https://en.wikipedia.org/wiki/Veblen_good
You didn't break economics with your "why are luxury goods so expensive even though they're not better" argument, unfortunately.
> You didn't break economics with your "why are luxury goods so expensive even though they're not better" argument, unfortunately.
I do not see (a) where my claims imply breaking any economics principles, and (b) did not claim they're not better. As someone with an engineering degree I was taught all about trade-offs in design. Different situations may call for a need for different characteristics of a design: one person's situation may call for VW (simple commuting) while another's a Porsche (dealing with a mid-life crisis).
My point was that different items, which have different prices, have different value to different people. So to say what something is "worth" can be completely arbitrary, independent of price. Similarly, various people can find the same item "worth" differently, depending on what they value, so each is will to pay a different price: this is what auctions are all about after all.
In the case of GME: the people who actually care about the retail company may value it one way, and thus are willing to pay a particular price for each stock; while the people who care about fulfilling their (shorting) option contracts may have a different value and are wilting to pay a different price. What each stock is "worth" is different to each of them.
I think he's saying it's not manipulation, but simply a bet. If I buy GameStop at $100 believing I can sell it for $120 tomorrow, I am buying that stock honestly believing in its current value so I'm not sure you can call it manipulation any more than another investor hoping to cash in on an expectation that a stock will appreciate.
How do you decide whether or not something is manipulation? Everybody invests in stocks expecting them to go up - at what point is it nefarious?
In reality, many institutions are also long GME and capitalizing on the squeeze as well.
It's a pump-dump...which is illegal.
Does this mean investment firms are inherently manipulative, since they coordinate investments for their investors? They're doing the same thing - investing in bulk, hoping to catch the rising tide. When big investment firms and famous traders make announcements it affects the stock price too, you know.
I'm not trying to be obtuse. I just don't see how you can make an objective distinction.
I'd argue you could say everyone investing in TSLA is coordinating a pump-and-dump scheme as that stock is insanely overpriced as well.
There is a clear difference in TSLA. People were not coordinated. They have been investing because they believe the company will grow and the stock will appreciate long term.
GME is a bunch of people on reddit saying "guys if we all collectively buy, we can induce a short squeeze and artificially pump the stock price for a short period of time. Pour all your money in and diamond hand so we can get rich together." Then as it hits the mainstream, the smart people will cash out, and the dumb people will stay on the train and lose a ton of money.
You really don't see the difference?
It seems like both stocks are targets of manipulation to me.
I suggest you read up on shorting and pump-dumps. TSLA investors believe the company is changing the world and has enormous growth opportunity.
From my perspective, you're being willfully ignorant.
> You keep conveniently ignoring the short squeeze.
Are you honestly implying there is no short squeeze for TSLA? David Einhorn has written multiple articles on this very topic.
https://markets.businessinsider.com/news/stocks/david-einhor...
A forum with 2 million members advertised and coordinated a massive purchase of shares. Gamestop's market cap was less than $900m at the time. Gamestop was shorted at %140 of its float. There were daily posts describing how the forum has enough collective capital to hold a significant portion of the company.
None of that happened with Tesla. There isn't a community of millions all planning to buy Telsa at the same time for a 2 week period. Its not being championed as a noble cause for retail investors.
How are you okay with this happening? The people who actually get hurt are gullible uneducated poor people that were promised a way to get rich quick and stick it to the global elite. Do you feel no sympathy for the victims of this scheme or any other MLM/ponzi "greater fool" bullshit?
Hasn't Musk been fined -repeatedly- by the FTC for doing exactly that?
https://www.theguardian.com/technology/2018/oct/28/elon-musk...
It's okay to like Tesla but please don't spread lies.
He was fined for misleading investors not for coordinating a distributed group effort. Musk absolutely wanted to take Telsa private but was unable to and made an early announcement.
While I agree with your skepticism of the govt trying to stop "manipulation", what happens when this hits scale?
https://en.wikipedia.org/wiki/Albanian_Civil_War
At some point the music will stop and everyone hodling GME is going to lose their collective shirt. Everyone knows it. You can say "it's simply a bet", and you're right except for the simple part.
Anyone with half a brain should be able to recognize that GME moving from a 900m market cap to a 30b market cap in a few weeks is completely nonsensical.
Money is a made up thing. From another comment I made:
> Why is a Audi "worth" $60K but a VW "worth" $30K? A Porsche "worth" over $100K? Why is a Patek Philippe or A. Lange & Söhne Tourbillon watch worth $100K? Why should I pay $300 for one All-Clad pan when for the same price I can get a 10-piece set at Costco?
[…]
> And to go back to my first paragraph: a Porsche is not "worth" $100K to me—because I'm not willing to pay for it, or even for an Audi. But it may be "worth" it to someone else because they are willing to pay for it.
* https://news.ycombinator.com/item?id=25935968
It's a convenient fiction that allows for a complicated society to run relatively smoothly, but it's a fiction nonetheless when you get down to it (IMHO).