Thanks for your input. A couple follow-up questions though.
Why would the price on the low valued puts go way up though? Is it now, after the squeeze, MORE likely that GME goes bankrupt? And even Hertz, which is _literally bankrupt_ is still selling for more than a dollar a share, so the stock price could remain untethered from realities for a long time.
And why can't they just do some share dilution to raise capital?
Volatility is driving all options up, puts or calls. I have a deep in the money put (not as deep as those, it's at $25) that is up over 100% since last week. Too bad I didn't buy a call, too. I figured it was going to come back down quickly. Maybe in March.
Issuing new shares would let them raise capital, but then they have to do something with that capital. I don’t think they have much of a future so unless they have a CEO can both run GameStop and build something new on the side, he wouldn’t be helping anyone. Assuming the market feels the same way, the share price would fall a lot before the issue. Or he’d be taking money from WSB and wasting it on some doomed revitalisation.
Innovating while running a mature business is one of the most difficult things for companies and few succeed. Even Google mostly buy innovation rather than trying to do internally.
Models all use the volatility to guesstimate outcomes. More volatility means more value in an option. Look at it this way: if a stock is at 10$ and the vol is +/-1$ A day, you only need 5 down days for a 5$ option to be in the money. If the same stock shoots to 50$ over 2days, the vol is now +/-20$ a day (because it shot up at that rate). So you only need 2.5 down days and that 5$ put is in the money.
That’s effectively how the model “sees” GME.
I’d tend to agree that it doesn’t make much sense for the price to have changed given these circumstances. I think that’s an artefact of the model. To be fair, the model relies on volatility being relatively constant AND it being bidirectional (prices go up or down randomly). You can’t really use a model like this to price options on an underlying like GME.
This is where the skill comes in: you don’t just need to obey the model, you need to look at the market, decide it won’t stay this volatile, adjust you vol figure down and trade based on the new model price it gives you and hope the market comes to you before you go bankrupt!
But that takes insight and you have to actively manage the risk that creates if you’re working at volume.
If you’re willing to take that risk and you think GME will quite down, you can short some puts. That would limit your downside to volume*strike price. But you have to accept your eating some risk.
Personally I’d say GME options are not meaningfully modelable right now and you can make good money in disfunctional markets. I keep some cash for this sort of speculation myself. But I only gamble what I can afford to lose and I don’t kid myself I’m Investing.
I’m cash poor right now (covid and no job) otherwise I’d be tempted to try this tbh.
To be clear, I’m not an expert and this isn’t financial advice. I just did software support for a convertible bond desk for a year so I learned enough to hurt myself!
Not to take away from your main point, but the capitalized total cost of ownership for a pony is _much_ larger than $1000 (which, by the way, is the price for a not-very-good-natured pony; breeds with nice temperaments cost a lot more according to https://pets.costhelper.com/pony.html ).
Doing some quick checking, food for a pony is ~$1-2k per year. Lodging is $2-3k per year. Basic preventative veterinary care is $1k per year; if the pony gets old this could get a lot more.
That's $4-6k a year for upkeep, and ponies live for 20+ years. So the actual cost of a pony, even with discounting and whatnot for future dollars, is probably at least $50k, not $1k.
If you really think through the implications of every individual in America owning a pony, it gets a lot more interesting than that! It means that everyone in every city would own a pony -- would that mean that perhaps a proxy ownership situation would occur, where you had a certificate of pony ownership, but the pony would be housed and maintained anywhere in the country that could do so cheapest? It would cost a lot more than 2-3k/year to house a pony in NYC! Let alone the sudden demand for housing about 5 million of them...
My guess is that these ponies would be kept in horrible conditions similar to the way domesticated cattle are raised for milk and meat. I would hazard that all of our assumptions about the actual price of ponies and maintenance would come down if we all needed to have a pony, and would come down by a LOT.
Of the books I've read this year, there are a small handful that I think are beyond good.
Antifragile: This book has informed many decisions I have made recently. It is insightful, entertaining, and in its concern for human choices manages to send a beautiful message about nature and reality.
The Power Broker: I listened to this via audiobook and I highly recommend the experience. It's a large dose of history and a fascinating exploration of city politics and, as its name implies, power. And I learned a lot about New York!
Lonesome Dove: I hadn't read any fictional "westerns" and this came well recommended. I loved it. Listening to it while backpacking and on a road trip was extremely rewarding.
Man's Search For Meaning: Extremely powerful and potentially life changing. It was both cathartic and therapeutic for me, and has affected how I live my life.
The Lathe of Heaven: Incredibly enjoyable dystopian future fiction. It came recommended via the "HN reading list" released some number of months ago, and I liked it a lot.
The Fellowship of the Ring: I had started this book in high school but hadn't finished it for some reason. I picked it up again, and I'm glad I did. It is a gem, and there's good reason that it has become a part of our cultural bedrock. Its exploration of purpose, challenge, and choice is quite moving.
"You've got to keep making decisions, even if they're wrong decisions. If you don't make decisions you're stuffed"
- Joe Simpson, (Touching the Void)
Making a good decision quickly is often better than any other option -- waiting too long may make all options worse.
Make decisions based on clear goals, and attempt to record the reason for making a decision at the time of decisionmaking
Always consider opportunity cost.
Always take individual incentives into account.
Be open-minded, give ample room to disprove your preconceptions.
Take into account your cognitive biases when you can, and reduce them as much as possible
- loss aversion
- sunk cost
- inclination to maintain status quo
- avoiding ambiguous options
- tendency to do things based on many others doing the same
Consider others' feelings, and how their feelings will affect you and others.
Do not assume optimal future behavior of participants, especially yourself.
- do not overcommit your future time.
Do not assume poor future behavior of participants, especially yourself
- especially when depressed, it is easy to be pessimistic about your future behavior
Do not seek information when it will not affect action
Avoid over-relying on familiar tools and methods
- consider and value alternate approaches
- "If all you have is a hammer..."
Avoid overconfidence
Just because someone is in conflict with you doesn't mean their idea isn't good
Do not give disproportionate weight to trivial issues:
- "bikeshedding"
Orient towards reality
- establish a baseline understand of reality before moving toward solutions
Learn, THEN decide.
- am I done learning?
- have I learned enough to make a decision?
Consider postponing decisions until the last possible moment
- at which point you will have the most information with which to make the decision
Consider doing the simplest thing that could possibly work
When encountering hard problems, dissolve them into smaller pieces and identify the success criteria, immediately, before trying to generate solutions.
Although I think you're trying to use these examples to highlight that regulation can indeed be valuable (and to insinuate that such an idea should be obvious to anyone), I think that even these examples have subtlety. See the following article for an interesting exploration of how building regulations contribute substantially to urban blight in America: https://granolashotgun.com/2017/11/13/mind-the-gap-2/
Thanks for clarifying that here -- it took some close reading to understand that. With an otherwise nicely detailed account, the mislabelling of the axes is jarring. I would definitely expect a positive number to correlate to more sleep deprivation, if the axis is labelled "Sleep Deprivation" or any variant thereof.
Homeopathy and 3% of a standard dose of one of world's strongest drugs are very very different things.
Even setting aside the massive, proven, perceptual effect that placebos have -- which means that if you do believe in homeopathy, it could actually have a strong effect -- this is analogous to saying that a couple of sips of beer is going to do "jack shit". It won't do much -- but your liver will still process it, and it will provide some energy, and it will have a very mild affect on your nervous system. Is a couple of sips of beer an "active dose"? What's an active dose here?
In contrast with homeopathic solutions, which are diluted down to figures like 1 PPM (presumably a very very low % of what would be an "active dose" of its chemical), this is a 3% dose we're talking about! It's intellectually dishonest to assert that there would not be an effect on the nervous system at that level, and it is a strange position to assume that because the effect on the nervous system does not rise to obvious perception, that it has no effect on the experience of the subject.
Beer commonly comes in 8oz cans. 8oz is about 237mL, 3% of which is about 7mL. I would absolutely say that 7mL of beer is going to do jack shit.
The experience of the subject is linked directly to obvious perception. If it isn't affecting perception, it's not affecting experience! It could affect other things, like your liver or whatever, but it really does need to affect your perception in order to have the benefits people claim microdosing has, which are all linked to moment-to-moment experience.
I was basing my analogy on the idea that a standard dose of beer, for someone drinking beer, is probably 2 12 oz. bottles of beer.
"If it isn't affecting perception, it's not affecting experience!" I think this is the main point on which we disagree. I'm curious why you assert this so strongly.
If we agree that there is an effect on the nervous system, then the question is, at what point does that effect "matter". And you are saying that it only matters at the point that the subject can detect the shift in their own perception from baseline. You also argue that any purported benefits of the substance are only realized as a result of the detection in this change of state.
I can think of a few examples of cases where we would not be consciously aware of a change from baseline, but would effect our experience. Do you need to be aware of your change from baseline for the painkilling and pleasantness of endorphins released after a mild walk to have an effect? Do you need to be aware of your own difference from psychological baseline for the little bit adrenaline released before an important meeting to have an effect on your alertness?
Our recognition of our own perception is a fallible signal detector. There can be effects on the nervous system that have effects on other systems, regardless of whether the conscious mind detects a signal.
And if you agree with me so far, then the question is if the effect on the nervous system and in turn its effects on other internal systems has any therapeutic effect. That's a different discussion, I reckon. But unless a requirement of all the purported therapeutic effect is that the subject has consciously observed their altered perception, then it is possible for there to be an effect on people's lives from sub-perceptual doses of chemicals. (for example: non-psychoactive drugs, heavy metals, viruses, etc.)
From an engineering perspective, building a remote-first team was an easy decision to make after a brief attempt to hire local talent.
Some of the unexpected benefits, in addition to the obvious upsides of better talent for the same money, an easier time finding them, and better retention:
Documentation gets really good.
Discussions frequently have a written artifact associated with them, which allows for easy reference later on. (e.g. asana thread, slack discussion)
No open office problems. The dreaded shoulder tap is not a thing.
We have to be clearer and more deliberate about the communication channels we use and the reason we use, and when and how we choose to do so. This is a good thing! We use a mix of Slack, Mumble, email, asana, Zoom, and 1:1 video calls.
Our culture is less driven by force of personality than it may otherwise be. Having a strong leader in the room can be a powerful multiplier. On the other hand, remote teams can lead to a more subtle and thoughtful type of leadership, with more of a focus on the team as a system than as a troop. This is frequently a good thing! Also, if someone important is having a bad day, there is less of a transitive effect on the team.
Our automated dev tooling got better. (Since futzing around with other people's computer has a higher barrier, code that does stuff like setting up a vagrant box on dev machines becomes more valuable. So we keep it in good repair, and if something about it doesn't work, we fix it right when the problem comes up!)
The above extends to all code: when your code may break other people's builds, and you won't be physically around to make it right, I think people put in a little extra elbow grease and, for example, write one more test than they may have otherwise.
Our systems for code review are naturally a lot more in line with some of the compliance requirements we have. All of our code goes into a PR for code review, and many of our clients need that as part of a comprehensive set of data protection and security requirements.
Our automated testing via CI got better. Would it have gotten better without being remote? Probably. But tests are a great method of communicating about code, and so we started caring more about them.
Team get-togethers become exciting due to their infrequency!
Even beyond all these rational productivity-based arguments, it just feels more natural and humanistic. Makes it easier to spend time with your kids! To travel to your dream destination and spend time working from there, as more than just a tourist! To settle down exactly where you want, with the continuity of your same team and job and project. No commute if you don't want one! Less of a second-circuit driven environment! (as defined by https://en.wikipedia.org/wiki/Eight-circuit_model_of_conscio...)
Hit me up if you're looking into adding remote work into your organization, especially if you're early in the process. Let me try to help convince you!
Why would the price on the low valued puts go way up though? Is it now, after the squeeze, MORE likely that GME goes bankrupt? And even Hertz, which is _literally bankrupt_ is still selling for more than a dollar a share, so the stock price could remain untethered from realities for a long time.
And why can't they just do some share dilution to raise capital?