I see this narrative around a lot and I don't quite get it. I get how you have high revenues based on deal making but isn't that offsetby expenditures if you're doing a circular seal?
Lets say we have companies A, B, C doing the circle thing. A gives B 10$ for a deal, B gives C the 10$ they got for a deal, then C makes a deal with A, giving A 10$ for the deal.
While each company is receiving 10$ on the deal, they're also spending their 10$ on the next deal. So isn't all their net profit 0?
Crash market, average retail investor shits themselves, presses the sell button, gets liquidated, or interprets this as the new recession and buys puts / goes short. By the time the realization comes that it’s not going that way,
you either
A) got liquidated and have no cash to reinvest in the way up
B) sold friday and are waiting for settled funds to arrive on Monday in order to go long, which will not arrive until Tuesday so you will miss out on the up action
C) Are in a short position that, once you sell, you go back to B and wait for your settled funds while the market adjusts upwards today.
The amount of people in this sub who:
A. Are not aware the market is open today
B. Are not aware it is a bank holiday and funds from Friday sales won't settle
..Is absolutely alarming to me.
I made the equivalent of \~5 years of savings in the span of a few months. NGL It makes it very difficult now to ignore the stock market and focus on my work. Now I have FOMO b/c I liquidated everything 2 weeks back. Not sure how to deal