@StanphylCap touches on a larger issue that I've mentioned in the past .... the idea that risk of potentially negative events are "priced into" the markets. In my experience, negative catalysts are rarely priced into the markets. Rather, markets often ignore risk. A thread /1

https://twitter.com/StanphylCap/status/1665178941194219522

In 2014 my first big profitable trade was shorting/buying puts on $TWTR ahead of its lockup expiration. It was clear that there was potentially massive supply coming into the market. However, tons of people told me that, since the event was known, it was "priced in." /2

In some recent threads I addressed some retail "bogeymen" myths regarding SI and FTD's and how they aren't predictive of short squeezes and aren't important variables to consider whether you're in a high probability trade. Let's now consider cost-to-borrow (CTB) /1 I've seen threads where retail will point out a high CTB for a stock and consider that as evidence that a short squeeze could be imminent. I've seen people post charts showing correlations between CTB and strong upward squeeze-induced movements. /2

A common retail myth that is perpetuated on social media, Reddit, WSB, Twitter, and other places is that high short interest and Failures to Deliver will lead to massive short squeezes. This is simply false, and misleads retail investors into becoming bagholders. A thread ... /1 The problem with this idea is that high short interest alone is insufficient to "squeeze" a stock. For a stock to experience a significant short squeeze, shorts need to be in a disadvantaged position. They need to be "trapped." /2

A must-read thread on important lessons for retail and newbies who fall for a lot of myths surrounding stocks, particularly retail-heavy meme stocks like $AMC $GME $RDBX $REV etc...if you're retail, then read this /1 1. Shorts can't drive a company into bankruptcy, no more than longs can drive a company into profitability. Bankruptcy is when a company becomes insolvent due to its debt/obligations dramatically exceeding its income/assets. Shorts have zero impact on this /2

Imagine a poker game. Imagine all the players putting their money in the pot, but only one player wins that money. It's a zero sum game...one player wins, but the rest lose. A thread 1/ Now, imagine a referee for that poker game. His fee is to take money from the pot during each round. The game is now no longer zero sum for the players...it's negative sum for the players because the amount of money that is available to the players to win is less than put in /2

Yesterday I posted a thread on why Bitcoin's upside is limited (greater fool asset, energy consumption). I want to expand on the greater fool aspect, and the comparison I made to MLM schemes /1 Market saturation is the point at which all the people who want the product at the desired selling price will purchase. No product or service will achieve 100% market penetration, since not everyone will want the product or be able to afford it. consumerfraudreporting.org/MLM_saturation… /2

In a recent excellent thread by @coloradotravis on how crypto is the financialization of belief, I saw people respond with claiming Bitcoin has "unlimited upside." This isn't true. The upside is very limited, giving Bitcoin a very poor risk/reward profile. A thread /1 @coloradotravis First, Bitcoin is purely a greater fool asset. While it may not technically be a ponzi, it has the same structure in that it is 100% dependent on inflows of new investor money to pay out early investors. Unlike the stock market, there are no other sources of inflows /2