EDIT: Also GME is at 240, it's not even a short squeeze anymore it's just bizarre
I'm not sure how this is different from say bitcoin, where I've heard estimates of "100k by the end of the year" since 2016
Before anyone claims it’s the same for stocks: It’s not. Stocks are an actual claim on underlying businesses, their cash flows, IP, and their assets. Bitcoin’s attraction is that it has no underlying fundamentals to compare against, so proponents can say it’s going to whatever price they want and no one can point out how silly that is. As long as people continue buying, the price goes up. Why are people buying? Because the price goes up.
This is not true.
If you buy a share of GOOG, you have zero claim on any of Alphabet's cash flows or assets.
The company doesn't pay a dividend and doesn't expect to pay a dividend in the future. So there's no income potential.
There is no scenario under which you can convert your share into any of the company's intellectual property or physical assets.
Your share doesn't even give you the right to vote on anything.
There is only one thing you can do with your share, and that's sell it to someone else.
So the only conceivable purpose in buying GOOG stock is the hope you can sell it to someone else for more than you paid.
https://www.wsj.com/articles/bitcoin-to-come-to-america-s-ol...
https://www.bloomberg.com/news/articles/2021-02-25/investors...
Still is. GME was $2.50-$20 across years. Now it's magically $239 (up 22% as I write this); up ~500% in ten trading sessions or so. It's a twisted joke on a whole lot of amateur investors that think they'll be the ones to successfully navigate the pump & dump and get out before it crumbles. The party will no doubt continue until the music stops (treasury yields rise too high).
I'm not aware of any long-term meme-stock trading "strategies" being peddled around - it's pretty clear that it's mostly gambling and people are simply making one-off bets.
On the other hand, the various "trading" schemes (whether Forex or crypto or binary options) typically rely on the promise of long-term, sustained profits, buying various courses or trading tools and referring other people to it.
Yes it does. The entire WSB narrative encourages everyone to buy more GME and never sell it. They’re not doing this as a favor to readers. They’re doing it because encouraging others to buy and hold is what drives the price up. Their “mother of all short squeezes” theory doesn’t match reality at all.
I have never seen a more lucrative spread market.
Every time these diamond handers have this thing range bound for a few days, spread traders are making like how many percent? A hundreds?
Sure these occasional blow offs can wreck the position, but its limited risk.
GME doesn’t issue dividends and they will need to sell stock to change course, this requires even more new investors than now to perpetuate.
There is an arbitrary distinction between pyramid schemes and respected financial realities. It isn’t really useful to draw the line, just play the game or don’t.
The common say is that most car driver believes they are above average. ¯\_(ツ)_/¯
The same is true for state lotteries and other forms of gambling, but many people continue to participate.
I think of it like buying useless items too. "The state of anticipating and desiring a product may be inherently more pleasurable than product ownership itself." [0] This is very similar to gambling where you are essentially paying for the opportunity to feel hope.
[0] https://www.theatlantic.com/health/archive/2013/01/study-wan...
I don't know about the US.
The early adopters are also generally equally fervent in supporting the scam and believing "it will work in the end".
For example, Finland, one of the top performers in Pisa scores had a famous scam using -yes - foreign exchange trading as it's angle "https://en.wikipedia.org/wiki/WinCapita
Of course at some point you run out of customers and it collapses, but there are a lot of people in the world who are interested in getting rich off trading.
I think people have recognized that MLMs, pyramid schemes, and Ponzi schemes are lucrative for early adopters and those at the top. Instead of avoiding the scheme altogether, they’re racing to cash in early before it collapses. It’s a gamble that they’ll be on the right side of the trade before it runs out of steam. The power of “but what if it works...”
Some of the more blatant Ponzi schemes operate in the open for years in developing countries. There can even be public outrage when governments try to intervene because so much of the population is invested in these schemes in one way or another. A good example is MMM global: https://en.wikipedia.org/wiki/MMM_Global