Hello everyone! I have only been on Reddit for a few months but I learned so much from it that I figured I should try and give back to the community. English is my second language and this is the first time I ever write a full-length article, I hope you will enjoy reading it and I would be very thankful if you could provide some feedback about my writing, about the topic, or about anything else really… So here goes!
Why you should learn poker and game theory:
My story is similar to that of many: I learned about the game 10 years ago (during the golden age of online poker) when some friends of mine invited me to play a home game. Although I initially thought of poker as just another game of chance akin to playing slots or roulette in a casino, I quickly came to realize that there is a lot more to it as my more experienced friends would repeatedly get the best of me during these home games, which led me to start watching videos and reading strategy books to improve my skill… Little did I know it’d be the start of a journey that would impact many different aspects of my life way beyond the game itself, as most of the fundamental principles learned through poker can be applied to your decision-making outside of the game, especially when it comes to money management and investing. Now, let’s dive into a few of these principles:
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- Risk management (i.e. Bankroll management)
When learning about how to be successful playing poker, the first big piece of advice most people come across is bankroll management or BRM. To understand BRM, you must first realize that poker has a lot of variance: you might be vastly ahead in a given hand but there is almost always a slim chance that you will lose in the end if one specific card hits. This implies that you will sometimes lose even though you were a 99% favorite, and that you will sometimes get unlucky and lose 2, 5 or maybe even 20 such encounters in a row. THIS is variance. It doesn’t mean that you played bad or that you made bad decisions, but rather that you got unlucky. Over time you will have lucky streaks and unlucky streaks, and these will average out in the long term… It’s just the way the game goes.
Now that we understand variance, let’s get back to BRM. What is it exactly? Let’s say you are the best poker player in the world but you only have 1000$ that you can EVER use to play with. Taking your whole 1000$ on one table and multiplying your stack at an exponential rate might seem like a good idea. Surely nothing can go wrong since you’re the best player in the world right? But variance can be a bitch ;) Even if you’re the best you will lose regularly and you will sometimes get unlucky, it’s just part of the game. The correct move here is to apply BRM, which means only using a small % of your available capital for each game you play in order to reduce the risk of going broke. Using only 100$ per game would already be a lot safer, but you still run the risk of going under on a streak of bad luck. If you only allocate 10$ per game you play, then it becomes virtually impossible for you to ever go broke, even on a huge streak of bad luck. Sure it’s not as exciting and you won’t be making money quite as fast as you could, but this is the way to go to make sure you don’t go broke…
This approach to risk management translates very well to investing:
- Only invest what you can afford to lose. Once the money is on the table it’s as good as gone, which is why you should only use your “spare” cash and never invest with your living expenses or worse, borrow money to invest.
- Diversify your investments. There is always a chance, however slim it might be, that you will lose most of your investment. This is why going all-in on a specific investment is generally a bad idea (this applies particularly well in the crypto space).
Proper BRM allows you to make sure that you will come out ahead in the long run if you play well, which basically comes down to making more good decisions than bad ones. But that’s assuming you don’t let emotions come in the way of your decision-making, which brings us to our next point…
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- Emotional management (i.e. Handling tilt/Positive mindset)
Nobody likes losing… In the same way we enjoy winning because of the dopamine rush, we feel bad when we lose which is totally natural. Overcoming this and avoiding tilt (irrational decisions made out of angefrustration) is an essential skill for any successful poker player. You might play a sound game of poker and apply good BRM, but you will still lose if you let your emotions get the best of you.
After a loss, rather than being angry and frustrated, you should evaluate your decision-making. If your decision-making was good, you just got unlucky and you shouldn’t worry about it since you are playing for the long run (remember that variance teaches us that anything can happen in the short-term). If your decision-making was bad, you need to learn from your mistakes and move on. The key here is to always have a positive mindset: making mistakes is part of the learning process and should be seen as an occasion to improve. Being angry and ranting, on the other hand, rarely result in anything positive.
Again, this translates very well to investing:
- Don’t be impulsive, don’t let your emotions cloud your judgment. You should not FOMO because the price is pumping, nor should you sell because of FUD or price corrections. If you believe in a project, short-term price changes (did I hear someone say “variance”?) shouldn’t bother you.
- Don’t get stuck up on losses. You bought the top and it crashed immediately after? You sold the bottom right before a huge rally? Don’t let this bother you: what’s done is done and you just need to move on and make the best of your current situation.
- Have a positive mindset. Anger and frustration lead to nothing. Yes you could have bought in 2009 when you first heard about it, hindsight is always 20/20. Stay positive and keep learning/improving yourself.
The good thing about all this is that it goes way beyond poker or investing. Being aware of your emotions and how they affect you, learning how to handle losing even when you were “supposed” to win, etc… All this can tremendously help you in all aspects of life by making you less impulsive and more rational in your decision-making. Now, this leaves us with our last fundamental principle of a sound poker strategy:
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- Basic stats and probabilities (i.e. Expected value/Odds)
To become an accomplished player, you will inevitably have to learn about these simple mathematical tools that poker players use all the time in their decision-making process, such as odds and expected value. To make it very simple, the expected value (EV) of any bet is (REWARD \ WinRate - RISK), meaning that if you can bet 1000$ with a chance to win 10k$ half of the time, your EV is *(10000\0.5)-1000 = +4000$**. Obviously these are great odds to take as long as you have enough capital to overcome variance. But things would be very different if the odds of winning were only 5% as your EV would then be negative *(10000\0.05)-1000 = -500$.*** Now this is clearly a bet you should not take…
Now that you know probabilities, statistics and game theory are useful decision-making tools in poker, guess what? They are also extremely useful in investing! Even better, the study of game theory with problems such as the “Byzantine generals” or the “Three prisoners” has been, along with cryptography, the foundation on which blockchain technology was built, enabling the trustless and decentralized services that are about to revolutionize our world…
Assuming this was enough to pique your interest and make you want to dig deeper, I’ll just add that just like the other topics we discussed and as you might have guessed, this translates very well to investing and also to pretty much anything in your life:
- Learn how to break down complex situations. Logical thinking paired with a statistical approach will help you break down any complex problem into several easier problems, making the whole thing a lot easier to approach/comprehend.
- Base your decisions on a methodical and rational approach. List every possible outcome along with its associated upside/downside, estimate the probability of each outcome to occur and make the best decision based on the information available.
My point here is that risk management, emotional management and statistics/game theory are all awesome tools that you should definitely add to your arsenal. Not only will it improve your money-management and investing, it will also be beneficial to your decision-making and to your life in general. Of course poker is not the only way to learn about these, but I personally found it to be the best practice ground to refine and improve them, which is why I strongly encourage you all to try it out and study the game.
I hope you enjoyed the article, and I wish you all a happy 2021 bull run! May we all come closer to retirement and financial independence!
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TL;DR: more than a game, poker is a school of thought. It teaches you to be reasonable, to assess the risk of every single choice you make, to overcome you emotions, to play the long game rather than the short game, to make informed decisions, etc… This has made me a lot wiser in every aspect of my life, which is why I strongly encourage to try it out and read about poker strategy.

I was officially diagnosed with autism three weeks ago, when my girlfriend’s brother (you can pretend it was my wife’s boyfriend if it helps you to visualize) told me about Andrew Left shitting on GME and GME hitting $45 the same day.
 
I lost around half of my life’s savings (thank god I’m young enough that it was only around $5k) and have recognized a few lessons in the last few weeks, if not learned them yet. I’m taking some time off trading and might return - I hope that some of these perspectives are in any way valuable to my fellow aut-lets out here. These are not original, revolutionary perspectives - the smooth brain tl;dr is that if you think you’re a financial genius on a subreddit of people who identify as ape-brained tards on the internet, you’re probably closer to being a bonobo than a billionaire.
 
1. Monkey can always throw poo but monkey cannot take poo back
or You can literally always wait an extra day to buy - don’t let FOMO make your decisions for you

I knew about the GME story at $45, didn’t have a brokerage set up, figured I had missed it. As it kept climbing, I kept having FOMO, eventually got set up and bought near the peak at $330, figuring “at least I finally got in - this was my last chance”. Every single time I thought “well I missed it, I should have got in today” - I was wrong - there were other opportunities and if you ever mentally say “this is my only chance” - you have no chance.

 
2. Monkey need to know safe tree to hide in if monkey throw poo
or Always have an exit strategy

“Diamond hands”, “waiting until it feels right”, a price target that is 5000% higher than the last month’s price etc. are not exit strategies, because when “the moment feels right”, everyone else who had a planned out strategy has beaten you to the punch. You don’t even have to execute your exit strategies when they hit those targets, but if you buy a single asset without having a stop loss and a target sale price in mind, your exit strategy is going to end up being “selling when I feel shitty” and that’s not going to work.

 
3. Once monkey throw poo, monkey needs to be ready to keep throwing
or Don’t let a fear of buying and selling paralyze you.

Once I had my GME, I had a massive, massive fear of selling because that would “lock in my losses”. That is a lie - stocks are meant to be bought and sold, and a stock (unless it pays dividends) is a worthless bunch of electrons. If you wouldn’t buy at a stock’s current price - don’t hold there either - you can always buy back in and selling at a loss is a lot smarter than holding to zero.

 
4. Monkeys don’t believe in God
or If you NEED a stock to do something, don’t buy it

I bought AMC weekly options (calls and puts) once I got out of GME (far too late) because I needed to “make it all back” and figured the volatile like lottery tickets could do that. As soon as you only have one outcome that you’re okay with, you’ve already lost because you have no objective decision making - accept that you’re better off going to a casino and betting it all on red for roulette because you’re at least not going to pretend you’re smarter than everyone else.

 
5. If monkey goes to magic banana fountain on advice of lion, monkey gets eaten
or If you have no additional perspective/info on something, and are just going off what you read - don’t buy it.

If you didn’t discover a reason to buy something on your own, it’s probably not going to be a smart buy for you. If you read some good DD, do your own research, like the fundamentals or the projections or literally anything - good for you and go ahead, but if your main reason for buying a stock is “everyone else is” you’re definitely not going to win as much as the smart people that actually did their research and understand the trends and exit strategies, and you will most likely lose. WSB is a propaganda machine - and its not just the exterior HF forces that motivate it. I caught myself making pro AMC comments when I needed the price to go up and have realized that not a single sane person on the planet has ever thought “boy I thought of a really good stock play that’s going to make me rich - here is free financial advice without any ulterior motive”. Every single comment and post here that mentions a specific stock has an intent for that stock, implicit or not and if you’re a lurker that tries to gauge “sentiment” for a stock, don’t believe a single word. If I am to ever use WSB again, I am aware that I will only be looking for memes, well-recommended resources, and DD that leads me to do my own research - if WSB is your only destination, you are fucked.

 
6. ^{I made this statistic up}, but 85% of overconfident monkeys get eaten by leopards
or Confidence is not necessarily an asset

I really truly believed wholeheartedly that I had outsmarted the system, hopped on along with the hip tendie-loving community, and even when it started to dip, that it would eventually hit $1000. I am not saying to not trust your gut, but if you begin to assume that only you are right, every hedge fund is manipulating the markets against you, you’ll be able to sell right before the rest of WSB does etc, you are not going to be in good shape. If you do not have doubts about your investment, that probably means you didn’t do good enough research.

 
7. Monkeys don’t fall in love
or You should not be emotionally attached to a stock.

For all intents and purposes, for almost all of us, a stock is a bunch of electrons in a computer that may or may not turn into chicken tendies. Those electrons do not deserve your respect and your emotions are going to make you a worse trader - if you “like the stock” then you are much more likely to make an emotional/faith-based decision than you are to make a smart one.

 
8. Bananas are delicious, but so are insects, nuts, the Wendy's 4 for $4 and tendies
or Don’t listen to WSB - don’t make a YOLO play.

I’m not even saying to diversify for the sake of “financial stability”, I just had no fun once I had put all of my money into one stock and couldn’t make any other moves. Make two YOLO plays so you have separate stocks to be following - buy half of your YOLO now and half later - buy 10 different YOLOs at smaller quantities. If you’re in this because this shit is fun, give yourself enough toys to play with that it is.

 
9. MONKEYS DON’T READ
or Stop checking ticker tape, WSB, Bloomberg terminal

It’s not fun - it’s not that meaningful, and if you’re buying stocks that are only going to have one window for you to sell, you’re going to lose 9 times out of 10 anyways. Set your exit strategy, put in your stop limit and stop hitting F5. All the people who have already had GME gains had multiple exit points and the only people crushing F5 were losers hoping to get out. Lose your money or your sanity, not both.

 
If anyone else has some advice for me and my fellow millions of fresh aut-lets out here, let her rip. Until then, I am not a qualified financial advisor nor monkeyologist, and my advice should not be taken as such.

I come in peace.
I’m interested in cryptocurrency, but many of the claims about its potential as an investment leave me wondering if I’m seeing the same thing others are. I also know I don’t know everything. Instead of shaking my cane at all the youngsters making a fortune with their internet money, I want to see if I can learn more.
Let me also preface this by saying that I’m generally interested in cryptocurrency. I think cryptocurrency is going to be useful, both for its anonymity and for cutting out costs from the traditional financial system (e.g. fees for converting dollars to euros, time spent waiting for transactions to clear, etc.). I’m also intrigued by the potential of smart contracts to automate some transactions, though I think some of the bullish arguments for these are overstated. We’re not going to get rid of contract law.
My skepticism of Bitcoin (and other coins) comes from the idea that it’s going to make you rich, which is the majority of the talk I hear around the topic these days. I’ll lay out why I’m not convinced by the “get rich” case for Bitcoin (and it would apply to any other cryptocurrency). Maybe you all can set me straight. This is all pretty basic, so don’t expect some sort of novel argument. I just tend to see the crypto community dunking on people who claim Bitcoin will fail because it will be hacked or that it will be banned and so on, when some of the basics seem more pressing.
The Currency Paradox. One of the biggest bull cases for Bitcoin is that it’s the currency of the future. But for it to be a functional currency its price has to be stable. No one is going to spend it if it could be worth double or more in a few months, yet people are owning it precisely because they hope for it to double or more in a few months. At some point its price will need to flatten and be boring and predictable for it to be a functional currency. That will neuter the investment thesis. I’m also seeing a lot of related arguments that Bitcoin is the new gold or a store of value, but the same reasoning applies. No one is going to protect their wealth by putting it in an asset that regularly crashes. It may turn into an alternative asset used for diversification, not entirely unlike gold, but it will still need stability.
The Fiat Currency Obituary. You might reason that Bitcoin will stabilize as a global currency when fiat currencies disappear. The logic is something like this: If Bitcoin replaces fiat currencies (~$37 trillion in circulation?) then it will have to be worth several million per coin, making early adopters wealthy in this new system. Now, I can’t “prove” that fiat currencies aren’t going anywhere, but I want to note their demise is far from a certainty.
People have been predicting the end of fiat currencies for decades, long before Bitcoin ever existed. I suspect many people have suddenly found these fringe arguments more convincing now that they have a financial stake in the outcome. Of course, it’s possible these prognosticators weren’t wrong, just early. But your great-great-great-grandkids could wind up saying that about you too.
Governments have a very strong self-interest in maintaining their own currencies, tools to enforce its use (taxes must be paid in the currency), and have militaries to protect their people and secure their existence. While there are plenty of cranks who hate the Fed and think it manipulates the dollar too much, most people are pretty comfortable with their cash. There would have to be something in the order of an interwar Germany hyperinflation or something like the 1997 SE Asian currency crisis, but for the major developed economies, for there to be serious pressure to flee fiat currencies. I’m not saying it can’t or won’t happen, but it’s a longshot.
It’s possible Bitcoin could stabilize as a more niche currency, something that solves a specific problem like the obnoxious fees charged for exchanging currencies abroad or something in that vein. That would lower the dramatic price predictions, though. And unless you’re active in whatever area Bitcoin is used in, you’ll still need to convert it to dollars to enjoy the fruits of being early.
It’s Mostly Paper Profits Right Now. Yes, lots of people have gotten rich from Bitcoin, but not everyone drooling at the current valuation can cash out at that price. Some people converted their Bitcoin to dollars during the latest peak and have enjoyed their riches. If a lot more Bitcoin owners decided they’re ready to collect their winnings at $32,000 then the price will crash again. When you see lots of people’s goals for owning Bitcoin is to convert it to dollars to pay debts, buy a house, buy a Lambo, whatever, you realize not every Bitcoin owner will have this opportunity until Bitcoin is a functional currency (see above), which could be never.
You might say the same is true of the stock market, and there are some similarities. Here’s the difference: Companies have assets, including future profits, that backstop their stock’s value. If I was the lone shareholder of Apple I would be filthy rich whether there was anyone to sell the stock to or not. They made around $60 billion in profits last year and that would be all mine. Bitcoin’s value is more speculative and I need more people willing to pay more for it than I did or I can’t realize that value. These people will eventually dry up unless Bitcoin develops more functional value.
As long as Bitcoin remains a speculative asset there are going to be winners and losers, people who cash out with extraordinary gains and people who’ve sunk more money in than they can get back.
It’s Just Math. I see a lot of formulas and mathematical jargon used to justify supercharged price predictions for Bitcoin. That’s all fine, but I suspect some of this is meant to put a scientific veneer on what amounts to guesswork or enforce an insideoutsider dynamic (Bitcoin skeptics just don’t understand math!).
The problem here is that making accurate predictions is incredibly hard, even with an ironclad model and perfect data. It gets even harder when you factor in the uncertainty of human behavior. Imagine the difficulty in trying to forecast the 2032 presidential election or what market share Tesla will have in 2040. You can certainly make an educated guess and there’s lots of data to draw from. But there is always going to be a big “if” justifying even the most complex sounding model. Just because a model spits out numbers doesn’t mean it’s right.
One of the more popular of these is the stock-to-flow model predicting Bitcoin hitting $1 million per coin by 2040. One of the selling points is that it predicts Bitcoin’s price with 95% accuracy. That sounds great. Unfortunately, this is a meaningless number by itself. There’s a lot more behind convincing statistical research than finding a line of best fit between two variables. As any number of p-hacking scandals can attest, finding “statistically significant” relationships between variables, sometimes totally unrelated variables, isn’t hard. I’m willing to wager an enterprising sleuth could find a similar relationship between the log price of Bitcoin and many other variables. In fact, the author of the stock-to-flow post does it in the same post.
What would be more convincing is a strong justification for analyzing a relationship between these two variables with robust statistical tests that rule out other explanatory factors. Even then it may have very little predictive power. Instead, the author plucks a metric from commodity analysis as a proxy for “scarcity,” while simultaneously dismissing the utility of analyzing Bitcoin as a commodity, then does a basic regression between the two variables and voila, Bitcoin will hit $1 million. I wouldn’t put much faith in that analysis. And it seems to be representative of many of the "just do the research" arguments I see for Bitcoin's future.
Based on my reasoning above, my investment thesis in Bitcoin is this: It’s a speculative asset to buy with money you can afford to lose. You can make money from other speculators driving the price higher in the near term, when/if it begins functioning as a currency in the long term (where it could be a niche function like international transfers or could happen well after you’re dead and gone), or as a hedge against catastrophe like a global currency crisis, where you may have much bigger problems. This is not a lot different than a financial roulette wheel: It’s fun to play, but you wouldn’t put your mortgage on it.
Now, where have I gone wrong? Help me see the light.
UPDATE: Thanks for all the replies everyone. There is lots to think about. I can’t reply to everyone so I thought I’d add a few comments here.
It sounds like a consensus here is that Bitcoin is not a currency and shouldn’t be treated as one. Instead it should be viewed more like gold. I mentioned I didn’t find this reasoning particularly convincing in my initial post due to the volatility. It might also be the cynic in me, but the sudden change in narrative from “it’s a currency” to “it’s a store of value” sounded like a rationalization. But I think the analogy to gold u/GSEDAN made was a good one and I see the case a little differently now. I’ve never been interested in investing in gold so I think I overlooked some of the rationale behind it. There’s no doubt it’s retained its value because people believe in it and the same can be true of Bitcoin and other cryptos. I can see some of the value there.
With that said, I’m still very skeptical of the “get rich” claims around it. Gold is a pretty conservative investment, even with a community of very passionate believers. While I think Bitcoin is obviously more exciting, the analogy can only take you so far if you want to make an extreme prediction for Bitcoin prices. I would update my investment thesis for Bitcoin to include that it’s a gold-like asset that can offer you exposure to a unique market as a hedge against other markets (stocks, real estate, etc.) with more speculative upside and risk.
A lot of other people pointed me toward Ethereum as a crypto with more obvious value since it can do a number of useful things. I followed Ethereum with a bit of interest before the 2017 crash but haven’t followed much since. I’ll take another look now. I’m still uncertain of how the utility of the currency translates into price appreciation. u/ExtraExtraMegaDoge and a few others had an interesting discussion in the comments here about this too. I think my question here is if the usefulness of the currency increases the demand for it, which increases the price with a fixed supply, wouldn’t the constantly increasing costs deter people from using it? I have some more to dig into here.
Anyways, thanks again. As I said, I’m interested in cryptocurrency. I first started paying attention to it in 2015 and have casually followed it since then. I even own a bit of Bitcoin I bought during the 2017 frenzy (and wish I’d bought it when I first researched it in 2015!). But as the price rises again I keep hearing more and more about how it’s inevitably going even higher and going to make everyone rich and so on and I’m routinely wondering what I’m missing. So that’s where I was coming from.

I was asked to make a post about some stories within the Casino grounds so I thought I'd share. I have many so I'll do my best to pick the better ones.
Some back information: I've been a Casino Dealer for 11 years, I've been a supervisor for five years, and I've been a Surveillance Operator for one year. I've worked at three properties, none of which are connected or owned by the same company. I've worked on : Government/Private/Native American owned casinos.

1. From Hero to Zero.

At my first Casino, I was one of the first group of people who were trained to deal Roulette . After 4 weeks of working 6PM-3AM then doing roulette training from 3AM-8AM (Not paid) , I actually really enjoyed the game and after about six months I became extremely quick at the number game and the pace of the action was steady with very low margin of errors. Young man walks in, cashes in for $500. He buys in for $2 chips and just loads the board. After a few spins and pretty decent hits, he then changes his chips from $2 to 5$ then to $10 and racks his winnings up to $10,000. It was then, five spins in a row, he loaded the board with some pretty gross bets, and every spin I would hit the ONE number with either NO CHIPS on it, or maybe 1 chip , He lost all $10,000 in a matter of minutes. He leaves , and I go on break. After my break I was going back to the same table and wouldn't you know it, the same young man walks in and cashes in another $500. He tells me he just sold his car outside and this is all that he had left. So we do the same deal, buys in for $2 chips, then slowly starts betting $5 chips, $10, $25...and he makes $10,000 AGAIN. Within the next 25 minutes it was straight agony. Every spin, same thing, he would bet $2500 in chips, and win only $250, $400, and after about a half hour he lost it all . Never saw the guy again.
2) Man down
At this property, we are 24 hours for table games. It's currently 5AM , and I'm dealing some $25 Blackjack to this guy. He's probably early thirties , heavy guy. He's sober as can be, but right away I can tell he's been losing. We know how much you've bought in for, how much your down, or up, and I could see he was down $2000+. After about twenty minutes of pure losing, his temper starts to flare.At this point I now have two other guests at my table. Drinking coffee, not saying a word, just losing their money. After losing hand, after hand, this guy looks me straight in the eye, seized up, starts shaking, he can't move. He tries to punch towards me and smashes his stack of chips all over the place and falls backwards to the floor. I call for security, we cannot touch him due to liability . I can't move from my table because, well, liability / casino cash property, all I can do is try to talk to him. As I'm doing so, these other two woman who are sitting at my table just look at me and one says "OK, dealer, cmon lets go " as she taps the table telling me to start dealing and forget about the guy having a stroke on the floor. As security takes him to the ambulance out front, I had to stay behind for a couple minutes and give a statement. I go on break. I come back, and 45 minutes later, he comes right back in with a oxygen tank and keeps gambling for the remainder of the morning.
3) You get a dildo, and YOU get a dildo!
On a late summer Saturday night, we had a large event for these massive muscle guys/strongman competition type thing. After their show, I'm at the roulette table , and five of these boys come over to play. They were absolutely hilarious. They were feeling pretty good, cashed in somewhat large amounts and I could tell this was going to be a fun time. After about a hour of dealing to these guys, it's almost midnight, everybody is pretty hammered , I spin the ball, and all five of these guys take out these god damn (what I can only tell was) two feet purple dildos from inside their pants, and wiping them around in the air. The ladies were just loving it, one of the dildos landed in the roulette wheel and we had to shut the table down to re-calibrate the wheel to make sure nothing had been changed. I just remember that night was so much damn fun, I couldn't believe what I was seeing and I would never forget it.
4) Full Moon
On this day, I was actually training dealers / supervising them on small games like Three Card poker. We opened the table at 10AM, and this older man came and sat down . He played all day. The jackpot was $21,000 and that was pretty high for this table. He played, and played and played. He's one of the players where you know he's wearing a diaper because he's been drinking coffee/pop all day and hasn't moved in eight hours. As the day went on, this man never moved from his chair. Getting closer to midnight, he was aggravated and said "I need to go have a smoke, I'm getting killed in here". He left, and the very next hand, the lady beside him was dealt the jackpot . He didn't say much, but you could just tell he just hated life at that very moment because had he not gotten up, it would of been his hand. The man calmly took his cane , his hat, jacket, coffee, and left. The next morning I found out when he did leave he drove his car straight through his bank and was arrested.
5) Slick Robber
I actually give props to people who can actually pull this off. This story may confuse you so I'll try and explain things as best as possible. A lot of casinos have machines as soon as you walk through the front doors. A man walks up to one of these machines and sticks in HIS $100 bill. He doesn't gamble it, instead he hits the cash out button and gets a $100 TITO ticket where he then takes the ticket to the ATM machine to get his $100. Now remember, his Original $100 is in the slot machine. He then takes the $100 from the ATM and goes back to the same machine, and repeats this process over a hundred times. Essentially he's taking money from the ATM, and loading up the Slot Machine . Now he knows he can't do it too much because if the slot machine gets full of money, the machine will shut down and the slow attendant will have to take all the cash out. So he deposits over $10,000 , then has a small crowbar, he cracks the machine open and makes a run out the front door. To my knowledge he was never caught . But damn, that was pretty smart .
EDIT:
6) Mental Health is a thing.
10PM man walks in to play some high limit BlackJack. This guy knows the game and played well. Dressed nice, drank juice/tea , a little bit of a attitude, cashed in over $10,000. When this man was half way down his buy in, he said something a long the lines of "If I don't win here tonight, I'm going to go set myself on fire." I wasn't sure if he was serious because when people are down, they tend to say a lot of nonsense. I actually left early that night, and from a third party was told he did exactly that in the parking lot. The next day it was clear something terrible had gone wrong in the parking lot .
EDIT:
7) Nothing good happens after midnight
After a busy Saturday night, I was dealing a mix of games, and during this story I was in the middle of Blackjack. I had one young kid (probably 19) sitting in the middle, one older male probably in his later 40's sitting beside him on his right, and I had a really nice couple in their 20's sitting together at the other side. This young kid wasn't playing just sort of watching, and ever time the old man won he would give this young guy some of his winnings. The older man, was a wine drinker, and he had black between all of his teeth, I'll never forget. He's a little drunk but nothing terrible. As the night goes on, the older man goes and uses the washroom, at which point the couple asked the young guy "Oh was that your dad?" and the young guy says "Hah, no I wish!". The couple and I just looked at each other. This old guy, was in complete control over this kid. Absolutely disgusting. The night ends, and I find out the couple called a few of their friends, and they all waited outside by this old mans truck and beat the living hell out of him. 40 years old, sleeping with a 19 year old, completely brain washed . Very weird.
8) That one co-worker where you just wish they would quit.
One of our co-workers, nice guy but had a very big ego and we as employees just sorta left him alone. One day he had enough of the atmosphere and quit. Now usually when you quit, you cannot come back until you paperwork is finalized. How ever, HR was in that day, and he was given the paperwork the very next day. He came in, cashed in $1000, and made $50,000 in about a hour at the Baccarat table. My manager, was extremely annoyed, because now this guy is just mocking the casino and having the time of his life (Thanks for the big tip by the way :) ) and so he decides to call it quits. He wants to ban himself and he wants $50,000 in cash. The casino says Nope, we are going to give you a cheque. Now here's the thing, most business people will take the cheque, how ever you CANT CASH the cheque until the following monday because it's on that day where the funds are available. The casino on the other hand will cash their own check in anytime , because they want you to play. So this guy pretty much said go to hell I want my cash, and he called the police. Police show up, and management promptly gave him the cash.I though it was absolutely hilarious .
​
9) No good deed goes un punished
I was dealing Three Card Poker, and the jackpot was around $17,000. This old man (a regular) was sitting there all day grinding it out. Super nice guy, always a pleasure to deal to. Well, after hours of playing, he stands up and says "Hey john!, can you come here for a minute?" so his buddy John comes over. He says to John "I need to go take a piss real quick, can you play my card until I get back?" John agrees . John takes the chips and I stop him and explain he can't play his friends chips, he needs to cash in and play his own. And he does. Welp, second hand out and bam, doesn't he win it. The old man comes back and is so happy, he can't believe it. John, took his $17,000, didn't say a word to his "buddy" and walked away. I never felt so much hatred in all my life. Didn't give him a dollar, not a thank you, nothing. The old man sits back down again, the progressive resets to $2500, and he sat there grinding away again.
10) The Top Knot
I had this player , young guy, who was born into a fortune. One of his relatives passed away and left him a pretty big sizable amount of money, so he played poker every single day for the rest of his days. I will add, he IS a good player. I did not enjoy his company just because of the "Know-it-All" attitude, but he was good. We'll call him John. John is 5'10, and well build, with muscle. John also decided today was the day to show off his Top Knot. (google top knot if you're not sure what I mean) So he sits down, and he's absolutely KILLING the table. Every hand, after hand, after hand. And because he's in such a good mood, he's playing any two cards, calling any $500 bet, and he's just dominating. This one guy at the table decided he had enough. He got up, without saying a word and left. A moment later, he comes back in, walks behind John, and takes a pair of scissors , and cuts off his Top Knot. I for one couldn't believe it, dying laughing inside, and it just turned into one big brawl. That was a good day.
11) That one bad seed
One of my best friends who I haven't seen in YEARS ended up being part of the crew. Was kind of nice to catch up. We never really got along as we grew up because he has a very high picture of himself . He wanted that 10/10 woman. A mansion, and a new Corvette. So every month or so we would all go up to the other casino to play. I myself would bring no more than $500, but I couldn't understand how this guy (we'll call him Kyle) was spending THOUSANDS of dollars at the tables. So this wen on for a few months. Well, one day, as we're closing the casino, he and I are in the High Limit room and we're getting ready to close the tables. We are told to take the chips out, count them, put them back, sign this piece of paper and that's it. Well as the supervisor was locking the tray, the piece of paper fell to the floor, so she asked Kyle to grab the piece of paper. As he bends over, a great big $500 chip falls right out of his sock. Kyle was fired immediately , but it all made sense. They offered Kyle a deal where if he replaced all the stolen chips they would not make it public. Not sure how that turned out.
12) If I ever decide to write a book, this will be the last chapter: <3
After working at my first Casino for five years, I met a Indian woman who was visiting from another part of the country. During this time I was explaining a game to her, which honestly I don't think she even cared. She explained she was visiting and sight seeing , and that was that.Well, two years later I ended up moving to the other side of the country and transferred casinos, and low and behold she worked there as a Dealer. We got married , and it's been 5 years.
13) The Tip
One of our tables that we've had for a couple years had a progressive jackpot that had reached $100,000. The dealer at the table was sitting pretty lonely. Nobody really played the game because people knew it was extremely difficult to win the jackpot. My memory is a tad foggy, but you somehow needed to flop the royal flush. This young guy sits down and says to the dealer, we'll call him John. "John, if you pay me that jackpot, I will tip you $10,000" Well John started dealing, and about a half hour into his shift, he F*cking did it. He dealt him the royal. And you know something?This young lad, kept his word, and he made sure there was a audience, and he tipped exactly $10,000. That was a moment right there. That pay cheque was real nice. I think we all got about $500 more than usual. The moment that jackpot was awarded they got rid of the table because the money it was making was not near what the casino wanted. I'm sure there have been bigger tips at other casinos, but that was something special .
14) The Lawsuit
Now this story I'm going to have to beat around the bush a bit due to the nature of what happened. I can't won't answer any questions that you may have on this topic other than what I have to say because it had a lot of publicity . The waitresses at this casino had to wear very thin sexy clothes. Not borderline legal, but it was noticed. One day they called all the waitresses to come in and explained they were changing their outfit to something even more sexier. Now these new dresses were very very borderline legal . The staff said No way. We're not wearing that.So , friday night comes, and the staff work their whole shift, then at the end of their shift were called into a meeting and were all fired. Welp, one of those ladies father was a pretty big time lawyer. Brough the casino to court and won. They won big. Good for them. We had no waitresses for a couple days haha.
Thanks for reading along, I have many more I can add as the day goes on, those were just some off the top of my head. Feel free to ask any questions of the Casino industry. I don't really have many stories about the surveillance department because that's the one area where I can't really say a whole lot due to its privacy and contracts I was and still am under.

What a crazy week it was in the stock market! I'm not going to give a recap on what happened, if you missed it, you're an idiot, go away.
​
But I am going to talk about that oft-repeated phrase by long-time investors who have never in their many years of investing seen or imagined what happened. "This is not investing, this is gambling."
​
There was even a reasonable and well-thought out article by Brett Arends on the subject in "An open letter to Gamestop's "Reddit Army" featured here: https://www.marketwatch.com/story/an-open-letter-to-the-reddit-gamestop-army-11611871658
​
What he says is true about people who get involved in the stock market making risky plays, they lose a ton of money, think that's what investing is, and they pull out, never to invest again.
​
That squared with my beliefs because that's one thing we're trying to preach here at the TLSS subreddit - get invested early for the long term, and more opportunity will befall you to make money.
​
But make no mistake about it - our brokers have tons of ways for us to try to make money that have absolutely nothing to do with investing, and everything to do with gambling. So why is it such a surprise that so many treat investing like gambling and then walk away from it frustrated when they lose?
​
Let me define first, what Investing and Gambling mean to me.
​
Investing is paying money to own something, with the intention of that thing appreciating in value so that you can make money off that future value. That doesn't have to be stocks, maybe you own a pre-rub Optimus Prime from the original 1984 Transformers and you kept it in pristine condition in its original box expecting you can sell it for over a grand (which you totally can.) I've never really understood why people would say things like, "I'm going to start running, so I have to go invest in a good pair of running shoes." Ridiculous! Maybe in some sense you are "investing" in your health by running a few days a week, but those shoes are not going to appreciate in value, so it's not an investment, you dumb shit. Maybe if you had the original Air Jordans and have never run in them, but that's the only way to "invest" in footwear.
​
Gambling is paying money not to own anything material, but simply for the chance to turn that money into more money. Classical examples are playing Roulette and betting on Brady and co. to beat the Chiefs in Super Bowl 55.
​
To me, the main difference in Investing v Gambling in the stock/bond/etf market is the ownership of something that you can sell/gift/will to someone, or lose in a divorce settlement to your cunt ex. Betting on Seattle to cover against the Rams so that you can turn 100 dollars into 250 is not exactly something you can will to your kids. The money, yes - the bet, no.
​
Investing as we are doing in TLSS means we are buying shares of ownership in the hopes that smart moves made to grow the business will increase the value of that company and therefore the value of our shares. That's what I have always understood to be the primary feature of buying stock and investing, and even though there is a risk of financial loss, owning something is what makes it an investment. But outside of buying stock, what does your brokerage allow you to do?
​
Let's start with "Short Selling." What is it? Essentially, you borrow shares from a brokerage on the belief that the value of the shares will go down in price, sell them immediately, and you pay a fee that is a function of the share value and the amount of time for which you borrowed it. When the price goes down and you feel that either you are ready to cash in or you don't think it will go down any further, you "buy" them, give them back to the brokerage, and that becomes your buying price. So if you shorted 100 shares of Game Stop at $480, and executed the short sale when it went down to $240, you made $24,000 on the short sale, less whatever the fees were. During this entire process, did you actually ever own anything? No, you didn't. You borrowed it, with every intention not to keep it. By the time you did anything that indicates ownership - buying - you had to give it back! You paid anywhere from .3% to 30% per annum (depending on how difficult it is to short) and during the time you borrowed it, you didn't even qualify for the dividends on it (if there were dividends!) What's worse, your short selling manipulated the price of the stock. That's right! When you short sell, the first thing that happens is the transaction gets recorded as a sale, which makes it appear that there less demand for the stock than there actually is. Then when you "buy" it after it's gone down (covering) it looks like someone bought it. So it's actually a form of rigged gambling, like the dealer slipping the Ace of spades to his buddy under the table. Sure he won't necessarily win, but the odds are now more in his favor. And that's the thing about gambling; as long as the probability of winning is neither 0 or 1 - it's still gambling if there is any chance you can lose. And since you never really owned anything, by definition, short selling isn't investing, it's gambling.
​
Then, there's options trading. I don't have a particularly deep understanding of all the particulars of options, like the designations of naked, uncovered, unmarried, etc. But I do know in a general sense what calls and puts are.
​
A call is an option, but not an obligation, to buy a stock. Options trading in OTC stocks is essentially nonexistent, but let's take TLSS as an example. Let's say you wanna buy some TLSS stock but not sure it's going to go anywhere in the next 3 months. So you place a call option to buy TLSS at the current price 0.0457, which will be called the "strike" price, anywhere in the next 3 months. For that 3 months, you pay the "premium" for that right to buy. If the price stays flat or goes down, you don't have to buy it, and all you've lost is the premium. But if it does go up, you can now buy at the 0.0457 price no matter how high it goes. You pay to minimize the risk, but until you actually buy it, you don't hold anything of value except a "right," and that right exists solely in contract between the seller and the buyer. That's not owning something tangible, and you can still lose money, hence, that's gambling. Puts work the same way but are the exact opposite. Again, you are paying a premium, but for the right to "short sell" stock at a certain price below the current price. This is protection from typical short selling because in short-selling if the price keeps increasing, there's no limit to how much you can lose. However, with a "put," once the PPS rises above the strike price, you are not obligated to short it and all you've lost is the premium. Given that we've already defined short selling as gambling, then buying put options, a derivative of short-selling, is therefore also gambling. It's just that the put option limits your risk to the premium paid.
​
There are all sorts of variants of options and other types of hedges that I don't have the specific knowledge for, but it seems like only 1 feature of all this is actual investing - buying stock and holding it for the long term. That's it! That's the one thing that is an investment. EVERYTHING ELSE - Puts, Calls, Short Selling, Day trading, Swing Trading, Wife Swapping (just making sure you're still paying attention) and just about everything else that is not buying and holding IS FUCKING GAMBLING. Most of what our brokerages enable us to do is in fact gambling, so why is it even a surprise that so many people use their platforms to do it? And even worse, why is it that when the peasants get good at it or find a way to beat the rich at their own game, do these dildo-lickers start getting all fucking bitchy about it? Quit preaching to us you hypocritical cocklamp, all the shit you do on a regular basis is gambling. This is just super-high-risk balls out stupidity, but that doesn't make what the Gamestop reddit army did any less gambling than what you do. It's just idiotic. Call it what you want, but get the fuck off your high horses, you intolerable shitweasels. I'll sink your fucking yacht in shark infested waters and tie a sea lion to your balls.
​
tl;dr: Fuck you, you don't get a tl;dr. You want a short post, go to twitter, you illiterate piece of shit.
​
EDIT: I would hope I was clear in my limited knowledge of the more advanced types of trading, but please be advised I'm no expert, and this post was intended more for entertainment than anything else. I can seen how things like calls can be used to mitigate risk, and there are probably other types of trading I don't even know about that would qualify as investing. My point is simply that a lot of it isn't, and it fosters the false belief in some people that all investing is gambling, and the mistaken inference that when rich people say "this is not investing, this is gambling" that this type of behavior isn't completely encouraged by the stock market and one's brokerage, because it totally is.

Ok so this post mirrors my post from almost 6 months ago when I posted about Hertz the day it reached its top of 6+ dollars after already announcing bankruptcy (it went from like 50 cents to 6+ dollars). You can see my submitted post history for that. Since this is an options post, I'll talk about something that rarely anyone ever talks about but impacts options pricing - the borrow rate - so that it's an informative post too even if you aren't interested in QS.
For the record I'm posting this as QS is 105 AH 12/21 so I can look back in 3-6 months. First, I'm not short QS so I don't want to hear some comment below saying you are just desperate because you are taking a huge loss. I'm posting this as a warning/advice just like when I posted about Hertz because at this point it's actually extremely negative expected value (EV) to go long QS through call options/shares.
First the IV is ridiculously high. There could be many situations that play out in which you can buy calls, it goes up 10%, and you will end up down. Second, one of the reasons for why anyone would buy QS is to collect the borrow rate, which is insane. However, most brokers don't give the customer this borrow or if they do, don't give the full borrow. For RH, you get none of this borrow, so this alone makes this very -EV at these price points. Finally, the most obvious reason, it's quite clear this stock is overvalued as it won't even have any revenue or sales for a few years. It's similar to NKLA actually (look at that chart when it briefly hit 90 earlier this year).
The stock is undergoing a short squeeze with high borrow rates, which is causing this spike, but historically these stop pretty fast and when it pulls back, all those calls/shares will lose value. There's like plenty of examples of this just this year, and the goal is obviously not to buy at the top. The main issue is also when it pulls back, it doesn't usually EVER bounce back up. See the NKLA bagholders at 90, HTZ bagholders at 6, KODK bagholders at 55, etc.
In the case you just wanted to just gamble, it's actually not a bad stock to purely gamble. However, there are plenty of better gambles out there that should return a higher expected return. Second, gambling is fine but we all know what happens when you play roulette in the long run. Sure you can hit that 23 number you bet on, but the more you push it, the quicker all of that goes away. So that's why this is a fair warning. You can gamble and you might win even for a short time period, but most will be left holding the bag. And when they hold the bag, they hold it all the way down.
I also wouldn't outright short this right now unless you want to sell a long dated call spread/naked OTM long-dated call. As I mentioned, the IV and borrow are extremely high, so a short term long puts strategy will have an extremely tough time printing. Furthermore, it's somewhat hard to short the stock with this high borrow, and that borrow is embedded in puts too. However, longer term, it's clearly a short at these levels, but you have to do it in some more unique ways as I mentioned above.
Finally, if QS spikes up from this 105 AH number, I guarantee you there will be some idiots who are gonna be posting here in the comments section about how they were right/I was wrong (see the HTZ comments). I'm ok with that. That means I didn't call the top exactly perfectly, but as I said, you can revisit this post in 3-6 months. Ironically on HTZ, the day after I posted, it did actually go up that day (to 6+), got a lot of shit comments, and I'm sure 100% of those guys lost money since it has never even seen anywhere close to that price ever again as the next day was the top. So same situation here. Just a fair warning. If anything, at least you learned how borrow rates affect options pricing and short positions.

Hey, it’s Coooolin!!! It’s Tuuesdayy! Terrific Tuesdaayy! Was it one for you though?! Tell me about your day, I’m interested! What did you do!? Let me know, doown beloow!!!
Here’s the new cards for today, thanks EA!

Silver Master Icons

Howie Morenz - 91 OVR - MTL / C - DIS² , PP²
Mats Sundin - 91 OVR - TOR / C - DIS² , T²
Scott Niedermayer - 91 OVR - NJD / LD - BAL² , SPE²
These require 9 Icon Collects — 6 if you have 88 OVR Scott Niedermayer
—

Fantasy Hockey Upgrades

Sean Couturier 93 OVR - UT
Req. - Base Ivan Provorov , and Philippe Myers + 2 Gold Collects
Mark Stone 93 OVR - UT
Req. - Base Alec Martinez , Shea Theodore + 2 Gold Collects
Cale Makar 92 OVR - UT
Req. - Base Gabriel Landeskog + 1 Gold Collect
Brock Boeser 91 OVR - UT
Req. - Base Braden Holtby + 1 Gold Collect ... - wow I look dumb getting Vancouver guys
—-

Primetimes

(More to come , will update)

NHL

Leon Draisaitl - 95 OVR - EDM / C - LTL¹ , GLA¹
Antemi Panarin - 93 OVR - NYR / LW - PP¹ , MAG¹
Jeff Petry - 89 OVR - MTL / RD - HOW¹ , SH¹
Jamie Benn - 88 OVR - DAL / LW - WM¹ , WH¹
Brandon Carlo - 86 OVR - BOS / C - SH¹ , GLA¹
Joel Farabee - 83 OVR - PHI / LW - SPE¹ , T¹
Miles Wood - 83 OVR - NJD / LW - LTL¹ , WM¹
Yanni - 83 OVR - TBL / C - PP¹ , MAG¹ ... do you hear yanni or laurel
Artturi Lehkonen - 81 OVR - MTL / LW - HOW¹ , WH¹
Chris Driedger - 79 OVR - FLA / G - 6’4” / 208 lbs - BAR¹ , SPA¹
Michael Mcleod - 78 OVR - NJD / C -DIS¹ , GLA¹
Philipp Kurashev - 78 OVR - CHI / C - BAL¹ , HOW¹
Yakov Trenin - 78 OVR - NAS / C - DIS¹ , T¹

Other Leagues

Matt Moulson - 80 OVR - BEA / LW - H and S¹ , PP¹ ... this man was a GOAT
Miguël Tourigny - 79 OVR - ARM / RD - SWA¹ , SPE¹
Francesco Pinelli - 78 OVR - RAN / C - SPA¹ , LTL¹
Connor Roulette - 78 OVR - TBIR / LW - H and S¹ , MAG¹
Semyon Der- - 78 OVR - PET / C - BAR¹ , WM¹
• • • • • • • • • • - - - - - - - - - • • • • • • • • • • • •

Packs Available

23H / 40M remaining
Ultimate Choice Pack
and
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10 items, with at least 5 80+ OVR Players
• Prime Pack - 10k C / 200 P
10 items , at least 5 Players with at least 3 Gold Players and 2 NHL Players

P.S.

• Rivals Resets Today — 5pm EST
• Silver Master Upgrade for Howie Morenz, Scott Niedyy, and Matss Sundinn!

Hockey News Today

• Today in Hockey History
• NHL Rumours

Stock Market News

• Stock Market Rises
• AMC and GME update

Other News

• Willie sees his shadow
• Today’s Horoscope
——————

What’s to Come?

• SB Season Reset - Wednesday at 5pm EST
• Rivals Rewards - Wednesday at 5pm EST
• HUT Champ Rewards - Wednesday at 6am EST
• SB Rewards !! - Thursday at 5pm EST
• More Event Cards!! - Friday at 5pm EST
—————

Summary of the day

Quick Read
Best Forward of the Day - PT - is LEOONN DRAAIISAITLL OVR 95 with the syn LIIGHTTT THE LAAMPP and GLAADIIATORR
Best Defence of the Day - PT - is JEFFFF PETRRRYY OVR 89 with the syn SHUUTT DOWNN and HOWIITZZERRR
• Rivals Resets Today - where did you place?
———— —— ———

Important Notice

Make today the best day ever. Do something you wanted to do for a very long time. - within rules / legally - . You never know if tomorrow is blessed for you or not. Never take it for granted - its a blessing! Do something today that makes you feel way out of your comfort zone — because when you get out of your comfort zone, you’ll be super happy you did!

Interested in Stocks?

EA’s Stock Price, after hours - Feb 2
$ 141.81 (usd) —- Currency Converter
we looked at the stock at $137.54 usd
—— That is a difference of ( $4.27 / 3.10% ) —
You can listen to EA’s Conference Call here
Disclaimer - I am not a financial advisor. It is your money, please do your own due diligence. I am not responsible for your money. This is *not** advice. I added this section for an added educational purposes only. Thanks*
—— —— —— —-

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• I made this for everyone. I’ll update it whenever I feel like it, but its been often!

DO YOU GUYS LIKE THE PLAYLIST?! For those not listening; How are you not listening to this playlist already!?
Comment songs to add, and please give feedback! It’s much appreciated!!
I currently have “Smells Like Teen Spirit” by “Nirvana” stuck in my head.... which you can play, recently added to the playlist!
Sidenote - How do you guys like the playlist!? I have a friend who makes music...and I really want to surprise him with some new people listening to his music... if you wanna help me, please click Here!! it would mean a lot to me!!
———-

Sites To Bookmark!

If you click here you will be redirected to bilasport. Bilasport is the best Online Streaming site for your entertainment needs for all sports! (Not affiliated)
A great streaming source recommended by NHLStreams is SurgeSport. Click on Hockey and you’ll be good to go!
Want to make your dream team, and show others what you’ve been working on, and much more? I will redirect you HERE!.
Here’s a helpful pack guide for you! Click!
Want to know how the market is holding up? With a simple TAP! you will be on the newly fresh made website for the HUT market, made by one of the guys on the sub!
.... what do the stats on a card mean? Is my card I want / pulled good? Click here to find out!!
When is my favourite team playing? When do they play!? Here you can click on this link, and tap on your favourite team. From there, tap “Schedule” . You can add this to your homescreen on iPhone by clicking the square with the upwards arrow, scrolling down, and tapping “Add to Home Screen”
——- —— —— —— —— —— —— —— —- —— —-

Fighting a Gambling Addiction?

Don’t feel scared to click here. Winning is SO much louder than losing. Know that you are NEVER alone. We are all here for eachother, and it is never too late to get help. I am here for you.
This is a VERY important thread, especially if you are new to HUT. Here!
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—— —— —— —- —- ——- —- —— ——
Thanks for reading.
I’m always welcome to feedback, please let me know what I can improve on.
If there’s anything missing, please let me know!
Take care, happy gaming! TODAY IS GROUNDHOG DAY!
• Coolin Killin It
(Life is like a puzzle, you just have to find the right piece.)

Ok so this post mirrors my post from almost 6 months ago when I posted about Hertz the day it reached its top of 6+ dollars after already announcing bankruptcy (it went from like 50 cents to 6+ dollars). You can see my submitted post history for that. Since this is an wallstreetbets post, I'll talk about something that rarely anyone ever talks about but impacts options pricing - the borrow rate - so that it's an informative post too even if you aren't interested in QS.
For the record I'm posting this as QS is 105 AH 12/21 so I can look back in 3-6 months. First, I'm not short QS so I don't want to hear some comment below saying you are just desperate because you are taking a huge loss. I'm posting this as a warning/advice just like when I posted about Hertz because at this point it's actually extremely negative expected value (EV) to go long QS through call options/shares.
First the IV is ridiculously high. There could be many situations that play out in which you can buy calls, it goes up 10%, and you will end up down. Second, one of the reasons for why anyone would buy QS is to collect the borrow rate, which is insane. However, most brokers don't give the customer this borrow or if they do, don't give the full borrow. For RH, you get none of this borrow, so this alone makes this very -EV at these price points. Finally, the most obvious reason, it's quite clear this stock is overvalued as it won't even have any revenue or sales for a few years. It's similar to NKLA actually (look at that chart when it briefly hit 90 earlier this year).
The stock is undergoing a short squeeze with high borrow rates, which is causing this spike, but historically these stop pretty fast and when it pulls back, all those calls/shares will lose value. There's like plenty of examples of this just this year, and the goal is obviously not to buy at the top. The main issue is also when it pulls back, it doesn't usually EVER bounce back up. See the NKLA bagholders at 90, HTZ bagholders at 6, KODK bagholders at 55, etc.
In the case you just wanted to just gamble, it's actually not a bad stock to purely gamble. However, there are plenty of better gambles out there that should return a higher expected return. Second, gambling is fine but we all know what happens when you play roulette in the long run. Sure you can hit that 23 number you bet on, but the more you push it, the quicker all of that goes away. So that's why this is a fair warning. You can gamble and you might win even for a short time period, but most will be left holding the bag. And when they hold the bag, they hold it all the way down.
I also wouldn't outright short this right now unless you want to sell a long dated call spread/naked OTM long-dated call. As I mentioned, the IV and borrow are extremely high, so a short term long puts strategy will have an extremely tough time printing. Furthermore, it's somewhat hard to short the stock with this high borrow, and that borrow is embedded in puts too. However, longer term, it's clearly a short at these levels, but you have to do it in some more unique ways as I mentioned above.
Finally, if QS spikes up from this 105 AH number, I guarantee you there will be some idiots who are gonna be posting here in the comments section about how they were right/I was wrong (see the HTZ comments). I'm ok with that. That means I didn't call the top exactly perfectly, but as I said, you can revisit this post in 3-6 months. Ironically on HTZ, the day after I posted, it did actually go up that day (to 6+), got a lot of shit comments, and I'm sure 100% of those guys lost money since it has never even seen anywhere close to that price ever again as the next day was the top. So same situation here. Just a fair warning. If anything, at least you learned how borrow rates affect options pricing and short positions.

Hello everyone! I have only been on Reddit for a few months but I learned so much from it that I figured I should try and give back to the community. English is my second language and this is the first time I ever write a full-length article, I hope you will enjoy reading it and I would be very thankful if you could provide some feedback about my writing, about the topic, or about anything else really… So here goes!
​
Why you should learn poker and game theory:
My story is similar to that of many: I learned about the game 10 years ago (during the golden age of online poker) when some friends of mine invited me to play a home game. Although I initially thought of poker as just another game of chance akin to playing slots or roulette in a casino, I quickly came to realize that there is a lot more to it as my more experienced friends would repeatedly get the best of me during these home games, which led me to start watching videos and reading strategy books to improve my skill… Little did I know it’d be the start of a journey that would impact many different aspects of my life way beyond the game itself, as most of the fundamental principles learned through poker can be applied to your decision-making outside of the game, especially when it comes to money management and investing. Now, let’s dive into a few of these principles:
​
- Risk management (i.e. Bankroll management)
When learning about how to be successful playing poker, the first big piece of advice most people come across is bankroll management or BRM. To understand BRM, you must first realize that poker has a lot of variance: you might be vastly ahead in a given hand but there is almost always a slim chance that you will lose in the end if one specific card hits. This implies that you will sometimes lose even though you were a 99% favorite, and that you will sometimes get unlucky and lose 2, 5 or maybe even 20 such encounters in a row. THIS is variance. It doesn’t mean that you played bad or that you made bad decisions, but rather that you got unlucky. Over time you will have lucky streaks and unlucky streaks, and these will average out in the long term… It’s just the way the game goes.
Now that we understand variance, let’s get back to BRM. What is it exactly? Let’s say you are the best poker player in the world but you only have 1000$ that you can EVER use to play with. Taking your whole 1000$ on one table and multiplying your stack at an exponential rate might seem like a good idea. Surely nothing can go wrong since you’re the best player in the world right? But variance can be a bitch ;) Even if you’re the best you will lose regularly and you will sometimes get unlucky, it’s just part of the game. The correct move here is to apply BRM, which means only using a small % of your available capital for each game you play in order to reduce the risk of going broke. Using only 100$ per game would already be a lot safer, but you still run the risk of going under on a streak of bad luck. If you only allocate 10$ per game you play, then it becomes virtually impossible for you to ever go broke, even on a huge streak of bad luck. Sure it’s not as exciting and you won’t be making money quite as fast as you could, but this is the way to go to make sure you don’t go broke…
This approach to risk management translates very well to investing:
- Only invest what you can afford to lose. Once the money is on the table it’s as good as gone, which is why you should only use your “spare” cash and never invest with your living expenses or worse, borrow money to invest.
- Diversify your investments. There is always a chance, however slim it might be, that you will lose most of your investment. This is why going all-in on a specific investment is generally a bad idea (this applies particularly well in the crypto space).
Proper BRM allows you to make sure that you will come out ahead in the long run if you play well, which basically comes down to making more good decisions than bad ones. But that’s assuming you don’t let emotions come in the way of your decision-making, which brings us to our next point…
​
- Emotional management (i.e. Handling tilt/Positive mindset)
Nobody likes losing… In the same way we enjoy winning because of the dopamine rush, we feel bad when we lose which is totally natural. Overcoming this and avoiding tilt (irrational decisions made out of angefrustration) is an essential skill for any successful poker player. You might play a sound game of poker and apply good BRM, but you will still lose if you let your emotions get the best of you.
After a loss, rather than being angry and frustrated, you should evaluate your decision-making. If your decision-making was good, you just got unlucky and you shouldn’t worry about it since you are playing for the long run (remember that variance teaches us that anything can happen in the short-term). If your decision-making was bad, you need to learn from your mistakes and move on. The key here is to always have a positive mindset: making mistakes is part of the learning process and should be seen as an occasion to improve. Being angry and ranting, on the other hand, rarely result in anything positive.
Again, this translates very well to investing:
- Don’t be impulsive, don’t let your emotions cloud your judgment. You should not FOMO because the price is pumping, nor should you sell because of FUD or price corrections. If you believe in a project, short-term price changes (did I hear someone say “variance”?) shouldn’t bother you.
- Don’t get stuck up on losses. You bought the top and it crashed immediately after? You sold the bottom right before a huge rally? Don’t let this bother you: what’s done is done and you just need to move on and make the best of your current situation.
- Have a positive mindset. Anger and frustration lead to nothing. Yes you could have bought in 2009 when you first heard about it, hindsight is always 20/20. Stay positive and keep learning/improving yourself.
The good thing about all this is that it goes way beyond poker or investing. Being aware of your emotions and how they affect you, learning how to handle losing even when you were “supposed” to win, etc… All this can tremendously help you in all aspects of life by making you less impulsive and more rational in your decision-making. Now, this leaves us with our last fundamental principle of a sound poker strategy:
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- Basic stats and probabilities (i.e. Expected value/Odds)
To become an accomplished player, you will inevitably have to learn about these simple mathematical tools that poker players use all the time in their decision-making process, such as odds and expected value. To make it very simple, the expected value (EV) of any bet is (REWARD \ WinRate - RISK), meaning that if you can bet 1000$ with a chance to win 10k$ half of the time, your EV is *(10000\0.5)-1000 = +4000$**. Obviously these are great odds to take as long as you have enough capital to overcome variance. But things would be very different if the odds of winning were only 5% as your EV would then be negative *(10000\0.05)-1000 = -500$.*** Now this is clearly a bet you should not take…
Now that you know probabilities, statistics and game theory are useful decision-making tools in poker, guess what? They are also extremely useful in investing! Even better, the study of game theory with problems such as the “Byzantine generals” or the “Three prisoners” has been, along with cryptography, the foundation on which blockchain technology was built, enabling the trustless and decentralized services that are about to revolutionize our world…
Assuming this was enough to pique your interest and make you want to dig deeper, I’ll just add that just like the other topics we discussed and as you might have guessed, this translates very well to investing and also to pretty much anything in your life:
- Learn how to break down complex situations. Logical thinking paired with a statistical approach will help you break down any complex problem into several easier problems, making the whole thing a lot easier to approach/comprehend.
- Base your decisions on a methodical and rational approach. List every possible outcome along with its associated upside/downside, estimate the probability of each outcome to occur and make the best decision based on the information available.
My point here is that risk management, emotional management and statistics/game theory are all awesome tools that you should definitely add to your arsenal. Not only will it improve your money-management and investing, it will also be beneficial to your decision-making and to your life in general. Of course poker is not the only way to learn about these, but I personally found it to be the best practice ground to refine and improve them, which is why I strongly encourage you all to try it out and study the game.
I hope you enjoyed the article, and I wish you all a happy 2021 bull run! May we all come closer to retirement and financial independence!
​
TL;DR: more than a game, poker is a school of thought. It teaches you to be reasonable, to assess the risk of every single choice you make, to overcome you emotions, to play the long game rather than the short game, to make informed decisions, etc… This has made me a lot wiser in every aspect of my life, which is why I strongly encourage to try it out and read about poker strategy.
Edit: I couldn't crosspost from cc so I just copied the post as I figured it is relevant here too :)

I spent several hours this past week coaching traders at my prop firm. And something caught my attention…
Every single one of these traders needed help with the same thing.
It has to do with what I call the “reverse” gambler’s fallacy. And it’s something many traders struggle with.
Today, I’ll show you how to get this common obstacle under control… and start earning more consistent returns year after year…
What Most New Traders Get Wrong
The obstacle I’m talking about is trading psychology. It’s a very broad term used to describe the emotional side of trading.
Almost all new traders believe the most important part of trading is being able to analyze markets like a pro.
On the surface, this logic makes sense. After all, if you can reliably forecast which direction to take on a trade, the money should take care of itself… right?
What these novices don’t yet understand is that something special happens the moment you commit your money to a trade…
You start feeling things.
Whether it’s fear, excitement, anxiety, or a mix of all three, no one is immune to these emotions. And they can wreak havoc on even the best planned trades.
You may be able to call the direction, the timing, and the target price to perfection… But it can all be for nothing if you are unable to stick to your trade plan.
I can’t tell you how many times I’ve seen traders plan out a great trade… But then ended up somehow losing money, or not being in the market when the move they’d forecast played out.
So how do you beat your emotions to become a better, more consistent trader? It comes down to the three key parts of trading. Let me explain…
The Three-Legged Stool of Trading
I think of trading as a three-legged stool.
Your methodology/strategy for picking trades is the first leg. Your risk- and trade-management strategy is the second leg. And the third leg is your trading psychology.
In my experience, most traders focus on the first leg (strategy and methodology), and they neglect the other two legs. But the stool needs all three legs to stand on its own.
Over the years, I’ve honed my own proprietary method to develop well-rounded traders. Here’s what I’ve learned…
The first fundamental building block of a profitable trader is to establish a proven strategy/methodology you can use to identify good trades. In my experience, everything follows from this foundation.
How you manage your risk and your trades should be determined by the strategies you employ. Your trading psychology likewise will be influenced by your approach to risk and trade management.
I’ve seen other trading instructors assign arbitrary percentage values to the three legs of the trading stool. Usually these values are divided up like this: 30% to the level of importance on the analytical strategy, 30% to risk and trade management, and 40% to trading psychology.
But I don’t believe that any one leg is more important than the other. And yet I’ve found that, more often than not, traders neglect risk/trade management and psychology.
So how do you stop neglecting these two important areas to become a more well-rounded trader? That’s where our reverse gambler’s fallacy comes in…
​
Time to Ditch the Casino Mentality
There is one block that seems to stop traders from progressing to working on the other two legs.
That is, they don’t know how to flip the switch from thinking about their trades as individual trades in a vacuum… to thinking about them as a collection that relies on a statistical edge to net a profit.
Most traders run into this problem at some point in their careers. And if you’re frustrated with your trading right now, chances are you may be struggling with this, too.
It’s known as the casino mentality. And it’s the same mindset that amateur gamblers will take with them into Caesars Palace or the Bellagio.
It doesn’t matter if they’re seated at the blackjack table or standing over the roulette wheel. Most gamblers believe that the hand or spin they are about to play is the opportunity to hit a winner.
After all, if the roulette wheel has landed four black spins in a row, the next one surely must be red, right?
In reality, the chances of the roulette ball landing on black or red is even, at about 47.4% each. This means each spin is independent of the last.
This is also known as the gambler’s fallacy. What’s interesting is that I’ve observed a kind of reverse gambler’s fallacy from many traders…
This occurs when a trader, who does in fact have a statistically proven strategy, goes on a losing streak… And then instead of continuing to trust their strategy, they abandon it altogether.
How to Avoid the “Reverse” Gambler’s Fallacy
I saw this logical fallacy in effect this past week during one of my coaching calls.
The trader I was coaching had recently taken a technical setup that simply did not work. He was convinced he had done something wrong and wanted my help in improving his analysis.
But his analysis was great.
He didn’t do anything wrong in identifying the setup, which was textbook in nature. But the setup looked so good that, when it resulted in a loss, the trader was convinced that he was the problem… That he did something wrong.
The lesson I imparted to him, which I now want to pass on to you, is this very simple truth…
Nobody, and I mean nobody, ever takes a trade thinking it is going to be a loser. Every single trade you take will be because you thought it would make you money.
Despite this feeling of confidence, out of 100 trades, you’d be lucky to win 50% of them.
That’s why a great trader is not defined by what percentage of their trades end up as winners or losers. A great trader is defined by whether or not they are net profitable after taking 100 trades.
If you win roughly as many trades as you lose, but your winners make you 2x or 3x the amount of money you give back on your losers, you will end up with a nice profit at the end of the year.
Remember, nobody ever takes a trade thinking it is not going to work out. This is why it is absolutely crucial to abandon the idea of thinking about your trades as individual trades.
Instead, start taking a more data-driven, statistical approach to your trading. What do I mean by that?
Keeping a longer-term perspective on your trading is the key to longevity in this business. What your numbers look like over the next 100, 200, or 300 trades is far more relevant and important than losing your cool because you lost a handful of trades in a row.
Of course, to be able to make it to 300 trades, you must have a rock-solid risk management plan in place.
I don’t see gamblers at the casino take a professional approach very often. It’s rare to see someone bet small and stick to the odds on every play. It’s far more common for gamblers to be all over the place with the size of their bets.
They may start off betting small, but after winning a couple of hands of blackjack, they get overconfident and take an outsized bet. Sure enough, on that next hand they go bust while the house just happens to hit blackjack.
This is how casinos make money from gamblers. And it’s how the market parts amateur traders from their capital.
No doubt, it takes a lot of hard work and discipline to make the transition from amateur to professional. But, I promise you, the rewards make it all worthwhile. Until next time.
Regards,

TL:DR

• This is Part 1 of my two part deep dive on DraftKings (Ticker: DKNG, I will refer to the company as “DK”)
• This first part introduces you to (1) me, (2) the company, (3) my thesis on the company, and (4) digs into how they make money.
• The second part (already released, you can read it here - but get through part 1 first :) ) will go in depth to explore the question “Can we 10x from here?”
• DK is an exciting, disruptive company working to change how we experience watching sports and make it better.
• I am not a financial advisor and this is not investment advice. These are just my opinions to help facilitate learning and discussion.

Hello, welcome to my first deep dive write up.
My name’s Mark and I’m an accountant with a passion for investing. About two years ago, I used to work as an auditor at a public accounting firm and have been behind the scenes at many different publicly traded and privately held companies in the U.S. My goal is to bring my unique perspective from that past experience, my current experience working in a new role at a large corporation, and my understanding of accounting to help break down some of the most exciting growth stocks on the market today.
I’m a long-term investor. I am focused on finding great companies and holding them for a long time. I’m willing to endure volatility, crazy price drops, and everything that comes with this approach as long as the facts that led me to originally invest and believe in that company have not changed. If you want to learn more about this approach. I recommend reading the book “100 Baggers” by Chris Mayer.
Introduction
I think it’s fitting that my first stock pick has to do with sports. Sports has been a part of my life since I could walk at the age of 2. First with baseball and soccer, and then later in my childhood with golf. I’ve always played American football and basketball for fun as well and have always been an avid fan of all the major sports in the US.
I started playing fantasy sports (mostly just fantasy football) about 6 years ago and have always enjoyed it. Traditionally, with fantasy football you draft a team at the beginning of the year and those are your players for the rest of the season. If you have a bad draft, oh well. You can try to improve your team with trades and free agent additions but it is tough. Leagues usually consist of 10-14 teams (each managed by an individual) and there’s obviously only one winner at the end of the season (about 4 months after the draft). This can lead to the managers of the lower performing teams losing interest as the season wanes on. I believe DraftKings’ (DK) founders saw this issue and saw an opportunity. Enter, daily fantasy sports. Now, with the DK platform you can draft a new team every week. Or if you want, every day. This allows fans of fantasy sports to engage at whichever point of the season they want and at varying financial stakes.
The Thesis Statement
For every stock pick I make, I want to provide a quick thesis statement that can serve as a reminder for why I’m buying and holding that stock for the long term. I’ll always aim to make it just a few sentences long so it can easily be remembered and internalized. This helps during times when the price may sporadically drop and you need to remember why you’re holding this position.
The thesis statement I have come up with for DK is as follows:
“DraftKings: The leader in allowing fans to engage financially with their favorite sports, teams, and players. Having money at stake makes the game a lot more interesting to watch. The era of daily fantasy sports games, online sports betting, and online betting (outside of sports), is just getting started and DK is as well positioned (or better positioned) than anyone to capitalize off of this trend.”
Notice how I said “allowing fans to engage financially” as the first sentence and not necessarily “allowing fans to gamble”. There’s a reason for that. According to US Federal Law, Daily Fantasy Sports (DFS) contests have specifically been exempted from the prohibitions of the Unlawful Internet Gambling Enforcement Act (UIGEA). DK has always been, and I believe will continue to be DFS contests 1st, sports betting 2nd, and other forms of gambling/entertainment 3rd. It is noteworthy that states at an individual level can still deem DFS contests illegal if they so wish, but as of this writing (11/26/20), 43 of the 50 US States allow DFS contests and DK, accordingly, is offering DFS contests in all 43 of those US States.
I’ll try to clarify the difference between DFS contests and sports betting real quick:
DFS Contest – Pay a pre-set entry fee to enter a contest. All entry fees go towards “The Pot”. “Draft” 9 players to be on your “Team” for 1 week. Enter your “Roster” into a contest with other players (could range from 1 other person to 1,000s of people, the DK user can choose). Whichever “Roster” amasses the most points for that week out of all contestants wins. The winner will get the highest payout, and depending on the nature of the contest, other top finishers will receive smaller payouts as well.
Sports Gambling – Team A is considered a 10 point favorite to defeat Team B. This means that Team A is expected, by the professional gambling line setters, to outscore Team B by 10 points. This is known as a point spread. You can bet on the underdog or the favorite. If you bet on the favorite, they have to win by more than 10 points for you to win the bet. If you bet on the underdog, you will win the bet as long as the underdog keeps the game within less than a 10 point defeat.
These are just a couple simple examples to help you see the difference. Sports Gambling (the 2nd priority of DK) is a very lucrative market just as the DFS contests are. However, in the US, Federal Laws and regulations are a lot stricter on Sports Gambling than they are on DFS. As of this writing (11/27/20), 22 states (including the District of Columbia) out of 51 possible allow sports gambling.
DK is still in the infancy stages of getting their sports gambling business going. In the 22 states where they could potentially operate, they currently have a sports gambling offering in 11 of those states. The sports gambling business model for DK can be broken into two main offerings – mobile sports betting, and retail sports betting. Mobile sports betting means you can place a sports bet online from the comfort of your own home, while retail sports betting means you must go to a casino and place a bet with the sportsbook in person. I personally believe mobile sports betting is the real potential cash cow for DK out of the two types of sports betting offerings due to the convenience and ease of access. DK is currently working on and encouraging customers to lobby their state lawmakers to legalize sports gambling in more states.
How DK makes money
At the very least, before you invest in a company, you better understand how they make money. In Chris Mayers’ excellent book, 100 Baggers, that I mentioned above, he continually references top line revenue growth as one of the main common indicators of a possible 100 Bagger. This isn’t to tell you that any stock I pick will be a 100 Bagger just because it has great top line revenue growth, but if I am looking at a growth stock to hold for the long term, revenue growth is one of the first things I look at.
For DK, their means of making money is quite simple. I already went into detail above about DFS Contests and Sports Gambling. In DK’s latest 10-Q filing with the SEC (filed 11/13/20), revenue is broken out into two main streams: Online Gaming and Gaming Software.
Online Gaming (82% of Total Revenue for 9 months ended 9/30/20):
Online gaming is the true core business of DK and includes the aforementioned DFS Contests, Sports Gambling and additional gambling (non-sports) opportunities. DK refers to their additional gambling (non-sports) as “iGaming” or “online casino”.
For the 9 months ended 9/30/20, Online Gaming revenue totaled $239M, up 30% YoY from $184M in the same prior year period. Keep in mind, that this is an increase that happened during a COVID-19 global pandemic that delayed and shortened many professional sports seasons.
Online gaming revenue is earned in a few ways that are slightly different, but very similar overall. In order to enter a DFS contest, a customer must pay an entry fee. DFS revenue is generated from these entry fees collected, net of prize payouts and customer incentives awarded to users. In order to place a sports bet (sports gambling), a customer places a wager with a DK Sportsbook. The DK Sportsbook sets odds for each wager that builds in a theoretical margin allowing DK to profit. Sports gambling revenue is generated from wagers collected from customers, net of payouts and incentives awarded to winning customers. The last form of online gaming revenue is earned in similar fashion to a land-based casino, offering online versions of casino games such as blackjack, roulette, and slot machines.
Gaming Software (18% of Total Revenue for 9 months ended 9/30/20):
While the Online Gaming revenue stream mentioned above is a Business to Consumer (B2C) model, the Gaming Software revenue stream is a Business to Business (B2B) model. The Gaming Software side of the business was born out of the acquisition of SBTech, a company from the Isle of Man (near the UK) founded in 2007 that has 12+ years of experience providing online sports betting platforms to clients all over the world. The acquisition occurred as part of the SPAC driven IPO in April of 2020 that combined “the old DK company” with SBTech so that they now are “the new DK company” listed as DKNG on the NASDAQ. SBTech is a far more important part of the story than just being 18% of today’s revenue. The reason for this is because DK will eventually (planned mid-late 2021) be migrating all of their DFS and gambling offerings onto SBTech’s online platforms. Currently, for DFS, DK uses their own proprietary platform but that will move to SBTech with the migration. Currently, for online gambling, DK uses Kambi, the same online gambling platform that services Penn Gaming (PENN), a DK rival. But that’s enough about the software migration for now, back to the Gaming Software revenue.
The Gaming Software revenue stream for DK is essentially a continuation of SBTechs’ B2B business model. DK contracts with business customers to provide sports and casino betting software solutions. DK typically enters two different type of arrangements with B2B customers when selling the gaming software:

1. Direct Customer Contract Revenue: In this type of transaction, the software is sold directly to a business (casino for example) that wants to use the software for their own gambling operations. This revenue is generally calculated as a percentage of the wagering revenue generated by the business customer using DK’s software and is recognized in the periods in which those wagering and related activities conclude.
2. Reseller Arrangement Revenue: In this type of transaction, DK provides distributors with the right to resell DK’s software-as-a-service offering to their clients, using their own infrastructure. In reseller arrangements, revenue is generally calculated via a fixed monthly fee and an additional monthly fee which varies based on the number of gaming operators to whom each reseller sub-licenses DK’s software.

As mentioned above, SBTech was an international company based in the Isle of Man before being acquired by DK. Thus, the majority of their business in their first 12 years of operating independently has always been international and outside of the United States. This has helped DK, which has historically been US focused, expand it’s international reach.
A perfect example of expanding this international reach occurred recently during October (technically Q4) in which DK’s B2B technology (powered by SBTech) helped enable the launch of “PalaceBet”, a new mobile and online sportsbook offering from Peermont, a South Africa based resort and casino company. The deal was headed by DK’s new Chief International Officer, Shay Berka, who previously spent 10 years working for SBTech as CFO and General Manager. Mr. Berka took on the role of DK’s Chief International Officer upon the merger in April earlier this year. I think this deal shows that DK has integrated SBTech and it’s business very well into the larger business as a whole. They are not wasting any time using their newly acquired resources to expand their reach and bring in new sources of revenue.
This is the end of my first article about DK. My goal is to drop Part 2 later this week. The focus of Part 2 will be an in depth answer of the question – “Can we 10x from here?”
Disclosure: I am/we are long DKNG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

I wrote a comment the other day giving my guidelines on investing in VC funds having raised seed, series A, and series B at a startup with a couple of other co-founders.
I became preoccupied trying to find some more insights into the returns of Venture Capital as an Asset Class.
It's incredibly hard to find specific data on venture capital returns as funds don't openly publish this information. The best information I've found is AngelList's December 2019 paper that discuss the returns of 684 non-negative investments here:
https://angel.co/pdf/growth.pdf

Paper TL;DR

The TL;DR of the paper is venture capital is really two asset classes: Seed, Series A, and Series B is one asset class, then late stage Series C+ is a slower growth oriented asset class.
The summary statistics of the winning investments (keep in mind they don't at all talk about the losing investments which is BS):

	IRR	Multiple	Effective Duration
Minimum	+0%	1.0x	0.4
Median	+21%	1.7x	3.0
Mean	+35%	2.7x	3.1
Maximum	+520%	115x	6.4

IRR are in percentages per year (i.e., "p.a"). Effective durations are in years.

Later on, AngelList makes this statement:

This seems to be the case in venture capital as currently constituted; roughly half of the venture investments that we studied lose money.

The paper's suggestion is to treat seed rounds as lottery tickets, and Series A and Series B rounds may provide desirable effects to one's portfolio. Later stage investments are lower returns mostly due to companies staying private longer and longer.

Efficient Frontier Math of a VC Fund

At this point I'd like to adjust the Median and Mean IRR for losing money, then plot an efficient frontier graph to a 100% stocks portfolio. Quite frankly, I'm not sure how to make that adjustment. Not every investment that loses money goes to $0 after all, but definitely a much higher percentage in venture capital. There can be exits of "acqui-hires" and certainly there is value built up in a team. I'm disappointed AngelList didn't cover this area but this paper is certainly a marketing piece for their platform and NOT investment advice. I'm also disappointed that AngelList while talked about volatility but they didn't give any standard deviation metrics.
So I'll take a wild ass guess and halve the Median and Mean IRRs to adjust for the losing investments. Then for standard deviation of venture capital you'll find papers all over with a wide variety of guesses - highest I've read was 100% (lol), lowest was 21% (lol), one that made a strong case it closely mirrors US. Small-cap Growth Stocks, which makes logical sense as that's the closest public asset class one can get to.
So I'll use portfolio visualizer to make a efficient frontier from Jan 1972-Dec 2020 of 100% US stock market to US Small-cap Growth Stocks. Results
So over the time period 100% US Total Stock market has a 12.0% expected return, 15.65% standard deviation, and Small Cap Growth is 13.01% expected return, and 21.31% standard deviation. The Tangency Portfolio is 100% US Total Stock market according to PV, lol. Sharpe ratio of 0.47.
So now accounting for losses, we possibly have VC as an asset class of median of 10.5%, mean of 17.5%, and let's estimate a standard deviation of 30%. We know a median of 10.5% wouldn't be interesting to graph as the tangency portfolio will still be US Total Stock Market. So, let's say you use your connections and get into one of the hit firms as a LP as the paper quoted:

The heart of the venture business is being able to separate signal from noise, rolling up your sleeves and working with the entrepreneur to build something successful. Is there any coincidence that Yahoo, Google, YouTube and so many of these “hits” have come from a handful of firms? Certainly timing and luck play a huge part in our business, but minimizing it to a seat at a roulette table is a shame.

So what does the efficient frontier look like with US Total Stock Market and pretending you lucked into the better VC firms and have 17.5% average annual expected return, but with a standard deviation of 30% since it's private Series A/B investments?

Pretty Pictures: VTSAX / Venture Capital Efficient Frontier Graph

https://i.imgur.com/rq7pfOl.png
Pretty much linear under these generous assumptions. So it seems like the tangency portfolio of Venture Capital to 100% stocks is according to your risk tolerance and liquidity lockup tolerance. Unfortunately though, there is no tangency portfolio - an optimal allocation of venture capital does not exist with these assumptions I've made. Thus, it appears you're not being rewarded for the extra risk you're taking, and fortunately, not being penalized for it either. Just on this initial pass - it appears that the capital markets are efficient and have arbitraged the risk premiums away.
If you add on bonds to it then the tangency portfolio contains 0% of venture capital.

Why I'm avoiding VC Funds

Now, this is why I'm avoiding investing in VC firms and instead invest in Hedgefundie's UPRO/TMF portfolio. If you plot SPY/TLT at 55%/45% it's the tangency portfolio of SPY and TLT. You have an expected return of 12.28%, standard deviation of 7.16% and a Sharpe ratio of 1.64, which clearly beats 100% VTSAX. I used to be in 100% stocks. I'd rather have that portfolio as it's the same expected return, but a lot less volatility and drawdown risk. It's such a much better Sharpe ratio too - it's 3x less risky.
Meaning - if I'm okay with sleeping at night with the same risk and drawdown risk of 100% stocks, I can lever it 3x (using UPRO and TMF). 3x is about the max leverage, take the 1.50 Sharpe divided by say 0.50 of 100% stocks and you get 3x. If 100% stocks is too much, you can leverage it 2x instead of course, and unleveraged is phenomenal still. Unlike with Venture Capital funds, I am being rewarded with the extra risk I'm taking by leveraging up this portfolio.
Efficient Frontier of UPRO and TMF
Expected return of 35% and a 22% standard deviation. (Note: Hedgefundie modeled UPRO/TMF from 1986-onwards and the expected return varies between 18% on the low end, with 35% on the high end, with about the same 22% standard deviation had UPRO/TMF been around historically past then.)
Finally, Sharpe ratios are really old school, and they penalize both gains, and losses equally. I really wish people will start using Sortino ratios instead. Sortino ratios penalize losses but not gains, and 55% UPRO/55% TMF (55% SPY/45% TLT) both have a 3.0 Sortino ratio. (Like Sharpe ratios, Sortino ratios doesn't change with leverage.)

Final TL;DR

Playing Hedgefundies >>> VC with your risk capital.
Choose your own desired allocation of 100% stocks to Venture Capital. You're not being awarded extra for the risk you're taking, nor are you being penalized for the risk. It appears the capital markets have arbitraged the risk premium out of Venture Capital. Keep in mind most funds have a 10 year lockup, so I'd keep it at most to a modest allocation.

I worked at a tattoo shop in Arizona, across the river from Laughlin NV. It was February and people were spending tax returns on tattoos, I don't remember the exact day but it was crazy busy. I got stuck with a family and tattooed until about 3am. They were generous, after all said and done I had $2000+ dollars. My wife had been waiting all night for me so in a spur of the moment decision we decided to go across the river to the casinos and spend money! I don't gamble, don't really drink and just never been interested in that stuff, but that night it sounded fun. As soon as we got out of the car at the first casino is when I noticed things were odd. The valet runs up to me and looks kinda confused why I'm in my car... like he even looked at my car and made a joke about "oh, this way you can probably just drive around". I was even more confused, I told him I would park my own car and did so. As we walked into the casino people were looking at me, like backing up and making room for me to walk by and nodding at me and just acting weird. My wife was like "WTF man? Why is everyone treating you like this?" At first I wrote it off to people just being nice and doing their jobs and whatnot. But it kept getting weirder... people kept staring at me and holding doors. My wife is asking me if I have some secret life or something?? It didn't register at the time, but one of the bartenders said "it's strange to see you here this time of day". It was like 4am, I thought it was small talk. For hours I gambled roulette and kept winning, I never played roulette in my life. All night/morning people kept staring at me, looking away when I locked eyes. I even like walked up to some dude that was looking at me and said "what's up?" And he was like " oh hey bro I just noticed you I'm sorry"...I was shocked, this guy was legit nervous to be talking to me. I'm not famous, or a gangster, or nothing. We thought maybe because I tattooed a lot of people, but I usually recognize clients and they always treat me like a friend. I saw this weird old slot machine that only gave away silver dollars, but it only took silver dollars. I was excited, so I went to find where I could get silver dollars to put in the machine and the cashier was like " wha?" I told her it was for the machine and she was adamant that there is no machine like that...I went back to find it and couldn't. It was gone... people started bumping into me and when I looked at them nobody cares anymore. I think I was the doppleganger, there were more little experiences but in a nutshell that's it. It seemed to end also when I noticed the daylight...I don't know...I've been thinking about it for a long time and it still bothers me. I don't look like anyone famous or infamous, I actually have a piercing through the bridge of my nose that makes me fairly unique and would be hard to get confused with someone else. Is this considered a glitch? Like I said there's more to it, I'm not sure if I'm the right place but I'll answer any questions I can. Thanks for your time.

TL:DR

• This is Part 1 of my two part deep dive on DraftKings (Ticker: DKNG, I will refer to the company as “DK”)
• This first part introduces you to (1) me, (2) the company, (3) my thesis on the company, and (4) digs into how they make money.
• The second part (to be released later this week) will go in depth to explore the question “Can we 10x from here?”
• DK is an exciting, disruptive company working to change how we experience watching sports and make it better.
• I am not a financial advisor and this is not investment advice. These are just my opinions to help facilitate learning and discussion.

Hello, welcome to my first deep dive write up.
My name’s Mark and I’m an accountant with a passion for investing. About two years ago, I used to work as an auditor at a public accounting firm and have been behind the scenes at many different publicly traded and privately held companies in the U.S. My goal is to bring my unique perspective from that past experience, my current experience working in a new role at a large corporation, and my understanding of accounting to help break down some of the most exciting growth stocks on the market today.
I’m a long-term investor. I am focused on finding great companies and holding them for a long time. I’m willing to endure volatility, crazy price drops, and everything that comes with this approach as long as the facts that led me to originally invest and believe in that company have not changed. If you want to learn more about this approach. I recommend reading the book “100 Baggers” by Chris Mayer.
Introduction
I think it’s fitting that my first stock pick has to do with sports. Sports has been a part of my life since I could walk at the age of 2. First with baseball and soccer, and then later in my childhood with golf. I’ve always played American football and basketball for fun as well and have always been an avid fan of all the major sports in the US.
I started playing fantasy sports (mostly just fantasy football) about 6 years ago and have always enjoyed it. Traditionally, with fantasy football you draft a team at the beginning of the year and those are your players for the rest of the season. If you have a bad draft, oh well. You can try to improve your team with trades and free agent additions but it is tough. Leagues usually consist of 10-14 teams (each managed by an individual) and there’s obviously only one winner at the end of the season (about 4 months after the draft). This can lead to the managers of the lower performing teams losing interest as the season wanes on. I believe DraftKings’ (DK) founders saw this issue and saw an opportunity. Enter, daily fantasy sports. Now, with the DK platform you can draft a new team every week. Or if you want, every day. This allows fans of fantasy sports to engage at whichever point of the season they want and at varying financial stakes.
The Thesis Statement
For every stock pick I make, I want to provide a quick thesis statement that can serve as a reminder for why I’m buying and holding that stock for the long term. I’ll always aim to make it just a few sentences long so it can easily be remembered and internalized. This helps during times when the price may sporadically drop and you need to remember why you’re holding this position.
The thesis statement I have come up with for DK is as follows:
“DraftKings: The leader in allowing fans to engage financially with their favorite sports, teams, and players. Having money at stake makes the game a lot more interesting to watch. The era of daily fantasy sports games, online sports betting, and online betting (outside of sports), is just getting started and DK is as well positioned (or better positioned) than anyone to capitalize off of this trend.”
Notice how I said “allowing fans to engage financially” as the first sentence and not necessarily “allowing fans to gamble”. There’s a reason for that. According to US Federal Law, Daily Fantasy Sports (DFS) contests have specifically been exempted from the prohibitions of the Unlawful Internet Gambling Enforcement Act (UIGEA). DK has always been, and I believe will continue to be DFS contests 1st, sports betting 2nd, and other forms of gambling/entertainment 3rd. It is noteworthy that states at an individual level can still deem DFS contests illegal if they so wish, but as of this writing (11/26/20), 43 of the 50 US States allow DFS contests and DK, accordingly, is offering DFS contests in all 43 of those US States.
I’ll try to clarify the difference between DFS contests and sports betting real quick:
DFS Contest – Pay a pre-set entry fee to enter a contest. All entry fees go towards “The Pot”. “Draft” 9 players to be on your “Team” for 1 week. Enter your “Roster” into a contest with other players (could range from 1 other person to 1,000s of people, the DK user can choose). Whichever “Roster” amasses the most points for that week out of all contestants wins. The winner will get the highest payout, and depending on the nature of the contest, other top finishers will receive smaller payouts as well.
Sports Gambling – Team A is considered a 10 point favorite to defeat Team B. This means that Team A is expected, by the professional gambling line setters, to outscore Team B by 10 points. This is known as a point spread. You can bet on the underdog or the favorite. If you bet on the favorite, they have to win by more than 10 points for you to win the bet. If you bet on the underdog, you will win the bet as long as the underdog keeps the game within less than a 10 point defeat.
These are just a couple simple examples to help you see the difference. Sports Gambling (the 2nd priority of DK) is a very lucrative market just as the DFS contests are. However, in the US, Federal Laws and regulations are a lot stricter on Sports Gambling than they are on DFS. As of this writing (11/27/20), 22 states (including the District of Columbia) out of 51 possible allow sports gambling.
DK is still in the infancy stages of getting their sports gambling business going. In the 22 states where they could potentially operate, they currently have a sports gambling offering in 11 of those states. The sports gambling business model for DK can be broken into two main offerings – mobile sports betting, and retail sports betting. Mobile sports betting means you can place a sports bet online from the comfort of your own home, while retail sports betting means you must go to a casino and place a bet with the sportsbook in person. I personally believe mobile sports betting is the real potential cash cow for DK out of the two types of sports betting offerings due to the convenience and ease of access. DK is currently working on and encouraging customers to lobby their state lawmakers to legalize sports gambling in more states.
How DK makes money
At the very least, before you invest in a company, you better understand how they make money. In Chris Mayers’ excellent book, 100 Baggers, that I mentioned above, he continually references top line revenue growth as one of the main common indicators of a possible 100 Bagger. This isn’t to tell you that any stock I pick will be a 100 Bagger just because it has great top line revenue growth, but if I am looking at a growth stock to hold for the long term, revenue growth is one of the first things I look at.
For DK, their means of making money is quite simple. I already went into detail above about DFS Contests and Sports Gambling. In DK’s latest 10-Q filing with the SEC (filed 11/13/20), revenue is broken out into two main streams: Online Gaming and Gaming Software.
Online Gaming (82% of Total Revenue for 9 months ended 9/30/20):
Online gaming is the true core business of DK and includes the aforementioned DFS Contests, Sports Gambling and additional gambling (non-sports) opportunities. DK refers to their additional gambling (non-sports) as “iGaming” or “online casino”.
For the 9 months ended 9/30/20, Online Gaming revenue totaled $239M, up 30% YoY from $184M in the same prior year period. Keep in mind, that this is an increase that happened during a COVID-19 global pandemic that delayed and shortened many professional sports seasons.
Online gaming revenue is earned in a few ways that are slightly different, but very similar overall. In order to enter a DFS contest, a customer must pay an entry fee. DFS revenue is generated from these entry fees collected, net of prize payouts and customer incentives awarded to users. In order to place a sports bet (sports gambling), a customer places a wager with a DK Sportsbook. The DK Sportsbook sets odds for each wager that builds in a theoretical margin allowing DK to profit. Sports gambling revenue is generated from wagers collected from customers, net of payouts and incentives awarded to winning customers. The last form of online gaming revenue is earned in similar fashion to a land-based casino, offering online versions of casino games such as blackjack, roulette, and slot machines.
Gaming Software (18% of Total Revenue for 9 months ended 9/30/20):
While the Online Gaming revenue stream mentioned above is a Business to Consumer (B2C) model, the Gaming Software revenue stream is a Business to Business (B2B) model. The Gaming Software side of the business was born out of the acquisition of SBTech, a company from the Isle of Man (near the UK) founded in 2007 that has 12+ years of experience providing online sports betting platforms to clients all over the world. The acquisition occurred as part of the SPAC driven IPO in April of 2020 that combined “the old DK company” with SBTech so that they now are “the new DK company” listed as DKNG on the NASDAQ. SBTech is a far more important part of the story than just being 18% of today’s revenue. The reason for this is because DK will eventually (planned mid-late 2021) be migrating all of their DFS and gambling offerings onto SBTech’s online platforms. Currently, for DFS, DK uses their own proprietary platform but that will move to SBTech with the migration. Currently, for online gambling, DK uses Kambi, the same online gambling platform that services Penn Gaming (PENN), a DK rival. But that’s enough about the software migration for now, back to the Gaming Software revenue.
The Gaming Software revenue stream for DK is essentially a continuation of SBTechs’ B2B business model. DK contracts with business customers to provide sports and casino betting software solutions. DK typically enters two different type of arrangements with B2B customers when selling the gaming software:
​

1. Direct Customer Contract Revenue: In this type of transaction, the software is sold directly to a business (casino for example) that wants to use the software for their own gambling operations. This revenue is generally calculated as a percentage of the wagering revenue generated by the business customer using DK’s software and is recognized in the periods in which those wagering and related activities conclude.
2. Reseller Arrangement Revenue: In this type of transaction, DK provides distributors with the right to resell DK’s software-as-a-service offering to their clients, using their own infrastructure. In reseller arrangements, revenue is generally calculated via a fixed monthly fee and an additional monthly fee which varies based on the number of gaming operators to whom each reseller sub-licenses DK’s software.

As mentioned above, SBTech was an international company based in the Isle of Man before being acquired by DK. Thus, the majority of their business in their first 12 years of operating independently has always been international and outside of the United States. This has helped DK, which has historically been US focused, expand it’s international reach.
A perfect example of expanding this international reach occurred recently during October (technically Q4) in which DK’s B2B technology (powered by SBTech) helped enable the launch of “PalaceBet”, a new mobile and online sportsbook offering from Peermont, a South Africa based resort and casino company. The deal was headed by DK’s new Chief International Officer, Shay Berka, who previously spent 10 years working for SBTech as CFO and General Manager. Mr. Berka took on the role of DK’s Chief International Officer upon the merger in April earlier this year. I think this deal shows that DK has integrated SBTech and it’s business very well into the larger business as a whole. They are not wasting any time using their newly acquired resources to expand their reach and bring in new sources of revenue.
This is the end of my first article about DK. My goal is to drop Part 2 later this week. The focus of Part 2 will be an in depth answer of the question – “Can we 10x from here?”
Disclosure: I am/we are long DKNG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Whaddup cock womblers, its ya boy, Chingy, back once again to inquire about about the length of yo chain and its mineral composition. I'm a proud member of the WSB weekend squad -- we're like the Tuesday afternoon squad at a strip club, so don't expect to get a lap dance from Carmen Electra circa 2003. I don't even know how to show you my crayon collection. But I don't usually have time to write DD's while I'm flipping burgers at Wendy's 9-5, so this is what you get.
My last post caused me to get DMed some smart questions, and some not-so-smart questions. So, because it's cold af outside and I can't stand any weather that's too cold for flip flops, I stayed my ass in my fortress of solitude, surrounded by my jizz rags, the whole damn weekend thinking about this play. If you're illiterate or need TL;DRs and rocket emojis, then pass by. If you're looking to play weeklies and other FDs, then pass by. I do have some moonshot plays I'm doing as well, and if ya'll yodel on my chode enough, I might tell you about them, but no, this DD is for 1/3 of the centerpiece of my 2021 play. That's right, I actually try and plan moves a year out and then measure the results over weeks rather than fucking minutes, you fucking head-trauma goldfish.
Basically, my play breaks down into 3 segments: Smokestacks, Ships, and Mines. I'll break down my DD on smokestacks with some of my top picks here. If ya'll want, I'll do Part 2 and 3 for Ships and Mines, but shit would be too long if I did it all at the same time, and I know many of you are already glossy eyed over this wall of text. My last post was directed at MT gang, because they were seeing what I am seeing but let's have a quick re-cap to the current situation, the past, and the future so that you can understand the macroeconomic context of this play.
The Prologue
Let's start in 2018. We could go back further, and for some of the stocks in Part 2 and 3, we will, but 2018 is a good place to start. What happened in 2018? Well, something pretty major, something pretty fucking epically stupid which will likely be corrected in the near term and bring us tendies in the long-term. Metals began a pretty gnarly slump in early 2018, and that slump drug a lot of things down; the whole materials sector flopped, dry goods shippers and bulkers flopped, mines flopped. It was shit show. Why? Trump put his retarded ass tariffs in place. They didn't do shit except cause the market to go down faster than a Kentucky truck stop whore. Even if you look at US Steel, it spiked after the announcement, then sank with the rest of the market. Why? Because increased costs tanked demand. This is proof that just because someone knows how to get slack-jawed cousin fuckers to part with their money for some magical red hats, that they don't know fuck all about economics. Now, what you may not know is that those tariffs applied to things besides steel too, basically all the metals, and we're going to be picking up on all of that. Love it or hate it, Biden is an old-school free-trade neo-liberal, and he's going to get rid of that dumbass tariff, and that means more money moving in the market, which means more tendies for us. In removing the tariff, other countries will likely also remove their tariffs on American materials, so everyone wins and can have a big old globalist circle jerk about it, but my money is on the European and South American materials makers.
In fact, I only have two American steel stocks in my play because Trump's retard tariff caused more harm to American industry than to global industry. How? The rest of the world kept trading with each other and we got locked out, so in a recovery play, I'm looking at companies that have fewer barriers to global market, existing global orders, and companies who don't have to start from scratch in re-joining the global recovery, which excludes most American companies because holy fuck did Trump screw the pooch and provide a lovely gift to everyone who isn't American. Removing the tariffs is also going to cause pain to American steel because their safety blanket get pulled away - a problem foreign metal won't have. Yes, yes, American steel like X and CFL will do alright too long-term, but they have more headwinds getting back into the global market that the tariffs made them uncompetitive in. Another consequence of the tariffs is that they didn't actually touch raw iron ore, whose prices remained fairly high, thus pushing the cost of of American steel comparatively higher, giving a double whammy to the cost of American steel compared to others who were moving downwards faster, thus shifting demand to countries that didn't have tariffs.
The Play (well...one third of it)
So let's have a look at who is in my play. I call this the "Smokestacks" segment, this is where the raw ore gets turned into something useful. I'll give you the ticker symbol, my positions, and a quick reason why I like it besides the other reasons I mention in this post. So even if you think the tariffs will stay, there's other good reasons to look at these.
MT ( July 24c & shares). Weekly moving average has been on a steep climb since end of October. Lots of room to recover. 3 recent price increases on its products. It's a meme.
AA (July 23c & shares) Weekly moving average has been on a steep climb since end of October. Lots of room to recover. Curtailment of mass layoffs. Aluminum prices also on rebound. Actually engaging in some sustainability efforts, which may get favorable treatment from eco-conscious buyers. All facilities 100% operational.
STLD (Jan 2022 37c & shares). Weekly moving average has been on a steep climb since end of October. Upcoming Texas expansion. TSLA cybertruck steel supplier
T K A M Y (Shares) Weekly moving average has been on a steep climb since end of October. Lots of room to recover. Exposure to maritime market will allow it to catch the wave as cruise ships return to service and shippers upgrade and repair their fleets. Look for lots of drydock repairs in Q4 2021 to continue to lift the value
A N I O Y (Shares). I don't really have a reason to include this one besides the basic reasons of this DD, but everything else is pretty slow and steady, so I thought I should include one roulette/heart-attack stock.
CMC (June 20c & shares) I wouldn't buy into this at the moment of publication of this DD, wait for it to dip and for that weekly moving average to get back above the market price. I think it's got another 10%-15% of growth in it and it wouldn't be as hard hit by tariff removal due to presence in other markets (it's the only other American company on my list for that reason, but there's a reason I'm generally bearish on American steel) Tariff removal is going to be good for metals, but not necessarily American ones, at least in the short-term, but I think this one will weather it a bit better.
TX (May 30c & shares). Just look at that weekly moving average. Still has about 33% room for recovery. Integrating AI into production management.
SID (June 4c & shares). This one actually was a rocket, and I expect growth to slow a bit short term, but ITM calls are still cheap, although I'd wait for a pullback. But it's doing well, considering doing a separate IPO for their mining unit, which, by the way, is another reason I like this one, it straddles both the smokestacks and mining Segment. Ore prices have remained high despite metals slump, so since they are in both ore and metals, I like them for growth beyond recovery.
G M B X F (Shares). I am hesitant to include this in the smokestacks segment rather than the mines segment, but they're pretty well vertically integrated, so I'll include them in both. Copper market is an undervalued play as well, and these guys are one of the big dicks in that arena. I'll expand my thoughts on this one and other miners like VALE, SCCO, and RIO in Part 3.
Breaking it Down, Pepe Silvia Style
So let's look at these real quick. I've got positions in all of them, but maybe you don't want go as deep on the chain as I have, so do your own DD and figure out which you like. Most of these are non-American (STLD and CMC being the exceptions). As I mentioned above, I'm more bullish on foreign metals because the removal of the tariffs is going to have a bigger, positive impact on them, while removing the tariffs will initially have a negative impact on American steel. I'm also more bullish on foreign metals because they've been able to continue to trade in each others markets and thus have less catching-up to do in the recovery. Why did I include STLD and CMC? I like STLD because they seem to be in a growth phase right now, I'm looking for an expansion in Texas to potentially break ground in 2021, and I like CMC because they have more foreign exposure than many of their US competitors (they're a member of EuroFER, for example, X is the only other US member of that, and it's just a small Polish subsidiary).
Before getting into when you can expect tendies, let's revisit the current situation and look towards the future to understand why I'm bullish on metals at all, and foreign ones in particular. As mentioned, we all now know that the Tantrump Tariff was a shit show that brought the market down by artificially spiking prices (2018) and that depressed demand (2018 & 2019), which ultimately drove down the prices to the shithole they've been in. Then, the pandemic hit and really hammered on it. But, the demand never really went away, it just went into hibernation. 2018-2019 saw major slow downs in domestic industrial growth; fewer and smaller expansions and some pretty large ones that were canceled outright. From my professional experience (I'm an economic developer for the G men), I can tell you that 2018 was the worst year we had. I usually shuffle 3-4 projects across my desk a month, we had 3 the entire year of 2018. Shit was grim. I even visited Europe to go talk to the companies and ask them why they were pulling out, "we'll call you in 2 years" is what they said. And guess what cock goblins!? They have! All the companies I was courting had the need and desire to expand, but backed off because of what was going on in the market, their ROI would've been too low to cover the debt of their expansions because the cost for those expansions had magically gone up overnight thanks to the fart bubble muncher in the White House. So you may be wondering, "but if steel prices are going up again, why are industrials pulling the trigger on expansions now?" Good question, retard! Part of the answer is that they've been sitting on cash for 2 years that they otherwise would've invested in growth, part of the answer is that steel prices are now naturally rising (due to the scaling back of production capacity since 2018) and thus unlikely to be waited out, and they are still lower than before the whole tariff fiasco started, and removing the tariff would keep some downward pressure on prices while juicing demand. Basically, when the price of metals artificially spiked due to the tariffs, it made sense to try and wait them out, but to those who were mining and making the metals, it meant they suddenly had a big drop in anticipated demand, and so they had to scale back, but keep their prices up. But like I said, the demand didn't die, it just wanted to wait for a better time. Now we're in an interesting situation; prices are rising naturally due to that pent-up demand and deferred growth wanting to come out, the scale back in production capacity has created a premium on what can be produced, and future economic conditions are better for it, especially since Biden is more likely to re-engage in free-trade than whatever retarded-ass protectionist nonsense the village idiot of Mar-a-Lago was doing to gin up the mouth-breathers. But the production capacity needs to recover and then keep growing to meet demand, and that's where we get on.
The Payoff
So what does all of that mean for your tendies? Well, it means that the the whole supply chain that has been running a skeleton crew for the past 2 years is about to wake the fuck up. Demand from 2 years ago is re-entering the pipeline, natural growth is starting to show back up, those retard tariffs are probably on their way out. For the life of me, I can't explain how real estate has weathered the pandemic so well, but it has, and that sustained demand is part of what is driving up the cost on structural steel. Shit. Those prices are going up so fast even shippers are scrapping their old ships to get in on it. I'll discuss this more in Part 2 and why it means dry goods shippers and bulkers are gonna be in victory lane as well, but that's for next time. For now, let's stick to how we're going to make money off the smokestacks.
The first thing to note here, and I'll even bold it, is: THIS IS NOT A ROCKET. If you're gonna choose an emoji, find a freight train (also in Part 2). Alright? Don't be asking me if January calls are what you should get, because the answer is no unless you're talking about 2022. No, this is a long ass train, loaded with tendies, slowly heading up the green dollar hills towards you. All you gotta do is put money in and wait. If you're looking for FDs and quickly flipping shit, you might get lucky with some of these companies, but for the most part, all you gotta do is wait. Trust me, I know how difficult that can be when you're addicted to refreshing your account between every tug on your dick, but that's what this calls for. That means set your charts to daily or weekly and don't worry about a red day, there will be some of those along the way, maybe even red weeks, especially if some other populist cock gobbler decides to throw a wrench into the global economy or China does something retarded. Don't even worry about it until its warm enough to start breaking out flip flops again. Alright? Steel hands guys, steel hands. This isn't tech where you throw up a couple more servers, hire more people, and suddenly call yourself scaled up. No, it takes a long time for iron to be busted out of a mine, get shipped, be processed, and sold. So this isn't a good candidate for YOLO unless you don't mind watching a YOLO in slow motion. No, this is a tycoon play where you put your money on the train and wait for it to arrive.
Personally? I think end of Q2 and Q3 is where you'll see today's market catalysts show up as earnings, my earliest position is for May, and even that makes me a little nervous for how soon it really is, but I think that's when the feasting might start showing up in reports and I see it going well into 2022.
TL;DR We gonna make money like a freight train; slow, steady, and loaded with more tendies than any rocket can carry. If you wanna hop on the freight train like some fucking hobo, then join Tycoon Gang. If you want to see my DD for Ships/Trains, Mines, and maybe even one for industrial services/suppliers, just call me autistic, not retarded. Also, if you think I've missed any good smokestack plays, drop them below.