News for hackers. Stuff that matters.
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by shakezula on Sunday October 11, 2020 @03:11AM (#24744229)
I’ve found that sub to be 99% idiots, 1% extremely knowledgeable finance experts who browse it to occasionally comment and laugh at the other 99%. It’s my absolute favorite subreddit to read. I consider it like an apolitical temperature gauge on things. There’s not really any politics in there, but it gets the commentary of the news through the lens of money and it’s always interesting.
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by kristopolous on Sunday October 11, 2020 @06:42AM (#24744890)
I was on some Facebook thread and some people were posting screenshots of how they lost 100% during the pandemic... Like $20,000 -> 0 in a matter of weeks. It was extraordinary. They were all using WSB and doing extremely foolish options trades.

Before seeing that I would have claimed basically any sincere strategy in good faith would be a winner right now. Clearly no, there's plenty of people who managed to burn through thousands in these conditions.

Really illustrates the difference between gambling and investing.

It's probably excellent advice to never look at WSB and regard it as 100% noise.

Randomly drawing letters out of a hat and buying those stocks would have produced dramatically better results.

Edit: i just bought a $100 or so of 4 stocks by randomly selecting letters until I got a match. Let's see how this strategy pans out. I bet it won't go to zero

Re:Reddit's Stock Threads Become a Must-Read on Wall Street by ReallyAnonymous on Sunday October 11, 2020 @08:31AM (#24745343)
Options trading is all or nothing. Yes, it's a way to multiply your profits, but it also multiplies your losses.

AAPL stock, from the release of the iPhone until now, has been an amazing investment.

Some amateur analysts would beat the professionals in predicting quarterly reports.

Then greed set in.

https://fortune.com/2013/03/04/the-rise-and-fall-of-andy-zak...

Just imagine if investors in his fund had just bought the stock instead of options (calls).

Similar situation as above.

Don't invest what you can't lose. Slow and steady and living below your means wins the race.

USA tax laws favor investment income over labor income. If no wage income, first $75k of qualified dividend income is federal tax free. Most qualified dividends pay 2-4% so you need $2 million dollars to get $6k post tax dollars a month.

Re:Reddit's Stock Threads Become a Must-Read on Wall Street by ReallyAnonymous on Sunday October 11, 2020 @09:13AM (#24745527)
didnt realize that link was behind paywall. It won't happen again.

Gist of the story is that an amateur law student was amazingly good at predicting AAPL earnings every quarter. Graduated, and started his own hedge fund.

Publicly advocated buying options because AAPL could only go up bc profits were increasing. That's also what he did with investors' money. Options expired worthless. All $$ lost.

AAPL price did not follow increase in earnings in straight line.

Re:Reddit's Stock Threads Become a Must-Read on Wall Street by JumpCrisscross on Sunday October 11, 2020 @07:27AM (#24745068)
> I would have claimed basically any sincere strategy in good faith would be a winner right now

Options have more degrees of freedom than stocks. Since they're derivatives, those degrees must ultimately collapse to the delta, i.e. to the stock's price movement, as the sole non-zero sum source of profit. As a result, there are more ways for professionals to monetize their edge.

Re:Reddit's Stock Threads Become a Must-Read on Wall Street by amelius on Sunday October 11, 2020 @07:51AM (#24745162)
The money that professional investors make has to come from somewhere. I guess a part of it is coming from these clueless people.
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by colinmhayes on Sunday October 11, 2020 @07:47PM (#24750112)
The stock market is not zero sum. The collectives market cap increases every year. Options are zero sum. There's someone at the other end of every trade and their gains/losses are your losses/gains. That's largely why I think of wsb style options as gambling as opposed to investing.
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by paulpauper on Sunday October 11, 2020 @07:45AM (#24745134)
I was on some Facebook thread and some people were posting screenshots of how they lost 100% during the pandemic... Like $20,000 -> 0 in a matter of weeks. It was extraordinary. They were all using WSB and doing extremely foolish options trades.

Right, but there are also traders who have made 10x or more. Many have turned a few thousand into 5 or 6 figures. You have to find the right strategies and traders to follow. There are traders who demonstrate skill, by consistently making profits. This involves optimal position sizing and optimal call option duration and strike prices and other factors such as momentum.

Re:Reddit's Stock Threads Become a Must-Read on Wall Street by timoth3y on Sunday October 11, 2020 @07:53AM (#24745173)
> There are traders who demonstrate skill, by consistently making profits

With a large enough group consistently making profits would not necessarily be a demonstration of skill. Even if the returns were completely random several traders would constantly perform well above average.

Re:Reddit's Stock Threads Become a Must-Read on Wall Street by levesque on Sunday October 11, 2020 @08:17AM (#24745284)
This is why this game is so dangerous. Also self reporting introduces bias too (biggest winners likely to report, everyone else not so much).
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by wgerard on Sunday October 11, 2020 @09:08AM (#24745509)
To be fair, I think WSB bucks this trend a little. People report the huge losses there, and it's part of what makes it so interesting.

In fact, I would argue that the most well-known posts are often from people losing huge amounts of money, eg. "Guh".

Re:Reddit's Stock Threads Become a Must-Read on Wall Street by WhompingWindows on Sunday October 11, 2020 @08:31AM (#24745344)
How do you differentiate those skillful traders from the lucky ones who somehow managed to beat the house despite being an amateur from WSB?
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by sokoloff on Sunday October 11, 2020 @09:35AM (#24745662)
IMO, the only reliable way is to watch them over a 50-plus-year period and look backward.
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by throw0101a on Sunday October 11, 2020 @09:46AM (#24745722)
> There’s not really any politics in there, but it gets the commentary of the news through the lens of money and it’s always interesting.

You may be interested in this 11 minute video of Ben Felix, of PWL Capital in Canada, entitled "US Elections vs. the Stock Market":

> With the upcoming United States presidential election, lots of investors are worried about how the election outcome will affect their investments. This is not a new worry - elections are stressful times and it seems obvious that the outcome should impact the stock market. Rhetoric from across the political spectrum certainly doesn’t help.

> Fortunately, the relationship between stock markets, elections, and political parties has been studied extensively, allowing us to step back from the rhetoric to consider the historical data and the theories that explain it.

* https://www.youtube.com/watch?v=HYHu9PMY_C4

There some interesting apolitical (peer-reviewed) papers linked in the description. It's all about time-varying risk aversion.

(No connection/relationship, just a fan of his.)

Re:Reddit's Stock Threads Become a Must-Read on Wall Street by atombender on Sunday October 11, 2020 @05:15PM (#24749163)
Also a fan of Ben Felix. He goes straight to the point, cites real research, and doesn't do any distracting comedy skit stuff (ahem, The Plain Bagel).
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by collyw on Sunday October 11, 2020 @06:54AM (#24744922)
Sounds like most of Reddit to be fair.
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by dharma1 on Sunday October 11, 2020 @05:16AM (#24744623)
Any picks for expert /u's worth following?
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by tupputuppu on Sunday October 11, 2020 @06:15AM (#24744810)
You want one from the idiots or one from the finance experts?
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by fedd on Sunday October 11, 2020 @06:21AM (#24744831)
That's an expert question
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by LilBytes on Sunday October 11, 2020 @09:00AM (#24745474)
Yes.
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by marketgod on Sunday October 11, 2020 @09:20PM (#24750593)
Me. TSLA and AAPL get in those until we get some signals in a few years.
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by kilroy123 on Sunday October 11, 2020 @06:07AM (#24744782)
Yup I've been lurking there for years. It was better before this year. Still a few gem comments but you gotta wade through the crap.
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by konschubert on Sunday October 11, 2020 @05:36AM (#24744691)
Plus people in there at pretty self-aware and it can be very funny.
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by LoathsLights on Sunday October 11, 2020 @02:03PM (#24747716)
It's 99% actual 12 year old who somehow managed to set up a robinhood account. Not even joking, if you read some of the comments in the threads you can just tell.
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by nurettin on Sunday October 11, 2020 @03:41AM (#24744318)
Sounds pretty much like any forum.
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by inglor_cz on Sunday October 11, 2020 @04:02AM (#24744376)
Weeelll... r/spacex has quite a lot of real engineers and overconfident opinionated amateurs get called out on details real quick.
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by dotancohen on Sunday October 11, 2020 @05:37AM (#24744695)
That's why I participate on r/spacex. I am free to post my KSP understanding of spaceflight and be corrected by real rocket scientists. Makes me feel smart _and_ learn, while spreading a minimum of disinformation. And most of the time, I learn things that I would not have even known to ask about.
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by neuronic on Sunday October 11, 2020 @06:48AM (#24744909)
As long as you don't spread disinformation with overconfidence you really just learn.

The problem with false information are the people who want to sell it as correct information for a variety of reasons.

Re:Reddit's Stock Threads Become a Must-Read on Wall Street by dotancohen on Sunday October 11, 2020 @08:28AM (#24745328)
I don't know why this was downvoted, you are correct.

I'm sure that I've posted some wrong things, but not disinformation. Nobody who is ever going to do anything with the information on that sub will ever rely on info posted there. The worst I've seen is some pseudo-news organization actually quoting a Reddit post on r/spacex without attribution. People who actually build rockets don't learn their craft from Reddit.

Re:Reddit's Stock Threads Become a Must-Read on Wall Street by paulpauper on Sunday October 11, 2020 @07:50AM (#24745155)
r/math and r/physics also have little tolerance for bs too
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by eru on Sunday October 11, 2020 @03:55AM (#24744357)
Many fora have more politics?
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by jb1991 on Sunday October 11, 2020 @04:38AM (#24744503)
I am a Reddit newbie but how could it be a subReddit if it’s on a different site?
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by ayewo on Sunday October 11, 2020 @04:47AM (#24744535)
/r/wallstreetbets or wallstreetbets both refer to the same subreddit at https://www.reddit.com/r/wallstreetbets/
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by purerandomness on Sunday October 11, 2020 @06:18AM (#24744823)
Topstonks (linked above) seems to be a news aggregator and also scrapes comments from some subreddits (They have a "see original") links near each scraped comment.

I also was confused at first.

Re:Reddit's Stock Threads Become a Must-Read on Wall Street by me_me_me on Monday October 12, 2020 @08:55AM (#24753902)
Reddit is a composite of many subreddits.

Each subreddit is oriented around specific or a broad topic, a theme.

There is a subreddit for anything you can think of, some very niche subreddits are excellent sources of information.

Re:Reddit's Stock Threads Become a Must-Read on Wall Street by jb1991 on Monday October 12, 2020 @10:24AM (#24754616)
I understand all of that. My question was about something different: how subreddits could be different websites. It was answered by the sibling commenters.
Re:Reddit's Stock Threads Become a Must-Read on Wall Street by huseyinkeles on Sunday October 11, 2020 @04:43AM (#24744527)
They are talking about wallstreetbets subreddit

https://www.reddit.com/r/wallstreetbets/

Re:Reddit's Stock Threads Become a Must-Read on Wall Street by will0 on Sunday October 11, 2020 @04:42AM (#24744517)
They're referring to /r/wallstreetbets