Stock market tips and experiences

[TboneS54]

We're gonna have to find a way to stop the uneducated masses from creating market volatility like this.

That said, I like this stock.

[Cyberdemon]

Originally Posted by vreihen16

Finally, an explanation for the tinfoil hat conspiracy folks...

https://finance.yahoo.com/news/webul...195711214.html

Apex came up earlier in the day - Etrade announced they are restricting GME and AMC purchases for tomorrow. So if one clearinghouse opens and another broker shuts down, is it just a case of chasing around the clog in the pipe?

Seems like as long as some section of the market is being throttled the same output will be expected.

See ya'll for the fireworks tomorrow.

[TboneS54]

Buckle up

[XKxRome0ox]

Originally Posted by Noneya

I think this post can be summarized as "I love gambling, and hate it when my gambles don't pay off. Waaah."

keep licking the boots of the billionaires who profit by destroying the economy
short selling beyond the available number of shares is what is causing this


my resolve is even stronger now
glad i was able to buy some more today with my newly opened Chase account
(their platform sucks but at least they don't restrict anything)
holding through the weekend

when the dust settles
we either put a little dent in the short sellers and humble them
or we blow up our accounts in a spectacular fashion


and i'm moving everything out of Robinhood

[vreihen16]

Originally Posted by XKxRome0ox

when the dust settles
we either put a little dent in the short sellers and humble them
or we blow up our accounts in a spectacular fashion

...or get labeled as "economic terrorists" and have to live in caves for the rest of our lives.....

[ptper]

Question: Not a sophisticated investor, but wanna support the 'movement'. ha. I only wanna put in $1k (all I'm authorized ). I've heard call options may allow me lever up over an outright purchase. Can somebody give me layman explanation of what I need to do?

[overcoil]

Originally Posted by ptper

Question: Not a sophisticated investor, but wanna support the 'movement'. ha. I only wanna put in $1k (all I'm authorized ). I've heard call options may allow me lever up over an outright purchase. Can somebody give me layman explanation of what I need to do?

check out OPTIONS PLAY videos on YouTube.

[JJ 911SC]

Probably been mention before but worth being repeated;

Buy Low, Sell High is the key for a successful retirement life

[kscarrol]

Having been an active investor for decades and in the business for two decades, threads like this have me increasing my cash position significantly. Absolutely nothing wrong with folks trading stocks and trading ideas online but I've seen this kind of activity before and it usually doesn't end well... just my $0.02

And let me say I am not a fan of shorting stocks, never done it personally and never will but if you step back and rationally look at GME's business, it is a dinosaur heading toward extinction. That reality is inescapable. Can traders punish the shorts in the short-term, absolutely. But at some point fundamentals matter. What can the company earn? Can it grow those earnings? I don't know when that time will come but when it does it will happen fast, the music will stop and a lot folks will left standing without a chair... or their money.

[bimmer pleaser V2]

Originally Posted by kscarrol

Having been an active investor for decades and in the business for two decades, threads like this have me increasing my cash position significantly. Absolutely nothing wrong with folks trading stocks and trading ideas online but I've seen this kind of activity before and it usually doesn't end well... just my $0.02

And let me say I am not a fan of shorting stocks, never done it personally and never will but if you step back and rationally look at GME's business, it is a dinosaur heading toward extinction. That reality is inescapable. Can traders punish the shorts in the short-term, absolutely. But at some point fundamentals matter. What can the company earn? Can it grow those earnings? I don't know when that time will come but when it does it will happen fast, the music will stop and a lot folks will left standing without a chair... or their money.

yeah pal nobody in their right mind is claiming GME is worth $300. The point is: it is not Redditors' job/goal to appraise a stock and invest accordingly to keep its price at a reasonable level; their goal is to make money by punishing the fat cats who have been setting the rules, and beating them at their own game.

I invite you to go that forum and read what they have to say. A lot of them are kids of 2006 to 2009 era when at some point we were losing 800000 jobs per month, US auto makers about to go bankrupt, massive insurance companies getting demolished... A lot of hurt and pain. They watched their parents lose their jobs, homes, cars, getting divorced and some never got back on their feet again ... meanwhile financial execs who created this mess got their tax payers funded bonuses and lived happily ever after. I remember it too; not too bad though, I was unemployed for a couple of weeks and then got another job and it actually worked out better on the long run.

But yeah in summary:

1. it is not the little guy's job to make sure a stock is traded at its actual value.
   
2. it is about punishing the crooked gas bags on Wall Street.

P.S. shorting is actually not all that bad. it has its legit benefits if used responsibly. It is a good hedging tool if you feel good about a stock and want to invest but also want protect your investment. But those hyenas shorting 120% of GME total shares (how the fk is that even possible) need to pay for it, at least this one time.

[kscarrol]

Okay pal, I hear ya...

And I never said shorting was bad, simply said I’m not a fan of it and don’t short stocks.

[NorCalAthlete]

Could have sworn I already posted this but for those still questioning whether Gamestop will even be around in another month after the dust settles here, give this a read and see if it doesn't at least plant a seed of doubt in that viewpoint.

https://www.reddit.com/r/wallstreetb...ective_on_gme/

A Venture Capital Perspective on GME
OCDD

Hi everyone. Long time WSB lurker and I've learned a lot here, so I'd like to give back and hopefully add some value to this sub. I think it’s worth spending a little time laying out my thoughts on why I’m investing in GME as an active early stage VC, and hopefully my insights can help people not paperhand before the real gains are made. I'll try to provide new insights that I haven't seen on this subreddit yet.

Full disclaimer- this is my personal money I’m investing. Positions are 678 shares at a $39.81 average as a starter and looking to open a more significant position in the next few months once a few questions have been answered for me on things I’m looking to see (which I’ll discuss below).

Obligatory rockets: ����������������. If a few things happen, this goes to the moon regardless of a short squeeze. I'll explain why below.

First, a quick overview at how most VC's do due diligence.

How VC's Invest

When we do due diligence on early stage investments (our Fund is a pre-seed and seed Fund with a few Series A deals), there’s a few things we look for, especially when evaluating growth companies in tech are as follows:

What’s the market size? There are three types of market sizes investors look at; TAM, SAM and SOM. Feel free to look up how sizing these markets works if you aren't familiar, this is a long post so I won't waste people's time. The important thing to remember here is that the larger the TAM, the more room for growth and competition and the more interest there is to invest in a space. This is very important for GME and we will come back to why later.

What's the CAGR? (Compound Annual Growth Rate). Basically, is the market expanding or shrinking, and how fast. Again, google this if not familiar.

Experience of the management team- have they actually been there before and demonstrated an ability to scale and exit a company in this space?

Unit economics- do the numbers make sense as this company grows? Is it actually going to be profitable? Every firm looks at these different. We look at CAC/LTV ratios and doubling time with tech companies. The TLDR of this is "how much money does it cost me to get a new customer, how long will they be my customer before they leave, how much money will they spend while they are my customer, and how fast can I double the money I spent on advertising to get that new customer ".

There are a lot more things that obviously go into determining whether something is a good investment or not, but if there are red flags in any of these core areas a tech company is almost always uninvestable.

Now onto why after recent developments I think GME is shaping up to be one of the most attractive investment opportunities that investors have seen in these markets in years, but why many of you will miss out on the majority of the gains long term.

1 and 2) Market size and CAGR. As a gamer myself in spare time and a tech investor this is a market that hasn't even scratched the surface of how large it will get. Gaming is a market worth hundreds of billions, with an explosive CAGR as more young people grow up with gaming being a socially accepted activity and in many people's lives the center of their social experience. Most of you are familiar with this already, so nothing more to be said here.

Now the question in the past was, is Gamestop capable of growing their share of this market? Until Ryan Cohen, the answer was no (and this is why the share price went down to where it was). Again, you all know this. But this leads to the second point of why it is now an attractive option

2) Ryan Cohen. Not from an "excited about a memeing CEO" perspective, but from the most important thing to institutional investors- does he have a proven track record scaling and exiting profitable e-commerce businesses? Yes he does.

Again, you all know all this and it is how the stock price got to here today. Everyone is sitting waiting and watching to see if there is a short squeeze (myself included), and there is a lot of hype and excitement.

But this is leading everyone to miss the forest for the trees because of the 4th point:

GME's Unit Economics have the potential to be best in industry, yet shares are priced at an extreme discount to revenues currently.

I'd encourage everyone to check out this article talking about how companies with strong growth are normally priced by tech investors by one of the A16z partner. https://a16z.com/2020/08/17/role-of-...in-valuations/ The article is titled "why entry multiples don't matter" and helps entrepreneurs understand how valuations of companies can make sense for tech investors.

The short of it is for all the WSBers who can't read: if you have more growth, you get a higher multiple because you will have the potential to produce far more dividends faster, especially in high margin tech companies.

So what is fascinating about GME?

If I was presented a new company that had just driven it's e-commerce revenues 300%!!!!! YoY, operating in a several hundred billion TAM, backed by investors and management who had grown a company in the same vertical to hundreds of millions in annual subscription revenue, and with a strong balance sheet and distribution footprint and a widely recognized brand, 20x topline revenue in the early stages would be considered a steal to invest at.

Instead, GME is priced at a $2.8B market cap, less than half of annual revenues.

This is an unheard of valuation for a growth company to be trading at a discount.

So why is GME underpriced, and why did so many people (myself included) not see or continue to not see this opportunity until now? If it's such a good opportunity, why are shares so cheap?

Most investors are looking at the legacy Gamestop business that has existed for the past decade instead of treating GME like a new startup (CHEWY for Gaming).

If Ryan Cohen can transform GME into a subscription-based membership model where in exchange for your monthly fee you have a one stop shop to all things gaming discounted, you have a company that could easily be valued at a 10-30x multiple on top-line revenues. However, because most investors outside of this subreddit still view it as a traditional brick and mortar play vs. a subscription focused tech company with omnichannel growth strategies, they think a bubble is forming and are shorting it instead of buying in.

So why am I not all in yet but why am I excited?

The most important thing yet to be understood is what does the customer value proposition look like under the new direction Ryan Cohen takes GME. Most large investors will be waiting to see how over the next year the balance sheet is strengthened for growth, what new revenue models can be implemented, and to see if there has been a true pivot from brick and mortar.

This is a company that if management can execute on correctly, most large institutional investors will be clamoring to get a significant stake in and grow it because the gaming market is here to stay and grow. Bear arguments that digital game sales will hurt GME miss the entire point of the pivot. Ryan understands this and wants to instead bring the whole gaming experience in house- everything you buy you want to buy from GME because you're part of their membership program (again think Costco). Those programs are insanely profitable and if the unit economics show that to investors as the company pivots the valuation will soar immediately as people realize it's Amazon Prime, not Blockbuster. However, it is yet to be seen if they can execute on this vision, which is why I am not all in yet.

There is still long term risk which is why this stock is still low. Not a lot but there is some.

Maybe the company doesn't grow? Maybe they reject Ryan's vision?

But here's the bottom line.

If a shift to digital first does occur, and GME becomes a subscription first omnichannel gaming company, the market cap will conservatively be 10x topline revenues.

Let's say that stays flat next year at $5B.

This market cap (matching industry standards) should for an appropriate valuation for a growth stock be $50B.

I know this sounds insane. But if Ryan can complete the transformation he is hoping for this is a very conservative valuation.

A $50B market cap would be $800 a share right now. Again, this assumes Zero topline revenue growth. If revenue begins to grow again 10x will be unrealistic and the multiples will get far higher.

This is why the short squeeze is distracting many. In 5 years if you diamond hands this company, the fair value of shares can range from $800-$2400 and not be in any sort of bubble or unjustified by fundamentals speculation.

TLDR; this company if Ryan does what we believe he will may be one of the most undervalued companies this subreddit has ever discovered. Even if you take profits in a short squeeze, don't forget to keep shares for a long position because opportunities like this rarely come around. I imagine the short squeeze will allow them to issue more shares to strengthen the balance sheet, and the company has a fantastic launch pad to start from with the size of it's existing customer base, brand awareness, and revenue. If it becomes clear that GME will be executing on Ryan's vision even at a $10B market cap this will be a steal and I will open a full position then. I am waiting to expand my position to see what happens with the pivot, as this all goes out the window if GME rejects his strategy.

As always, do your own DD but I have learned a lot about options from this sub and hopefully this helps a few people understand why selling shares may end up being the biggest regret of their life. GME's business model has the potential to look just like Amazon's with a focus on the gaming industry and these shares are only at this price because the market is still looking at the old company and not the new startup that GME could become.

Don't paper hand this one.

[kanovic]

Ride the doge waveeeee

[roastbeef]

What's the bast way to buy doge?

[FastF30]

I literally just made 10g in 10 minutes off of dogecoin.... me personally don't think it's gonna hold price... sold at .077..... I should of known better when my buddy called me asking how to buy dogecoin... when he knows... I should of known there is going to be fomo buying.... lol.... so I waited a little bit dang it...still not bad for not expecting to make that much so quick.... lesson learned... lol.... so hmmmm should I get that turbo upgrade now.... lol....

I usually wait for the daily high on BTC and then ride the whales tail down....major traders sell big qty quick to lower price and then buy back quick to make profit... usually good for a g or 2.... I totally forgot about tonight cause of doge.... lol....

[premier3is]

Originally Posted by kscarrol

Having been an active investor for decades and in the business for two decades, threads like this have me increasing my cash position significantly. Absolutely nothing wrong with folks trading stocks and trading ideas online but I've seen this kind of activity before and it usually doesn't end well... just my $0.02

And let me say I am not a fan of shorting stocks, never done it personally and never will but if you step back and rationally look at GME's business, it is a dinosaur heading toward extinction. That reality is inescapable. Can traders punish the shorts in the short-term, absolutely. But at some point fundamentals matter. What can the company earn? Can it grow those earnings? I don't know when that time will come but when it does it will happen fast, the music will stop and a lot folks will left standing without a chair... or their money.

Imagine increasing your cash position during one of the biggest historic bull markets ever

Enjoy your 0.01% savings interest lol

[premier3is]

Originally Posted by Noneya

I think this post can be summarized as "I love gambling, and hate it when my gambles don't pay off. Waaah."

This has got to be the dumbest post I've seen today.

If you think what the brokers did today was legal to stop the purchasing of stocks with your OWN money, you're licking billionaire asses for sure.

[FastF30]

Originally Posted by premier3is

If you think what the brokers did today was legal to stop the purchasing of stocks with your OWN money, you're licking billionaire asses for sure.

Little harsh... but totally agree... stocks suck IMO... crypto trading is where it's at... don't get me wrong.... I only play with 3% net worth... my wife keeps track of all the other investments.... S&P 500 ETF if your just a normal investor... best basic return 10-15% .... remember at 7% compounding interest it will take 10 years to double your money... real estate is too much headache IMO... taxes.. upkeep... tenants not paying.. etc ...etc... only thing I can say is good luck to us all with all this printing going on... don't be surprised if stks crash end of year... once the printing stops... be very very wary.... how will btc hold up when that happens... I plan on selling before it... cash is king as shown when the pandemic hit... will be a good time to invest then.... buy the fear... sell the glory....

[FastF30]

Lol... see... BTC flat lined at 34k and dropped a G... I'm hoping it goes down more with the aggressive American Whale Traders tomorrow/ today... then I'll buy some more.... lol... to easy..

Don't get me wrong... you better know how to read graphs and know the signals... you can lose a lot of money real quick if you don't have proper risk management in place... don't ask me how I know... lol... learned the hard way when I started... lol...

[XKxRome0ox]

Originally Posted by ptper

Question: Not a sophisticated investor, but wanna support the 'movement'. ha. I only wanna put in $1k (all I'm authorized ). I've heard call options may allow me lever up over an outright purchase. Can somebody give me layman explanation of what I need to do?

If this is your first rodeo, I don't think an option play on GME is the way to get your feet wet

But if you do... Good luck

[2000cs]

Originally Posted by premier3is

Imagine increasing your cash position during one of the biggest historic bull markets ever

Enjoy your 0.01% savings interest lol

Your comment works right up to the point where it doesn’t, which is how bull markets end. Froth in the market, and fools rushing in, are good indicators of a near-top. That doesn’t mean every stock will fall, but some correction may be in the works shortly.

A little risk management is always a good idea, and one should never invest in any asset beyond their own risk tolerance. Taking money out of risk assets as risks rise seems prudent. Judging that is an art.

[TheFanatic]

Originally Posted by FastF30

I literally just made 10g in 10 minutes off of dogecoin.... me personally don't think it's gonna hold price... sold at .077..... I should of known better when my buddy called me asking how to buy dogecoin... when he knows... I should of known there is going to be fomo buying.... lol.... so I waited a little bit dang it...still not bad for not expecting to make that much so quick.... lesson learned... lol.... so hmmmm should I get that turbo upgrade now.... lol....

I usually wait for the daily high on BTC and then ride the whales tail down....major traders sell big qty quick to lower price and then buy back quick to make profit... usually good for a g or 2.... I totally forgot about tonight cause of doge.... lol....

binance crashed hard for hours due to all the demand on their site. you backed out at the right time .077 was as high as it got. We may see another rise again once people get out of bed after giving up with the website being down.

I could have rode the wave up from .02 but it took over 4 hours just to log in and by that point it was pushing .068 and I held off for the night