Re:The Battle of GameStop
by tootie on Tuesday January 26, 2021 @10:06AM
(#25916523)
Hedge funds earned their name by their ability to hedge. Professional risk takers can balance their portfolio by placing multiple bets where they can afford a few of them coming up empty because they only need one to hit big. A keyboard commando betting their 401k on one stock is running a much bigger risk.
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Given how hard Melvin Capital is going down right now, it doesn’t seem like they are all that good at the hedging bit. But sure, let’s pretend the big guys are insanely wise and all knowing and never play dirty.