perfection” Triumph.
The High Celebrant sometimes wouldn’t take damage nor go to the Ascendant Plane.
Fixed an exploit where players could have "Shelter From the Storm" permanently applied in the Deep Stone Crypt raid.
Fixed an issue where Cloudstrike hits on the Divinity cage counted as two precision hits.
Fixed an issue where the Grandmaster Nightfall timer was set to 30 minutes.
Fixed an issue on PlayStation 5 preventing clan rosters from loading.
DUST AND ECHOES Almost nine years ago, stats and files from our previous franchise, Halo, stopped getting updated on Bungie.net. Since then, all stats, files, and other data from Halo 2, Halo 3, Halo 3: ODST, and Halo: Reach have lived on in remembrance at halo.bungie.net. On February 9, the halo.bungie.net website will be taken offline permanently. Everyone is welcome to save their stats and files, however they can, if they'd like to save anything. Please keep in mind that our News articles, Forums, and Groups were imported into the current version of Bungie.net back in 2013. KNOWN ISSUES While we continue investigating various known issues, here is a list of the latest issues that were reported to us in our #Help Forum:
The Exotic Ship Reward from the High Celebrant mission is not properly showing that it is a “Rare” chance reward in the activity description. Chances for this reward increase with each activity completion.
Portals aren't opening when the High Celebrant leaves because the black orbs take no damage. Players can mitigate this issue by not using Sidearms and not shooting the orb as it immediately spawns.
Enemies in Crucible and PvE aren't colorblind-friendly when highlighted.
The Special Finisher mod no longer unlocks for new players.
Bomber mods don't work when Hunters have the Dragon's Shadow Exotic equipped.
The Overload Shot on Auto Rifles doesn’t proc if you hold down the trigger right after reloading, even though it does the Overload animation.
Some players receive the BIRD error code trying to get to the Wall of Wishes in the Last Wish raid.
Sometimes the Vault encounter in the Last Wish raid won't let you read icons nor spawn enemies after slamming on a plate or finishing a phase.
Sometimes Riven doesn't get stunned on the second level in the final encounter of the Last Wish raid.
The Forfeit Shrine Ascendant Challenge completion doesn't count towards the Ascendant Champion or Honed for Speed Triumphs, blocking the Cursebreaker Seal.
The Run the Gauntlet Triumph doesn't unlock when completing the time trial in the Cimmerian Garrison Ascendant Challenge.
Ahamkara Bones are missing in the Shattered Throne dungeon and multiple Ascendant Challenges.
Players will sometimes go into a Nightfall with 16 people when they try loading into the Tower.
Sometimes dialogue gets cut off at the end of a Wrathborn Hunt.
For Hunters using the Way of the Warrior subclass, Combination Blow sometimes stops working and doesn't give Gambler's Dodge back.
Non-Exo characters are receiving Exo specific dialogue on Europa.
The Light of the Dawning emblem cannot equip stat trackers.
The Coaxial Bonds ornaments for Ophidian Aspect causing the bottom-left of the screen to glitch/flicker.
For a full list of emergent issues in Destiny 2, players can review our Known Issues article. Players who observe other issues should report them to our #Help forum.
Home Streaming Device
Image Linkimgur It’s been a little over nine months since I’ve been to a theater. While I definitely miss the smell of fresh(ish) popcorn and mind-blowing visuals on a massive screen, I’ve been keeping myself busy with Destiny clips, montages, and videos from our amazing community. Let’s see what we’ve got this week: Movie of the Week: Confectionary Ghost Video Link Movie of the Week: Deep Stone Lullaby Cover Video Link Movie of the Week: Goodbye 2020 – A year of Crucible Video Link Movie of the Week: Cloudstruck
Make sure to put a link to your Bungie.net profile in the description of your video. Why? We have a sweet emblem to grant you for your troubles. As always, upload your finished product to the Creations page.
Doodling
Image Linkimgur Since we’ve kicked off the weekly artist features, I’ve found myself doodling more often. Thinking of what my Guardian would look like in the heat of battle, or just chilling on a couch after getting some sweet loot. Thank you to all who continue to inspire members of the community to embrace art! Let’s kick off the year with some fun pieces. Art of the Week: Rogue Hunter
If you’d like to be featured, make sure to tag your art with #Destiny2Art on Twitter, Instagram, or wherever you happen to post it! While we may not be in the office, it feels great to be back in the saddle. Always enjoy diving through feedback, discussing the future of Destiny with the team, and figuring out how to tackle the challenges of a new year. Cheers to all who’ve walked this path with us since 2014. It’s always crazy to think how far we’ve come, and we still have so far yet to go. See you in the wild. Cheers, dmg04
Feb/4/2021: (1) Armenia will grow weed (2) Colonel charged w/bribery & tampering w/draft during war (3) Education reform: grading, curriculum, preschool (4) Bill: treason, disability ranking, media (5) Diplomacy (6) Rumors & rebuttals (7) Cancer stats & free treatment (8) $750M bond (9) in-out stats
Your 14-minute Thursday report in 3497 words. Part 1.
anti-corruption: Defense Ministry official busted with bribery & tampering with draft during war
NSS report says: a Colonel, who had oversight over subdivisions, received a ֏975K bribe from a conscript to transfer him to another location on Sep-13-2020. Part of the bribe was transferred to his online gambling account. When the war began, a draft was declared and recruits began training at a location in Armenia. The Colonel took a ֏1.2M bribe from a soldier in exchange for not sending him to the front lines. During the winter draft, the Colonel took a ֏5.2M bribe from another conscript and used his connections to send him to the desired service location. A similar ֏1M bribe was requested on January 6th from another recruit. The Colonel took another ֏1.4M bribe to help promote a conscript and allow him to work at a hospital instead of regular service. On October 22nd, during the war, the Colonel decided to help a friend move from bordering Khndzoresk (Syunik) hospital back to Yerevan. As a result, the clinic became understaffed and couldn't fulfill its duties. Moreover, the Colonel then helped the same friend not to be deployed on Syunik borders as a soldier and instead to handle tasks in the rear, on October 26th, in exchange for a ֏300K bribe. On October 13th, during the war, the Colonel and his accomplices wanted to help a soldier to leave Artsakh. When they learned that the latter was already on the "deserted" list, they took steps to remove him from the list. Then, he learned that his friends' sons received a draft notice, and use his connections to remove them from the draft list. After the war, on Dec-13, a friend asked the Colonel to make sure that his son, who was serving in Lusakert, wasn't sent to the front lines. The Colonel contacted the Lusakert facility but learned that the soldier was not among those who were supposed to be sent to the front lines. Nonetheless, the Colonel decided to defraud his friend by claiming that "he took care of it", and received a ֏200K bribe. The colonel and over a dozen others were arrested. Illegal weapons were found under their possession. The investigation continues to expose other possible suspects. https://youtu.be/ifo13WJLpsU https://armenpress.am/arm/news/1042334.html
bill: harsher punishment for treason, spying, espionage
BHK MPs drafted a bill to increase punishment for traitors, spies, passing of state secrets. They want to raise the maximum punishment from 15 years to 20-life. The authors explained the move by citing many media reports about alleged "treason" incidents. The bill was discussed at a relevant Parliamentary committee. The chairman QP MP Vladimir said he supports life imprisonment as the minimum punishment. However, during the discussion, they agreed to settle on 15-20 years plus property confiscation, or a life sentence. The committee found the espionage punishment too harsh and asked the bill author to reduce it from 15 to 12 years. The BHK author agreed. The bill was approved unanimously and will be debated/voted on the Parliament floor later. https://armenpress.am/arm/news/1042354.html
Jalal is back with another position
The wounded ex-Artsakh army commander Jalal Harutyunyan will serve as the Republic of Armenia's Defense Ministry's Head of the Military Control Service. He will replace General Movses Mosi Hakobyan who quit on November 18th. https://armenpress.am/arm/news/1042353.html
Russian-Turkish ceasefire monitoring group begins operations
ECHR received Armenia's complaint against Azerbaijan regarding 228 POWs / Azeris counter-claim for 13 POWs
Armenian families submitted a petition to ECHR to require Azerbaijan to provide information regarding 228 individuals. Azeris want to know data about 13 people. (From the language it is unclear to me whether the petition is for confirmed POWs, or it also includes families of missing soldiers who want to know whether their relatives are POWs. Likely the former.) https://armenpress.am/arm/news/1042406.html
Russia removed tomato import ban on 13 Armenian firms
Russian regulator will allow 13 Armenian sellers to export tomato and pepper to Russia again after earlier finding a food virus in them. A similar ban was implemented against Azeri tomatoes. https://armenpress.am/arm/news/1042433.html
US Congressman demands an explanation from the US ambassador to Azerbaijan over "congratulatory" statement
Rep. Bred Sherman wants to know why the US ambassador to Azerbaijan Lee Litzenberger congratulated Azerbaijan's Economy Minister with "de-occupying territories and US's willingness to aid Azerbaijan with rebuilding those territories". He reminded the US officials that the US is a member of the Minsk Group and should take steps to ensure Artsakh's safety and prevention of a new war. Bred Sherman praised Biden's appointee Anthony Blinken for stating that the US will review its military assistance to Azerbaijan after the latest war in Artsakh. Artsakh MFA yesterday released a statement urging countries, officials, and organizations to refrain from such "congratulatory" statements. https://armenpress.am/arm/news/1042370.html
de-occupy Hadrut NGO
... aims to help 13,500 Hadrut residents who lost their homes during the war. It was founded during the war by activists who held protests in front of various embassies. In the early days, they received aid from President Sarkissian's office. The latter gave shelter to 25 families. Today the NGO aims to help refugees with employment, while simultaneously lobbying for Minsk Group to de-occupy Hadrut so residents can return. "I hope that one day our NGO will shut down because Hadrut is no longer occupied," said co-founder Meri Davtyan. https://armenpress.am/arm/news/1042286.html
govt session: financial aid for Syunik border villagers
The government approved a new aid package for residents of Syunik's Shurnukh and Vorotan villagers. Those who lost their homes will qualify for the same aid package as Artsakh refugees: one-time ֏300K payment plus monthly ֏65K payments for 6 months. There is another pending aid package to build new houses for them. Context: Two dozen houses in Vorotan and Shurnukh went under Azeri control because they were built on the Azeri side of the internationally-recognized borders. https://armenpress.am/arm/news/1042362.html
bill: disability ranking to be replaced with degrees of functionality impairment
The government approved a bill, yet to be approved by Parliament, to reform the disability system. The disability assessment process will analyze the person's level of functional impairment while taking into account surrounding conditions. "Today, the system is run under a 1993 law that does not do a comprehensive assessment of the surrounding environment, person's ability to function in public life," says the govt. The draft bill will repeal the 1-3 Categories and Disabled Child category. A person's functionality impairment degrees will be light, medium, heavy, or deep. Disability will no longer be considered a permanent health problem. The assessment will be based not only on the factor of health problems but also on the environmental factors of the person's activity and participation in public life. Healthcare and Social Ministries, NGOs, the UN, and the EU worked together to create and test an assessment methodology. https://armenpress.am/arm/news/1042365.html Tags: #DisabilityLaw #disabled
bill: require unknown Telegram/Facebook media channel owners identified before "linking" by mass media
QP MPs want to require social media channel operators identified before a "mainstream media" can link to them. It doesn't restrict citing "anonymous sources", however. It also requires outlets to disclose sources of revenues for transparency. Read yesterday's news for context and arguments in favor or against it.. The debate continued today. QP MP Arthur: For example, a legitimate news organization with an editorial staff of 30 people generates information, holds interviews, etc., while a Telegram channel that we do not know where it is managed from and by whom, begins to disseminate sensationalized information and over time becomes more "legitimate" than real media outlets because media outlets "advertised" them. This is also a national security risk because it is very possible that such sources are being operated by an adversary country to spread instability and an atmosphere of fear in the country. // The co-author criticized the critics who "claimed that the bill intends to ban anonymous sources. That's not true. This also won't affect the protection of journalists' source secrecy." https://armenpress.am/arm/news/1042357.html If you're interested in more debates: https://youtu.be/MTHwRa4YjgY , https://youtu.be/ThDNVwZYEp8 , https://youtu.be/S6C_NocS9N0 , https://youtu.be/3_-i2Z23ubI , https://youtu.be/wiPnmfeLNJ8 Tags: #MediaLaw #TelegramLaw #FreeSpeech
rumors and rebuttals: Artsakh army isn't being dissolved
Serj's won-in-law Mishik earlier circulated rumors that were denied by state officials. Today, Kocharyan-ally Vitali Balasanyan, who serves as Artsakh's Security Council chief, confirmed that the army isn't "disintegrating." After the restructuring process, there will be subdivisions with professional contractors, he said. https://armenpress.am/arm/news/1042344.html
rumors and rebuttals: Azeri flag won't fly over Artsakh govt buildings
rumors and rebuttals: Azeri families won't resettle in Stenapakert / none are shopping in market
Vitalik Balasanyan said there are false rumors about two districts in Stepanakert being populated by Azeris, and Azeris allegedly freely shopping in Stepanakert market. "Dear citizens of Artsakh, on behalf of the authorities of the Artsakh Republic, I assure you that despite the irreparable losses inflicted on us as a result of the war, the state is always committed to fulfilling its responsibilities to ensure the security and normal life of the population. Accordingly, I urge you not to pay attention to the false news. Everything is being done to create and expand the necessary conditions for a dignified life of the people of Artsakh." https://armenpress.am/arm/news/1042344.html
rumors and rebuttals: Artsakh envoy won't stop operating in Russia
The Permanent Representation of the Artsakh Republic in Russia will not be terminated, said the Artsakh govt in response to rumors. https://armenpress.am/arm/news/1042367.html
rumors and rebuttals: no single currency in EAEU trade bloc
There is a district called Hollywood in Yerevan, Armenia. Gamblers were caught running an underground casino in there. This is the second such bust in the past few months. The police say ֏5.5B in damages was done to the state. https://youtu.be/sp0Sb--e_ms?t=60 https://factor.am/335320.html
anti-corruption: prosecutors charge education officials with ֏1.2B auction shenanigans
Prosecutors said: State Oversight Committee (SOC) audited the "National Center for Educational Technology" government-affiliated agency's finances between 2013-2020. Every year, the agency submitted a report on the work done by them towards servicing the education system. The bill was ֏700M annually. It was revealed that between 2012-2015, they granted an auction-based contract to the same company. It received a combined ֏2.8B in funding. The law requires the auction-holding officials to examine the market and take other steps before the auction. They failed to do so. Later, during 2017-2019, the same company was selected to do the job, but this time it was only paid ֏300-400M annually, far lower than during the previous years. ֏1.2B in damages was done to the state. A felony case is launched. https://armenpress.am/arm/news/1042389.html
re: Armenia's $750M eurobond sale / lowest % in history / $3B demand by investors / economy news
Read yesterday's news for context. Pashinyan: The issuance of $750M eurobonds is a strong positive signal for the start of the economic year. The issuance was done under the most favorable conditions in the history of our republic, with the lowest 3.8% percentage rate. Our previous record was in 2019 at 4.2%. The demand was for $3B but we decided to issue only $0.750B. First, it provides a guarantee of macroeconomic stability. Second, this is the first serious signal of overcoming the post-war economic shock, which shows that international investors have confidence in the economic future of Armenia and the policy pursued by the government. // Economy Minister Janjughazyan: this was part of our long-term plan and we had planned to do it while drafting the 2021 budget. We planned to issue fewer bonds but decided to add $250M because of favorable terms. We plan to use that extra cash towards the stabilization deposit, as a safety pad, to be used throughout the year if necessary. As long as our budget has a deficit we will have to borrow. But this is only part of the story; the country's overall debt burden is calculated based on various indicators. So far Armenia has been rated as a country with a lower debt burden. https://armenpress.am/arm/news/1042351.html, https://armenpress.am/arm/news/1042352.html , https://armenpress.am/arm/news/1042363.html , https://armenpress.am/arm/news/1042393.html
how many people did leave and arrive after reopening air traffic with Russia?
The governments of Armenia and Russian worked on an "app" to allow mutual travel after taking a test. By February 15th, there will be 4-route flights in 2 directions. There were several flights in the past few days. 3900 left and 3400 arrived. 1423 Armenian citizens left and 1263 Armenian citizens arrived. "More people were willing to leave in December than today," noted Diaspora Committee chief Sinanyan. "Some people flew to Russia but had to return due to a problem. This wasn't due to the COVID app implemented by us. Preliminary data shows that they went to Russia with a paper QP code which raised the suspicion of Russian authorities. We will work with them to resolve this," said Deputy PM Mher. (say what??) "We need to better inform the public about the existence of this app. Restoring routine flights will help the tourism industry," said PM Pashinyan. https://armenpress.am/arm/news/1042358.html , https://armenpress.am/arm/news/1042383.html
Pashinyan about the suspended Amulsar gold mining project
He repeated his earlier position that "Decisions must be made that take into account Armenia's best interests." "The mining industry plays a very important role in the development of Armenia's economy, including in the security context." "We must make decisions to make investment programs acceptable for the Armenian public while taking into account interests of Republic of Armenia." https://armenpress.am/arm/news/1042368.html
COVID stats
1829 tested. 147 infected. 352 healed. 11 deaths. 4637 active. "We're negotiating for vaccines via COVAX global initiative. Separately, we're negotiating with Russia for Sputnik-V. Vaccines should be available in March. It will be targeted at specific groups. It won't be mandatory," said Healthcare Minister Avanesyan. https://armenpress.am/arm/news/1042341.html , https://youtu.be/vXz3pHx1BlM?t=92
the consumer market price increase in the past 12 months
Armenia's consumer market inflation was +4.5% from January to January. Food +6.4%. Alcohol & tobacco +10.8%. Clothing +2.6%. Utilities +0.6%. Appliances +5.8%. Healthcare +5.6%. Transport +5.7%. Telecom +0.5%. Leisure & culture -0.8%. Education +2%. Dining +1.6%. Misc +3.5%. https://armenpress.am/arm/news/1042323.html
Parliament MP stops a citizen's suicide attempt
Someone tried to jump from Kievyan bridge. QP MP Gor Gevorgyan was nearby and stopped the attempt. The police took the distressed person to a station. https://armenpress.am/arm/news/1042329.html
psychological support will be provided to war participants and the public
Emergency Ministry says 15-30% of people have PTSD after the war. Today the government approved a plan to provide psychological aid to war participants and others. The target group includes families of missing people, POWs and their families, those who received disabilities, families of those who died, those who fought in the war, IDPs, civilians who were affected in any way. The program will work in Armenia and Artsakh. The government will purchase services from experienced mental health service agencies. https://armenpress.am/arm/news/1042403.html
Armenia will grow industrial marijuana on mass industrial scale / incentive to boost land utilization
Hemp is a type of weed that contains less of the substance that makes you feel high. The government wants to grow industrial hemp on a mass scale to boost mood land utilization and revenues. Pashinyan: this is going to open room for many speculations. It's important to present the project in detail so the public will have a full understanding of what is being done. Unfortunately, "hemp" is interpreted as something else, while in reality, it is a very important industrial raw material. The growing process has risks but there are oversight mechanisms that have been tested in many countries. Deputy PM Avinyan: the US, Russia, and China have a great experience with industrial hemp production. The practice was examined by the Economy Ministry. We're talking about industrial production only. It will significantly activate agricultural land utilization. Today, 40% of lands are gone unused. This is part of our plan to boost the production of high-value agricultural products. https://youtu.be/ssZgr2DR3DM?t=7 https://www.healthline.com/health/hemp-vs-marijuana#marijuana https://armenpress.am/arm/news/1042372.html
Education Minister says the "controversial" parts of Church/History merger were "resolved"
Education Ministry wants to merge the school subjects "Armenian Church History" and "Armenian History". Critics said it will shrink the church-related materials too much, others called it treason, while others supported the decision, stating that it's all part of our history and having a separate class is inefficient. Education Minister Dumanyan says he met colleagues at the National Academy of Sciences and they resolved the conflicts "that caused a noise earlier." He will reveal details soon. https://armenpress.am/arm/news/1042379.html , https://youtu.be/V0sC3dx-gzU
Major education reforms: "education alone will not solve all problems, but there is no problem that can be solved without an education"
... said PM Pashinyan during a govt session while discussing education reforms. Kids in 1-5 grades will no longer receive grades; tt will be pass or no pass (still needs Parliamentary approval). "There will be a criticism. How can you not grade? But this is a comprehensive program that emphasizes the student's needs and preferences," said Pashinyan. "We need to pay attention to how the time is spent in schools and what skills are being taught in school hours. It will reflect in our society 15-20 years later. It will define whether we have a technological product or not. What we were doing in 12 years (school length) can be done within 9 years, but a 9-year school isn't the solution. Instead of shortening the school, we're trying to fill the gap in a way to have a 50% higher efficiency by the end of the 12th year. In developed countries, education starts not from school but from preschool. The lower the education entry age the more developed the countries are," said Pashinyan. (the govt has a plan to make sure 70% of kids attend preschools by 2023) https://armenpress.am/arm/news/1042394.html
cancer stats in Armenia / annual rate / drops among children / fewer abandon treatment
world 9.6 million people die from cancer annually. 1/3rd is possible to prevent. Another part can be cured with the help of early detection. Armenia Cancer was the 2nd leading cause of death in 2020. It has increased in the past 10 years but at a small rate. Lung cancer is more common among men, and breast cancer among women. First time diagnosis by year: 2018 - 8762, 2019 - 7908, 2020 - 7050. Deaths by year: 2018 - 5199, 2019 - 5434. 2020 - unavailable. (55% men, 45% women) The cancer rate went up by 1.5x compared to 1990. However, it declined by 2x among children under 14yo. Fewer people abandon treatment. 3 years ago 53% of lung patients did so, today it's 40%. Breast cancer treatment abandonment went from 47% to 22%. (I translated the word բարձիթողության as "abandonment". Correct me if it refers to something else.) Artsakh The number of cancer cases has decreased in Artsakh: from 345 to 260 YoY. prevention Oncologist Safaryan says the early detection helps to avoid complications and save lives, even if it's the type of cancer that is known to reappear. There are many patients who defeat cancer. "Smokers should get a lung x-ray twice a year. Those working in chemical plants should get a frequent screening. Do not ignore symptoms and չգցել ականջի հետև. You can defeat it more easily when it's at 1-2 stages. It's a lot harder when it advances to 4." Preventing cancer isn't easy. The causes of this disease are many. Genetics, bad habits, obesity, surrounding environment. A genetic test can reveal the likelihood of suffering from illness. Some women choose to undergo a mastectomy to prevent possible breast cancer in the future. "I decided that if 1-in-100 is destined to be cured, I will be that one," said Ashkhen, a woman who recently defeated cancer. More: https://armenpress.am/arm/news/1042291.html , https://armenpress.am/arm/news/1042364.html , https://armenpress.am/arm/news/1042405.html
cancer diagnosis, surgery, and radiotherapy are free
The treatment was made free recently. The Oncology Center urges the public to get screened as part of an early-detection initiative. The pilot program began in Vanadzor; 307 women were screened. Cancer diagnosis, surgery, and radiotherapy are free, while the medication has a co-payment. https://armenpress.am/arm/news/1042423.html
Artsakh president Arayik met donor Alec Baghdasaryan and thanked him. "Only with the joint efforts of the Armenian people is it possible to quickly overcome the difficulties and to plan development programs." Alec plans more charity programs relating to education. https://armenpress.am/arm/news/1042326.html
A break down of the bull case for Ethereum and how it relates to Bitcoin
There is a general understanding among ETH investors that the enhancements from ETH 2.0, EIP-1559 and L2 solutions will result in a sustainable monetary policy with near 0% issuance and the potential for Ether to become a deflationary asset. What is even more interesting is that the net return of ETH as a SoV becomes superior to BTC the moment that issuance is lower than the staking yield. In other words, even if BTC had already ceased issuance, it offers no mechanism to provide yield to long term holders with a negligible risk exposure as ETH does. There is an execution risk that Ethereum will not deliver on what is currently planned, but if it does then what I have explained will become a reality. You cannot separate BTC/ETH's payment rails from their respective monetary policies. As you are probably aware, issuance is just a subsidy, and without it the network will need to operate as a profitable business with a cash-flow that is entirely dependent on network fees. We are observing a situation that is causing a degradation of the utility of the Bitcoin network. What I mean by that is that the incentive for users to transact directly on the network is being diminished because of the tokenization into ETH and by the introduction of custodians (like Paypal) and traditional banking services who will soon be entering this space. If these trends continue, I suspect that the only activity that will end-up happening on-chain will be done by whales sporadically transacting to hodle and the occasional settlement from institutions. Bitcoin seems fast and frictionless, but that is because you are comparing it to something in the physical world. In digital terms Bitcoin emulates the friction of operation that is found with gold: it is difficult and expensive to move it, securing it yourself is not trivial, and it does not make for a great medium of exchange. I don't think this will be a good dynamic to generate enough transaction fees. That is of course my subjective interpretation of it, but regarding this particular situation it is nearly impossible to make objective assertions at this point. It is possible to assert that, in the digital world, the expectation of frictionless money would entail near instant transactions with negligible cost and without the relative risk/paranoia of dealing with nuclear waste and having a hacker watching your every move waiting for you to make a mistake to snatch it away. Digital money would also need to interact with other digital assets, preferably defined and operated within the same ecosystem. Ethereum is steaming ahead on all ends. Ethereum is fostering a digital economy (this is a very important part of understanding the value of Ethereum, but I will not be exploring it in this post) with DeFi at its center. It is currently generating about three times as much trx fee revenue as Bitcoin. L2 solutions are going live as we speak, and it appears that they will be much more practical and provide better UX when compared to the Lightning Network. This will help to amplify L1 block space value and push revenue even higher. That will be followed by EIP-1559, which will burn transaction fees. Mining is currently excessively profitable and the hash rate cannot keep up. This means the financial incentive can be reduced and by burning trx fees we achieve the equivalent of an issuance reduction, while stabilizing mining revenue. Eventually the transition to PoS will dramatically cut the operational cost of the network. That means that Ethereum as a business will become more profitable and less reliant on the issuance subsidy. Finally, we will see the introduction of sharding which will scale L1 by up to 1,000 times, compounding the effect of L2 solutions and making it feasible for the network to operate as a platform for new use cases. A solution to the hackenuclear waste security situation is being explored via social recovery wallets. It is still in the early stages of research and design, but it is important to realize that the Ethereum community recognizes it as a problem and is working on a solution. There is a lot more that can be said about the BTC vs ETH debate and I am working on a full write up that explores each individual element in more detail. Regardless, it is important to pay attention to this trend: the smartest people in this space are shifting their point of view and realizing Ethereum's potential. Raoul Pal is a seasoned investor, extremely bright and open minded. He started with Bitcoin, but it did not take him long to understand the value proposition of Ethereum. Lyn Alden is a brilliant investor and mental powerhouse who initially did not think investing in Ethereum could be justified, but she is also starting to shift her view and now understands that it has a justifiable risk/reward ratio to be included in a portfolio (although she is not personally invested in Ethereum). She has plenty of negative things to say about it, however it appears that she recognizes this is not a black and white situation. I have a feeling she will be revising her analysis on Ethereum again in the future with a more optimist view, but maybe that is just wishful thinking. The crypto space has a few analogies that have been used to describe technical/economic mechanisms that are somewhat tricky to understand: mining, Ethereum's gas, and the analogy between ether and oil. Crypto "mining" is not like real world mining. It's purpose is not to extract resources, but it is rather a decentralized mechanism to process transactions. Newly minted BTC tokens are not "mined", they are minted by the protocol and awarded to operators. Furthermore, it is impossible to change the total mining output of the network... adding/removing miners does not affect the mining output. If you are new to crypto, you can read a more detailed explanation of mining here. ETH's "gas" is not like fuel (it cannot even be stored). It is just a computational metric that is more akin to the distance a car must travel, but not what actually makes it move. The fuel is electricity and it must be paid for with ether. When you transact you are also paying for the "car" which is the use of all active mining hardware/validators for a fraction of a second. And ether is just money. If you put too much weight on these simplified analogies, you will not understand the economic actuality behind them. This is a source confusion in the crypto space, and it is used to support false narratives. From an economic perspective, ether is money. Once you understand this, you will know that the narrative that BTC and ETH are not competing because they are different things is analogous to saying fax machines do not compete with the internet. The beautiful thing about ether is that it is actually not "just money". It is a mixture of a scarce monetized commodity, money, bond and tech stock.
Monetized Commodity: Ether is becoming more scarce and will continue to do so with the transition to proof-of-stake and EIP-1559. Ethereum does not have a supply cap, but it does have a roadmap for a sustainable security model and if it achieves a positive cashflow then it will not only eliminate issuance, it can become deflationary. An argument can be made about potential issues with Bitcoin's sustainability in the long run.
Currency: Ether is used as a unit of account and medium of exchange to pay for every activity in Ethereum. It is also used in the same way for venture capital related to ICOs, and Ether is also used as collateral in the DEFI space and new monetary uses will continue to emerge. It is an immature form of money, just like Bitcoin is an immature form of gold. Some people prefer to say that Ether is just a utility token. However, a utility token is just a narrowly scoped form of money. Not only is Ether's scope within its digital economy growing, by next year users will be able to pay millions of merchants with Ether through Paypal. We have never seen the adoption of a new form of money grow organically. New forms of money have always been imposed by authorities. What would the organic growth of money look like? It would look like Ether.
Ethereum's digital economy: Ethereum has limitless use cases and it is already generating economic activity with real world usefulness. Ether's value will benefit from acting as the native monetary asset for Ethereum. As Ethereum's economic activity grows, the velocity and/or value of ether must also increase.
Bond: With proof-of-stake you need to lock up Ether to receive a yield in return. It is similar to how bonds work.
Tech Stock: Ethereum provides a service. That service is paid with ether. The network is controlled by holding ether that is staked. The more valuable the service provided by Ethereum becomes, the more users will be willing to pay for transactions and the more valuable the protocol and the Ether token become. Cloud based services is the entire business model of many companies. The network will be entirely operated by stakers who happen to be the recipients of transaction fees. It is not exactly the same as holding a stock, but there are a lot of parallels.
Full reserve banking model: This is a bit of a stretch, but it is a potential end-game for Ethereum. It can serve as the base infrastructure and reserve asset for a full reserve banking system. In a nutshell: a consortium of banking companies can be formed to standardize a framework to hold and stake Ether under custody in exchange for wrapped Ether. Customers deposit Ether, banks exchange it for wETH and stake the original ETH. Resting balances of wEther on customer accounts can receive a cut of the staking rewards. Banks get their profit model, customers get to spend wrapped Ether with traditional banking services and potentially receive a share of the staking yield. Customers could also have access to a yield curve based on variable reserve requirements. This would allow banks to create money (which is actually good for the economy when it is done with moderation), but for the first time ever customers would have the choice of how much risk exposure they are comfortable with. This dynamic could help to establish a form of democratic check and balances system that discourages moral hazard. Ether could become a godsend to banks in the land of negative yields. It's a pipe dream, but not entirely impossible. Don't forget that the US OCC has essentially given banks the green light to take the first steps in this direction (US banks have been approved to use the Ethereum blockchain for their operations AND they can become validators... yup this happened).
EDIT 1: Adding an analogy to explain why ether is money: Let’s say I have a car with a 14-gallon fuel tank and I want to take it on a road trip. The car is not aware of the price of gasoline, and it would not travel any farther if the price of gas would double the next day. That’s because the intrinsic utility of oil has nothing to do with its monetary value. The car needs gas because of its particular physical properties and how the ICE is designed to utilize it. If I want to drive from point A to point B and it takes a full tank to get there, it will take that full tank no matter what happens to the monetary properties of gas/oil. This is fundamentally different from how Ethereum uses ether. Ethereum (the network) is not trying to be money, but it utilizes ether exclusively for its monetary properties and not because it can be magically burned by an imaginary engine of sorts. It costs money to participate in the network as a miner, and their engagement is financially incentivized with ether. Block space is a scarce resource, therefore participants who wish to transact use ether to bid for it. These interactions are utilizing ether as a monetary medium of exchange. In the long run, as the price of ether goes up, the ether denomination of gas prices goes down. That happens because no one is using ether as gas/oil, and it is actually being used as money. In the short run you may see the opposite occurring because of the dynamic between the portion of block space demand that is inelastic and the demand for ether. EDIT 2: Revisiting key concepts to explain how they will become price catalysts.
Wide adoption of L2 solutions: these will amplify the base layer block space value while encouraging further network adoption by a significant reduction of fees. A successful integration with DeFi protocols will dismiss the "Ethereum killers" theory and consolidate market confidence.
EIP-1559: reduce excessive financial incentives to miners by burning transaction fees. This will also discourage miners from attempting to artificially raise fees via spam.
Sharding: scale L1 bandwidth, compounding the effect of L2 solutions, further consolidating Ethereum's dominance in the DeFi space, making it feasible to introduce new use cases and eventually increase trx fee revenue.
The switch from PoW to PoS: discontinuing PoW will eliminate the operating costs related to mining and will allow for a reduction of issuance. Money that was previously allocated to buying mining equipment will be redirected to the acquisition of Ether. Staking Ether will remove it from circulation for extended periods of time. Operating cost will be negligible, allowing validators to withhold most of the Ether revenue. This will be the greatest bull market catalyst in the history of cryptocurrencies and it will eclipse the effect ofBTC halvenings.
Bitcoin maximalists will be nay-saying all the way through and past a market cap flip. Do not get caught up in their narrative. If you are not sure, then it is better to rebalance your portfolio proportionally to market caps. If none of these things happen and Ethereum turns out to be a failure, then you would only have reduced your gains by 20%. Otherwise, ETH will be making you mountains of money. EDIT 3:Ethereum killers Ethereum killers remind me a lot of Tesla killers, but a lot worse. People need to understand that cryptocurrency platforms targeting financial Dapps are fighting the equivalent force of a black-hole when it comes to Ethereum’s network effect and user retention in this space. Bigger players, with bigger money, are entering this market and they will not settle for anything other than the top dog. This pattern reinforces Ethereum's position as the premium financial system, which ends up attracting even bigger players and resulting in the black-hole effect. To make matters even more complicated, financial apps are more valuable when they are surrounded by a rich and diverse variety of digital assets and other natively defined Dapps. There is not much you can do with your money in a ghost town. It is VERY difficult to build this type of environment up because the platform and dapps must also have established full trust from their user base. This is not to say there is no space for other networks to grow, but just don’t get your hopes high that they will be taking Ethereum’s stronghold as a financial system. There are other use cases that do not require the amount of decentralization and security offered by Ethereum, and the networks that can focus on these are the ones who will be able to coexist with in the long-run. Gaming, ERP interoperability and supply chain are good examples of such use cases. Remember that alternatives with cheap transactions have existed for a while and they have barely touched ETH's dominance (EOS, NEO, VET, QTUM, IOTA, LSK, STRAT, ARK and dare I say... TRON). EDIT 4: Refuting critiques about dynamic monetary policy If an argument can be made that the financial incentives to operators (miners/stakers) are excessive or insufficient then an argument can be for the implementation and execution of a dynamic monetary policy. I don't think an arbitrarily picked issuance schedule determined during the genesis of a new highly complex system is likely to be efficient through its lifecycle. Bitcoin's monetary policy provides the certainty of stability and protection from abuse, but it sacrifices the possibility of efficiency and jeopardizes longevity. It would be like if a captain of a ship would point it in the direction of its final destination, set the throttle, then fall back to his cabin for a nice bottle of chianti and hope that the ship would arrive safely. There would be no one at the helm to navigate the seas, no one to make sure it stayed on route, no one to avoid the storms or to take advantage of currents. In my opinion it is a pretty bad approach to something as critical as monetary policy. With respect to Ethereum's dynamic monetary policy: I don't see any evidence to suggest developers have been enriching their pockets by keeping issuance at the levels they are. Developers are stakeholders and the Ethereum fund holds a lot of ether - debasing ether is against their self interest. There is a great misunderstanding that the one's who are adjusting issuance are the recipients of the new tokens. Is there any documented case of this happening? EDIT 5: Addressing Bitcoin's immutable monetary policy The idea that Bitcoin's monetary policy cannot be changed is a myth. It is a false narrative that takes for granted that the issuance subsidy will no longer be necessary at some point, but there is no way to objectively assert this. There is no divine power preventing the monetary policy from being changed. If the security model for Bitcoin was jeopardized because of insufficient cash flow to miners, then Bitcoin's monetary policy would be the first thing on the chop board to go in order to remedy the situation. EDIT 6: Five years ago naysayers were screaming about how everything that is being done TODAY in the Ethereum network would never work. Now they are calling Ethereum a scam, or that is is a platform for degenerate gamblers, or that the fees are too high and therefore it is useless, or that it can't scale, or that something else better is just around the corner to take its place.... you know... basically all the things that traditional bankers have to say about Bitcoin, maxis are saying about Ethereum. EDIT 7: The greater the impact a new technology can have on society, the more difficult it is to comprehend its potential. Ethereum has the potential to have a dramatic impact on human civilization. It could take decades for it to be fully realized, but it would change the world in ways that we cannot possibly imagine today. If it happens, the moon will be just a pit-stop. EDIT 8: Thank you so much for all the awards! Ethereans understand this stuff, and I could feel the frustration in the air every time someone said that Ethereum is not money, or that ETH and BTC are completely different things, or all the other bs attacks that are in great part founded on a lack of understanding of how BTC and ETH actually work. I would love to hear what guys like Raoul Pal, Pomp, Michael Saylor and Fernando Ulrich (for my Brazilian friends) would have to say about some of the things that have been written here. If you know a way to get their attention, then please do it. EDIT 9: Clarification about Lyn Alden's opinion of Ethereum EDIT 10: I am still working on a much more ambitious write up. It is focused on economic aspects of money, monetary systems and global asset markets. I still have not incorporated any of the information written here, but I eventually will merge it together. One of the main new ideas that I am exploring is challenging the notion that money has no intrinsic value and that scarcity is the most important attribute of money. I think I make a compelling argument to demonstrate that facilitating economic activity is more important, and how Ethereum has a big edge over Bitcoin in this regard. Here is the link to the WIP doc. TLDR: Ethereum is not stopping at the moon... it is not stopping on Mars... it is going straight out of the Milky Way galaxy in search for alien life... but you should own some BTC just in case the spaceship malfunctions during launch.
Compass Pathways [$CMPS] - Trusting Peter Thiel With My Psychedelics Bet
Hello fellow degenerate gamblers, Kimchi here... back with another DD to make you all some tendies. My last posted DD was all about headphones... ended up being a nice 5-bagger with stocks. I'm here today to tell you about Compass Pathways [$CMPS], a company I think will be my next multi-bagger trade. Psychedelics: Why psychedelics? Psychedelic (and $CMPS in particular) companies tend to focus on the medical aspect of shroom use, looking to create medications to treat illnesses that are traditionally underserviced. Compass, for example, focuses on treatment resistant depression - essentially depression that hasn't been able to be treated by medication, counseling, etc. Depression rates have been rising for years and CMPS and other psychedelic drug makers look to target those most affected. Depression rates increasing Psychedelics have also been anecdotally shown to help with PTSD and opioid addiction. It's a field that's just now starting to gain traction and hopefully those who need help the most will be able to get it as the science develops. Why Compass?: So why $CMPS out of the many stonks in the psychedelics universe? 1) Compass Pathways is the only psychedelics company currently listed in the US. I don't mess with OTC stonks (have been burned too many times) and I don't mess with Canadian listings (who calls their currency the "Loonie?). Don't know why other companies haven't listed in the US yet, but I'm not messing with those companies until they do. 2) Peter Thiel is the largest shareholder and they have a superstar board/advisors. Everyone here knows and loves Peter Thiel; he owns 7.5% of the company. The board members at CMPS include the former R&D head at Merck, the former Chairman of Global Pharmaceuticals at Johnson & Johnson, former Executive Director of the European Medicines Agency among others. Their scientific advisory board includes doctors from Stanford, Harvard, Johns Hopkins, Imperial College, etc. This is a company stacked with talent. 3) CMPS has received FDA "breakthrough designation" and are currently on phase 2 trials. Breakthrough designations are typically given when preliminary clinical trials show significant improvements over existing treatments. "Breakthrough therapies are supported by the FDA throughout the clinical development programme to ensure as efficient a process as possible." 4) CMPS runs the COMPASS Discovery Center, which is working on finding uses for psychedelics. The biggest pushback against $CMPS is that they're currently only working on one product, COMP360, for the treatment of treatment resistant depression. However they also run the COMPASS Discovery Center, a collaboration between Compass Pathways and various universities to find new uses for psychedelics. $CMPS will be the exclusive licensee for all new compounds generated. 5) They're just seem like good people. Sure this may not be important to company profits in the long term, but this is something that makes me feel a bit warm and fuzzy inside. They recently raised over 1.4mil GBP (Around $2mil 'merica dollars) to help the homeless in London. Maybe I'm stupid, but this helps me trust the company's leaders a bit more. Target Price: I'm not a research analyst so I'm not going to break down the numbers in terms of sales of COMP360 or potential profits from licenses from potential discoveries at COMPASS Discovery Center. Smarter people than I can do that analysis... However, just looking at how high some of the weed stocks got in 2018, I don't think a market cap of $20bn is a stretch (that would put $CMPS at around $500 to $600 a share) if the theme takes off. GW Pharmaceuticals, a cannabis company that specialized in creating medication from cannabis, recently got acquired for $7.2bn. I put my trust in this star-studded company to do some incredible things. Positions: 5,500 shares (I don't do options) of $CMPS. tl;dr: Psychedelics has the potential to help those with depression, PTSD, addiction, etc. Trust in Peter Thiel and $CMPS to take us to tendieland.
S.T.A.G WHEEL DELIVERS!! 3 month update and 47% return on capital over 3 months!!
What's up TRAITORS! Due to OVERWHELMING DEMAND I've decided to release my 3 month update on the STAG WHEEL and allow you all to bask in the SERIOUSLY TREASONOUS AMOUNTS OF GAINS I've enjoyed over the last 3 months using my PROPRIETARY wheel strategy. Current positions: 31 FREE shares of PLTR -1 03/19 $30 put on PLTR. sold for $3.36, current value $224.50 Overall portfolio gain of $1178 out of $2500 capital collateral deployed. THATS A SERIOUSLY TREASONOUS 47% IN THE SPAN OF 3 MONTHS!!!! At this rate i will achieve my first 100 free shares during the first year, allowing me to start a second STAG WHEEL and begin to compound the gains exponentially. My goal is to get to 3000 free shares at which point the premium will be enough to fund a brand new STAG WHEEL each week. How did i do it? SIMPLE! I channeled my inner Benedict Arnold and committed treason on a WEEKLY BASIS by selling cash secured puts and reinvesting the premium into shares IMMEDIATELY. For those of you who have been living under a rock for the last year or so, the STAG WHEEL is my PROPRIETARY options strategy that's TAKING THE WORLD BY STORM. Heres a rundown:
Pick a stock you want to hold long term, something you believe will be worth more in the future and something you want to eventually own a bunch of shares of.
Sell a weekly cash secured put on the underlying security somewhere around .30 delta (Delta and expiration are flexible, use your own discretion based on your risk tolerance), and use the premium to IMMEDIATELY buy shares
If exercised, sell a covered call on your new 100 shares using the premium to IMMEDIATLEY buy shares again.
Rinse/repeat until you have 100 shares, at which point you can decide to start a second STAG wheel on the same underlying or use your original capital for something else.
The STAG wheel has certain benefits over the traditional wheel:
Reduced loss of opportunity. Have you ever wheeled a stock that went to the moon and all you got out of it was the measly $75 in premium? NO LONGER. With the STAG WHEEL you will get a taste of that sweet rocket ship and have much more upside exposure to an appreciating company.
Are you a degenerate gambler who blows his premium every week on GME yolo's? NO LONGER. This strategy forces you to dollar cost average into an actual investment.
Are you sick of paying short term capital gains on your sweet sweet tendies? WELL TOO BAD, we all have to pay a little short term capital gains, but the STAG WHEEL offsets this a little by forcing you to buy and hold shares until long term capital gains kicks in.
CONS: The STAG WHEEL is good at almost everything, but there are some things its not good at:
Companies that you dont want to hold long term, companies that have a bleak future, and general downward market trends.
The STAG WHEEL gives you some really nice upside exposure, but it exposes you more to downside risk than the standard wheel. I suppose its theoretically possible that some traitor's will attempt to wheel a stock they don't believe in and that they don't want to hold long term. I dont know why they would, but its theoretically possible. THIS STRATEGY is not for them. WHEELING LOSER STOCKS IS FOR BETA-GANG, THIS IS THETA GANG, AND THETA IS THE MOST TREASONOUS GREEK OF THEM ALL
Gamestonk. Gamestop. GME. My thoughts are on Reddit, under my u/martinshkreli & subreddit martinshkreli. Those are authentic and discuss why GME is one of the most unprecedented events in market history. Here, I'm going to discuss the populist attitude that is creeping into this odd situation and add some thoughts on short-selling in general. Let's cover my own unique angle on the concept of a 'short squeeze'. Most would define it as an erratic upward change in price driven by short-covering. I believe short-squeezes defined this way are usually a fictitious idee fixe that aggregates a number of discrete market behaviors and dynamics into a convenient and pithy moniker. The image of python-like buyer constricting some hapless speculator into a higher stock price is evocative but misleading. Many knew me as a short-selling specialist on Wall Street, focused on 'binary events' of biotech stocks. I think I've seen it all: I was once short more than 75% of a company's shares outstanding (I do not recommend this). I bought 75% of a company on the open market, etc. Short-sellers are governed by the same market dynamics as longs. They get nervous when positions go against them and consider exiting. Like longs, they can double down if they wish. The only difference is that, of course, short positions grow when stocks rise. And they can rise infinitely, while long positions fall asymptotically to zero. But both get, theoretically and assuming no fundamental changes have occurred, more attractive as they move against the trader. Short sellers have to pay borrow fees to longs (typically tiny, but sometimes massive). They have to locate stock to short, again usually easy, but sometimes difficult. Both are perilous when those rare adverse times arise. Why? Despite the possibility of a growing cost of renting stock, the ultimate fear of a short-seller is a "buy-in". It is nightmarish and has only happened to me once or twice, excluding options-related activity. A buy-in occurs when a broker decides to forcibly exit the short position on behalf of the trader because the broker and trader cannot secure the 'locate' which is supposed to underlie the short sale. The buy-in order is typically violently disruptive: a market order for the whole position near the closing hours of the market! The SEC published a list of stocks at risk of buy-in: the fail to deliver list. My point is that a 'short squeeze' can only practically affect the trader for two reasons. The first is that the trader digs in, doubles down and doesn't exit as his position grows. That's bad trading, and will eventually blow the trader up. But, if the stock is a 'good short', that short will be replaced by more traders with stronger hands/a better entry price/smaller position. What's more is the average investor can't tell if this is happening! The second is the buy-in. I haven't heard GME shorts being bought in, but again, how would you know, other than the grapevine? My point is most of the disruptive, exciting trading here is simply long speculators banging away at the stock. New longs are sometimes attracted to rising prices, speculating they'll increase further: that's called momentum. Those buyers are typically offset by the existing longs who are excited to exit at higher prices. But, if there is a large short position in the stock, a speculator may feel that those covering (buying to get out) short-sellers will provide additional fuel to the momentum. That's sometimes the case, but higher prices should lead to more supply from both long and short sellers. My feeling is the actions of large long holders probably have more influence on the stock price than shorts who dart in and out, and typically in smaller size. Remember that shorts who capitulate are often just replaced by new shorts who are attracted at the new lunar prices. In essence, 'short squeezes' become a self-fulfilling prophecy as new long investors pile in trying to 'squeeze' this sometimes phantom of a short seller, and existing long investors may hold off selling for the same reason. With some Popperian skepticism you will easily see that the same dynamic can exist without the short boogeyman, or with a short boogeyman of any size. Speaking of which, where is Chanos and his slavish groupie, Carson Block? Speculative momentum can occur for any reason. Let's not forget that the 'trapping shorty' strategy is an awkward idea for a few reasons. Short sellers are often sophisticated market participants who are betting on the decline of a stock. You usually don't want these type of traders sniffing around your favorite longs: I recall writing a 'short report' on a stock to watch it fall 50% that day. If you do a study of stock returns of highly shorted stocks, they are pretty awful. The reason there is 'no arbitrage' is the borrow rate. But even if you got this poor short to capitulate and squeeze, the amount of buyers who are now holding stock at absurdly high prices put way more energy (and money) into the stock than the short seller's white towel ever could. A sledgehammer killed the fly: now what? Alternatively, are you the host or the parasite? On populism. I don't really think most investors or speculators should go into any investment thinking that there is 'an enemy'. Concentrated (big) investments (bets) give rise to emotional behavior, typically the enemy in trading and investing as it clouds rational thinking. It's a lot better to be Socratic with your 'opponent' and understand what they're thinking. If your position were to be half the size it currently is, would you be as emotionally interested? Try it! You'll lower your risk and feel better. Some of the behavior going on at WSB sounds more jihadist than speculative. The idea that there are some investors who are 'good' and others who are 'bad', or that there is an 'establishment' is BS. Everyone has the same goal: I have a pile of money, I'm trying to make it bigger, fuck your pile--I don't care about it. Anything other goal is contrived, foolish and won't help you win. You can't 'fight the rich' by trying to become one of them. Don't you see the irony? A related thought experiment: what if this trade continued to work really well? And another, and another? Then some WSBers are billionaires. Aren't they the new 'enemy/establishment?' Who do you think hedge fund managers are? They're typically the anti-establishment. Things have changed a bit, but the most successful HFMs are actually the WSBers of the past. These are guys who didn't fit in well at i-banks, often got kicked out for having big mouths or not wearing the right ties, or just wanting to wear jeans at work and not fill out TPS reports. When they started their firms, people like Soros, Icahn, Steinhardt, Robertson, Cohen, Griffin, Loeb (who has posted anonymously on boards), Samberg, even Cramer were fish out of water and had very tiny amounts of capital, often begging for investors. The need for an enemy. To sustain increasingly insane behavior, it isn't uncommon to use a straw man or a scapegoat. Oppressive regimes used this technique in the past, and the media uses it today. Retail investors don't have much power individually. With your $5k RH account, you can't day trade or even qualify for margin. It's pitiful. So, it's understandably quite exciting to finally feel like a 'player' that you read about. To be a part of 'something'. The problem is the media is goading you to be somewhere between a lemming and a life-agnostic but impotent jihadist. Blowing yourself up won't impress anyone, and there is no afterlife here, other than a minimum wage career and mom's sofa. GME and shorting in general is small potatos in the scheme of the Wall St. machine. Don't worry about getting 'even' with the rich. That's jousting at a windmill that will waste your energy. No one here, hopefully, wants to be a lemming. Those willing to 'die on this hill' have to realize something: Wall Street doesn't care about its speculators. The new traders who vanquish the old simply replace them. Nothing changes. When LTCM blew up, or Amaranth, Visium, Galleon, or anyone else, it is 'out with the old and in with the new'. So, perhaps WSB can blow up 1 hedge fund or maybe 5, but so what? Eventually, the tables will turn and it will blow up. The leveraged, fast-money trading markets are a violent place and the only people who care one whit are the brokers charging fees (directly or indirectly). They only care to make sure the sorry carcasses can pay their bills. They know there will always be another speculator lined up, ready to shove his money into the lotto machine. There is no pride here. There is no credit for being a good solider. You either survive or you don't. Your job is to survive and thrive. Becoming a lemming will guarantee failure as per the statistical truism of gambler's ruin (enjoy the proof in measure theory). With enough time, anyone playing a game with <50% success rate (equal payouts), will lose all their money. Get that number above 50%. Add the Kelly Criterion to your trading strategy. You might ask, "(that's all well and good OR we'll agree to disagree) but, Mr. Shrek, isn't this a good trading strategy? (ganging up on shorted stocks)?" As long as you're not a lemming/jihadist (willing to walk over the cliff, whether or not you have a "cause"), and you ignore a somewhat slimy ethical/market manipulation question, I don't see anything wrong with it. There are better ways to make money, since you're asking. Stoking (or worse, participating in) a buying frenzy that is akin to a forced musical chairs game is a little crazy. Once a stock is absurdly valued, you're just hoping the sell-off doesn't happen while you're holding it. If you have enough lemmings or jihadists 'helping you', that's a good thing. They will hold your bag--someone needs to. Of course, if you've found the "next" Microsoft or Apple, no one needs to hold any bags. But, no company can increase its objective (aka fair) value quickly enough for this... phenomenon? situation? absurdity?... to make it reasonable. Those things take years, go slow and steady, and this frenzied buying/"short squeeze" phenomenon won't let value play a factor. That's why WSB GME longs have shifted theses from "well, Gamestop was/is cheap" to "the gaming cycle" to "Ryan Cohen will save us" to "...jihad?!" Each member of the herd has its own financial parameters, too. Some may have $500, some $50,000,000 or more. Some may be willing to lose their entire stake (and even more) on an out-of-the-money or levered trade. Some are not. Some were in the latter and somehow end up in the former. Some are in one column at one price and another column at another--some are switched from column to column by force. Today's lemmings/jihadists are tomorrow's sellers. When you're hanging off the mountain, pay attention to the guy holding the rope. Loosely 'coordinated' buying can certainly affect stocks. Heavily shorted stocks and small cap stocks are the kind that require less capital than typical to 'move' a stock. The irony here is when putting on a position, the trader's goal is typically NOT to move the stock with his actions! I still think GME is wildly overvalued, but that doesn't exactly mean I'm 'bearish'. One funny idea here is reflexivity: GME stockholders may become serious GME customers and the company's fundamentals improve that way! Excluding some such miracle, eventually GME stock will trade at <50 again. I still think it will trade at 1,000 or more BEFORE that happens, and that the decline process will take a long, long time (several years). Keep in mind, anything can change. GME can do serial secondaries that destroy its stock. Management's job is to create value for their shareholders--but perhaps they will avoid pissing them off. There's a strange loop! Finally, the stock could be halted by the SEC or completely banned by brokers. Don't overdo it. Watch the borrow rate. Keep your positions at less than 25% of your capital--live to play another day. Disclosure: I've never traded GME stock and do not intend to. (From martin, posted by mo)
I spent few hours predicting the possibilities of short squeeze types that GameStop could bring. Then I applied physics to Finance. I came up with a new phenomena called START SQUEEZE. First of all we know about normal short squeezes, Gamma squeezes. You can research about this online as there are plenty of materials out there. So let me explain this new squeeze that could happen and turn GamesStop into a gigantic e-commerce. Let's look how a star is born? A star is born when atoms of light elements are squeezed under enough pressure for their nuclei to undergo fusion. All stars are the result of a balance of forces: the force of gravity compresses atoms in interstellar gas until the fusion reactions begin. I'm talking about a START SQUEEZE. That's right. Remember a start remains alive for a long time if the forces in the reaction remains equal. So what happens if we have a Short squeeze, followed by Gamma squeeze and then if people still don't sell in bulk. If investors keep on buying and if retail investors sell 1 or 2 shares at very high prices like selling diamonds? Then there won't be a sell off. It will simply a process of exchange of hands of the diamond. As long as the buying and selling remains equal ( like forces in a star's fusion ) share price of GameStop WON'T FALL. How is that possible? Imagine if every retail investor out there makes a promise to themselves that they will never sell a single share at loss and if the use ONLY LIMIT SELL order rather than market sell order then a new investor cannot buy the stock for cheaper price. GameStop is in a unique situation where short sellers have to cover more than what's available for them to buy in my view. I'm estimating nearly 150 million shares to be covered. What if institutional investors dump their position? This is even better for long-term. So for share price to fall, there can be two reasons. 1.Selling existing shares ( retail and institutional investors) 2. Short Selling. Now Shorting more and more shares in GameStop going to make this rabbit hole bigger and bigger as it increases Short Interest exponentially because lower price attracts new investors. Shorting is the easy way but the most dangerous way for short sellers. However it institutional investors sell to help short sellers like what Fidelity has done then they will give up their positions to retail investors. So what happens? Same thing that happened to AMC will happen. AMC's institutional ownership has dropped from 30+% to 16% now. So what does it mean? Retail Investors will control the price of AMC. Hedge Funds can keep on shorting more and more However when it explodes it'll be very costly. We could see my new phenomena called STAR SQUEEZE. So the price will continue to trade above the price level after the squeeze. This is the whole reason I said GamesStop will be the next BITCOIN. Wall Street knows nothing about valuation. Everything at Wall Street is a pump & dump because the real valuation of a company is all about PEOPLE'S PERCEPTION. Gold, Silver, Diamonds are just metals and stones that are rare, However people perceive these things as valuable things, that's why they pay top dollars. Gold doesn't have balance sheet, production etc. Most import part here is to be an investor not a trader or gambler. Never buy GME shares on margin accounts. INVEST WHAT YOU CAN AFFORD TO LOSE. Currently media is trying so hard to distract people and stop retail investors from buying GamesStop stock but they are failing. Failing BIG. Truth is Wall Street is bleeding. If my predictions are going to be true. I posted this about a week ago.There will be a market crash. Institutional investors will start dumping shares. Then they'll call it it's a market correction, they have questions about valuations etc. This could be the last tactic that they could used to get those GME shares from retail investors. If you believe what you believe then you continue to believe as long as there things to back your belief, otherwise it's just a dream. Wall Street is pumping stocks like Silver and Cannabis then calling it WSB buying them. It looks like WSB is now managed by Wall Street just like all other platforms. This is not a financial advice, these are my views and opinions. If you feel the same then we are on the same page if not that's fine as well. My best advice is make your own decisions when investing. Many people often follow analysts but if you look at analysts success rate most of them less than flipping a coin. POWER TO THE PEOPLE , WALL STREET VALUATION MEANS NOTHING WHEN TRADING IS ALL ABOUT SUPPLY & DEMAND. THAT IS THE FUNDAMENTAL OF TRADING. I'm buying GME because I just love the company name GAMESTOP! I'm addicted to Buy button. www.facebook.com/theprestigeroad
Stock futures are currently at around +0.80%. I'm down as fuck on my positions as most of you already know... I stated before I never put more than 10k into short term options plays, which is how I've lasted 20 years in this game. These are extreme times. I am now putting that rule on hold. If these futures hold up, tomorrow I am dumping another 10k into my SPY puts and VXX calls. I am literally doubling down to a 20k total bet. This extra 10k will be January/February dated since my December timing appears to be early. Still conservative strikes: VXX 22c, SPY 350p, TLT 162c
The market is going to tank. Let me just give a bit of background so you know why my opinion is better than yours... I am not a bear. I am not a bull. I go where the market tells me to go, I bet where it tells me to bet. And right now, the indicators are telling me to take a strong bearish position. So that's what I have been doing. I've been trading more than 20 years. I was trading the great financial crash while most of you were watching fucking Spongebob or whatever the fuck you kids jerked it to. This is not my primary job, but I make a good deal of cash on the side every month, timing the market and swing trading broad market ETFs. I do my research, I know my shit, and I rarely touch your shitty meme stocks. I'm doing you all a favor of once again sharing my insights into this market, so you too can share in my profits and maybe learn a thing or two. I will lay this out as cleanly as I can, offering multiple premises for my bearish bet and explaining them in detail. I've covered some of this in the past, but wanted to consolidate everything and more in one place. This post will be long. If you want to cry about that rather than thank me for my service, you will go broke soon and deserve it cuz you are a lazy fuck. PRESSING FORWARD! Primary Bearish Premises: Premise 1: The Market is Massively Overvalued (Macro) Premise 2: SPY is Topping Off and Running on Vaccine Fumes (TA) Premise 3: The Fed CANNOT Print Money You Retards (Facts) Premise 4: Quantitative Easing is Deflationary (Theory) Premise 5: Credit Markets are Contracting (Data) Premise 6: Banks are Loading Up on Safe Bonds While Retail Loads Up on Stocks (Data) Premise 7: Unemployment is Still Sky High (Data)
Premise 1: The Market is Massively Overvalued
There are plenty of small, detail arguments for a bearish position. Covid cases rising, election uncertainty, stimulus failing, and so on. Plenty of others have made this case, so I won't focus on the small scale issues such as these. What I want to give you is a larger, macro picture. Because the market is simply overvalued, period. The market has become divorced from the overall economy. I understand tech, and why they have a bullish case for growth in the face of Covid lockdowns... My point here is that you need some REAL WORLD measures to tie "future earnings" down to reality, to prevent irrational euphoria from taking over your mind. There are plenty of indicators out there showing that stocks are overvalued. We could talk about insane P/E ratios, about euphoric meme stock flops like NKLA, and so on. The metric I'm going to present here is not new by any stretch. It isn't unique or original. But it is undeniably useful, and carries strong weight, whether modern traders wish to shun it and its originator or not. I'm talking about the Buffet Indicator. https://preview.redd.it/oem2uhz714061.png?width=1008&format=png&auto=webp&s=b1f7e97544eba52859b986af68b4b80556660e43 For those of you new to this concept, it is simply the total stock market valuation divided by GDP. The point is to compare total market valuations with some hard, trailing, real-world metric, in this case GDP. When market valuations uncouple strongly from actual market conditions, it is a strong signal of irrational stock valuations. And that presents opportunity for those paying attention. Note that this chart has already been detrended down to account for historically rising P/E ratios, and it still shows a strongly overvalued market, equal to what was seen during the DotCom bubble. That's bad news, folks. This is the REAL issue in the present market, and why buyers are becoming exhausted. Covid, instability, elections, stimulus... These are all just catalysts to give that equity bubble a little prick. Only the dumbest of the dumb are still "buying the dip" under current market conditions, which means mostly clueless retail gamblers on WSB. All these perma-bulls are doing is offering liquidity to the institutional investors to help get them out of their positions. In the end, we all know who is left holding the bag.
Premise 2: The Market is Topping Off and Running on Vaccine Fumes
I'm not a big believer in technical analysis. Most of it is bullshit, astrological voodoo if you ask me. But some of it works, and when technical analysis works, it is simply being used as a proxy for assessing market sentiment and emotions. Let's take a closer look at the teaser SPY chart I posted above. https://preview.redd.it/h0ndq2a914061.png?width=1808&format=png&auto=webp&s=3fe30a5ad23952719c69c6634debe7fe8c0832af As you can see, the market has been repeatedly rejecting multiple new highs. This process was briefly interrupted by positive vaccine news. We breached a new high on Pfizer vaccine results, but even that new high was instantly rejected and resulted in a sudden reversal selloff. The Moderna vaccine news created another short rally, lower than the Pfizer high, and that too was followed by a selloff. In other words, the market is continually rejecting current market valuations. As they should be, if you were following the point above. We are running on vaccine news fumes, and those will not last long. If you develop an instinct for these things, you can almost feel it in your gut: The market WANTS to head down. If this isn't the top, it is close to it. $366.77 will very likely be the high for SPY for the year, and will soon unwind downwards.
Premise 3: The Fed CANNOT Print Money
I know this will come as a shock to most of you idiots but the fucking money printer does NOT GO BRRRRR. The Fed has to follow the laws that govern it's actions. The Fed does not have the legal authority to simply print cash and hand it out. Go ahead and read the Federal Reserve Act, and take a look at the Fed's actions, for proof of this. It doesn't even have the authority to print cash to buy corporate bonds or anything else. What the Fed "prints" is called "reserves." Source: https://www.stlouisfed.org/open-vault/2019/august/open-market-operations-monetary-policy-tools-explained So what, you say? So everything. The key point about reserves is that they cannot be spent like cash can. When a bank gets reserve funds in its reserve account at the Fed, it CANNOT SPEND that money. All the bank can do is use that account as collateral to lend against. Which means if the banks are not lending, those QE funds are NOT entering the economy. They might as well not exist. And banks are not lending, as we will see below. This is the counter argument to all the ignorant retail traders who will argue that the Fed is "backstopping" stocks, or that the Fed will not "allow" the market to crash. The Fed has no power to print money, and therefore no power to buy stocks, and therefore no power to prevent a crash. The Fed's power is illusory, but enough people buy the illusion to make it effective. That won't last forever. Just think about it. If Fed actions and QE really made stocks rally the way people claim it does, why isn't the Japan Nikkei constantly breaking new all time highs???
Premise 4: Quantitative Easing is Deflationary
Quantitative Easing is not Cash. In fact, QE is deflationary. Here is how QE works, in a nutshell. The Fed buys bonds from the big banks. Except the Fed isn't buying them with cash. In exchange for the bonds, the Fed puts funds in a reserve account held by the bank. These reserve funds CANNOT BE TOUCHED by the banks. All the banks can do is use this account as collateral to lend against. In fact, it's worse than that. Because the Fed is removing assets from the open market, and not paying cash for them. It is purchasing liquid assets with illiquid reserves. Despite all the Fed's talk about "creating liquidity," what the Fed is actually doing is REMOVING liquidity from the system! Why would they do this? Answer: To lower interest rates. Don't take my word for it, the Fed explains this itself! Source: https://www.stlouisfed.org/open-vault/2019/august/open-market-operations-monetary-policy-tools-explained See, the Fed has to follow the laws that govern its actions. Despite what the public believes, the Fed does not have the legal authority to simply print money and hand it out. The Fed knows that the true source of inflation in a debt-based economy is through credit expansion. So the Fed does everything it can to reduce interest rates, both by setting reserve rates near zero and by using QE to drive rates down further. Only when credit expansion revives will we begin to see inflation and a true recovery. The Fed knows their hands are tied, which is why they keep hammering Congress to pass more stimulus. Perhaps the greatest strength of the Fed is in "forward guidance." The Fed simply uses words to convince the public that money is being printed, that inflation is coming, so that people go out and spend and buy assets. They are playing a trick on the public, and the trick is working. People actually believe inflation is coming, that stocks are being held up by the Fed, that money is pouring into the system. The public is wrong on every count. The Fed is trying to contract credit markets in order to lower interest rates in order to eventually spur lending in order to eventually create inflation. But in the meantime, QE is deflationary. As stated above, if reserve funds are not being lent out by the banks, they do not enter the economy, and thus QE serves a deflationary role. Let's take a look at the next premise, that banks are contracting the credit markets.
Shit's fucked up son. Real world economy is still in shambles. Market is more overvalued than it was during the DotCom boom. Still millions unemployed. The market is topping off and rejecting highs again and again. The Fed is not printing money and not backstopping assets, despite claims to the contrary. We are heading down, folks! Positions: SPY 350p 12/18 VXX 22c 12/18 Also anything else that strikes your fancy. IWM, GLD, SLV puts are all fine (dollar is going to rise). Longer dated TLT calls will print as well due to QE reducing bond yields, eventually. Go longer or shorted dated depending on personal risk tolerance. Timing can be difficult. My strategy is to periodically enter bearish positions when short-term indicators look good, and hope to eventually time the major dump. If things begin to stabilize short-term I exit the position quickly with a small gain or, rarely, a small loss. See: https://www.reddit.com/wallstreetbets/comments/jkm5jq/the_bears_arent_done_folks_these_diamond_hands/
The January 15th official short interest report stated 61,780,000 shares had been sold short. On the 15th, the share price was about $35. This is a crucial piece of information to consider. Short Interest is reported twice monthly, so the last report before January 15th was from December 31st, and the next was issued today February 9th, revealing a (still) staggering 78.46% short interest. Keep in mind, this report only shows short interest up to January 29th. Lets go back to the January 15th report which told us that 61.78 million shares had been shorted at prices less than $35. In other words, every single short of those 61.78 million was betting the price would be less than $35, and it's more likely that most were shorted around the $15 - $20 mark. We do not know the exact numbers. But what we do know is some of these shorts closed out of their positions before, that is evident by the SI report we received today. We can also draw another inference from this data: MOSTshort positions from the January 15th report have NOT covered yet. Today's report confirmed this speculation. The hedge funds and other players were able to drive the price down from $483 to $65 in less than a week. Regardless of the illegal actions they took to make this happen. They knew they would be able to do this. It didn't even take that long. So why in the world would they have covered even a single share above $100?? It is my belief that only the shorts who lacked liquidity and spare capital to pay interest were margin called, or chose to bow out early. Today's report all but confirms this theory. If you need more evidence, look at the overall market bleed that took place on the days right before the cut-off date for this report. What does that mean for the big players? The ones who actually have capital to sustain high interest rates and play the long game to mitigate losses? They are waiting to bring the price down to an acceptable level, buying far OTM calls, and letting the hype die down a bit before they even begin to cover. The current drop in price has been working in the favor of hedges in three different ways. First, calls far OTM are very cheap, and hedge funds are able to scoop up millions of dollars worth of options that they will later be able to sell or execute for profit. During the first peak, the furthest OTM call available were too expensive and to NTM for hedges to offset their losses. If my theory is correct, hedges stand to gain substantially on their far OTM calls expiring Feb. 19th. Second, the extreme price drop means there are tons of shares available for hedges to short now. During the last rise, there were nowhere near enough shares for hedges to short as the price dipped. Finally, it is obvious that shorts are better off covering at $50 rather than $480. They have effectively weeded out a large number of paper hands and profiteers. But that is neither here nor there, as we still control a substantial portion of the float, keeping sustained pressure on the shorts. Furthering my hypothesis, I do not believe Citadel gave 2.75b to Melvin to flush down the toilet. They are expecting Melvin to mitigate as much of their losses as possible. How might they do this? First, check the amount of money placed on 800c for 2/19. Obviously a portion of this money can be accounted for by retail traders caught up in the media bubble two weeks ago hoping to cash-in on the squeeze. Alternatively, I believe a large magnitude of the calls may have been strategically planted by hedges who had very low short positions, i.e. ~$35, and did not plan on covering during the first massive peak. Why not? Because now they have the opportunity, (FLUSH with 2.75B in cash for Melvin), to do some serious damage control. Would a professional gambler pay off his debt with a loan, or would he use it to cut his losses before repaying his loan? Now we know atleast 78% of the shorts ~$35 DID NOT account for the massive price increase. If give/take 40% of the shorts who did actually exit their positions before 1/29 attributed to the $483 price spike, IMAGINE what 78% can obtain. ALSO, while it is certainly possible that a decent chunk of this 78% have slowly been exiting their positions since 1/29, we also know that a large number of greedy bastards have been taking their place at higher price points >100, > 200, >300. While these positions are extremely profitable at this time (i.e. some hedges mitigating losses, while some reap ginormous gains after watching on the sidelines until the 29th), the low entry ~$35 shorts will eventually have to cover their losses. This will trigger a domino effect by inevitably applying upwards pressure on the new, high entry shorts, who will see the tidal wave coming and immediately take their profits (or maximum mitigated losses) and get the fuck out of dodge while they still can. TLDR: The most logical way to cut losses (while simultaneously accruing massive interest on current positions) would be by attempting to short the stock the whole way down from the top of the media bubble then finally closing out the terrible ~$35 short positions after driving the price down as far as possible, knowing that the price will skyrocket back up after they cover now they can cash in another fat chunk of change on the 800c 2/19 then short the whole thing back down again. At the end of the day, I have no clue how much they would net in losses, because that is contingent on the accrual of interest and which is directly associated with the price price point they actually have shorts located at (only they know this). In any case, this chain of events is the most logical way for a billion dollar entity to mitigate losses on a failed bet. Again, I want to reiterate, WHY would a hedgefund loan $2.75B to another hedgefund if they had not run countless simulations in order to determine the best possible outcomes? Disclaimer: This is my personal hypothesis based on the facts provided to us. This should not be construed as financial advice. I'm just a law student who likes money, video games, and stonks.
Hey WSB, I had a few questions regarding GME. Now, I'm no paper-handed bitch, but did want to open a discussion up as to a few things that have been on my mind.
Assuming short ladder attacks exist, what's stopping the hedge funds from just continuing to do it til we reach 0?
What's the point of the hedge funds doubling down on their shorts if they don't think it'll go down more? Wouldn't this actually be a BAD sign for us retail investors (gamblers, retards, apes, whatever you wanna call it)
How come the short squeeze (assuming it still happens) would increment the price like it did with VW? Why can't the shorts just cover their positions slowly over time?
How long do we realistically have to hold GME in order for a short squeeze to actually happen? I know everyone here's always saying "oh they're paying a shit ton of interest per day, they HAVE to cover soon". Isn't that interest rate smaller than actually paying for shares upwards of $42069 (obviously a meme number, more realistically, I'm assuming if the squeeze is to be squoze, we'd reach $1000, maybe upwards of $2000. I can't see it being much more without some HF tricks being pulled in order to prevent it from going up that high).
Mind you, I'd love to be bullish, and worst case scenario this is a year long+ hold for me, I believe Ryan Cohen definitely will be able to actually bring GameStop to a much larger market cap, and this is a much more, imo, lucrative sector than pet food/toys/whatever else. I'm sure he'll be able to expand into the tech sector as well, with Matt Francis being the new Chief Technology Officer, definitely looks like he'll be able to bring together a decent team of engineers (if you're reading this, I'm looking for a Software Engineering Internship for this summer or if any of you redditors have connections lmk...) Positions: gme: 130 shares @ 220 & 5k in leap calls amc: 600 shares @ 8 2k in leap calls EDIT: Ok what the hell, there actually is a shit ton of bots. GME 🚀🚀🚀
We look at the latest Global Gambling Statistics: Comparing revenue, popular games & personal data to discover the world's best Gambling nations in 2021. THE GAMBLER is yet another Hollywood remake, and, as usual, it's not as good as the original. In this case, that would be the superior The Gambler (1974), which was directed by Karel Reisz, written by James Toback, and starred James Caan.That movie captured a moment, while the remake merely copies one. “The Gambler” is rated R (Under 17 requires accompanying parent or adult guardian). Vice, inherently. What to Watch › Let Us Help You Pick Your Next Movie. Not sure what to stream next? We The Gambler (III) (2014) Parents Guide Add to guide . Showing all 8 items Jump to: Certification; Sex & Nudity (2) Violence & Gore (3) Profanity (2) Alcohol, Drugs & Smoking (1) Certification. Edit. MPAA: Rated R for language throughout, and for some sexuality/nudity: Certification: Australia:MA15+ Canada:14A (Ontario, British Columbia) Denmark:11 (DVD rating) Finland:K-12 (DVD rating) Germany Why is The Gambler rated R? The Gambler is rated R by the MPAA for language throughout, and for some sexuality/nudity. This additional information about the movie's content is taken from the notes of various Canadian Film Classification boards: Violence: - Portrayals of non-graphic violence. “Jeez, Axel, I never seen such bad cards,” Axel Freed’s friend tells him consolingly. They’re standing in the kitchen of a New York apartment, and gray dawn is seeping through the smoke. Axel has never seen such bad cards either. His disbelief that anyone could draw so many lousy poker hands in a row has led him finally $44,000 into debt. He doesn’t have the money, but it’s been a Rated R for horror violence and gore, and for language: Certification: Argentina:16; Australia:R18+ Colombia:15; Germany:18; Italy:VM14; Japan:R15+ Mexico:B15; New Zealand:R16; Philippines:R-13 ; Spain:18; Sweden:15; United Kingdom:18; United States:R (certificate #48581) Sex & Nudity. None 23 of 27 found this to have none. Severity? None 23 Mild 1 Moderate 0 Severe 3. We were unable to submit
Why is Deadpool being R-rated such a big deal? - YouTube
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![Compass Pathways [$CMPS] - Trusting Peter Thiel With My Psychedelics Bet](https://a.thumbs.redditmedia.com/NRldFqpIRrXOqAO0-69q2nFOfgXrsrDbP0g9yPUUzm0.jpg "Compass Pathways [$CMPS] - Trusting Peter Thiel With My Psychedelics Bet")
