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at 10:35AM PST on February 9, 2008.
I don't think there needs to be any solution, because I don't believe there is truly a problem. Stocks can get seemingly ridiculously overvalued in play money prediction markets as well as in real money financial markets. The fact of the matter is that bubbles and crashes will and do happen and they will happen again and again in the future.
It doesn't matter how much money top players have and it doesn't matter good the big money players think they are, vast misjudgements in valuation by the market as a whole will occur. Institutional money, supposedly the smart money on Wall St, controls the majority of the stock market and that didn't stop tech stocks from going crazy in 2000, it didn't stop housing stocks in 2007, and it won't stop the next bubble. I don't think restricting money to new players on the SimExchange markets will do anything to prevent stocks from getting overvalued.
This is just a part of life in any free market and the idea that bubbles
be happening again here on the SimExchange actually reaffirms my faith in these markets and I don't think it reflects poorly on how things are working on the SimExchange at all. If they didn't happen from time to time that would actually make me more suspicious that things were not working and perhaps were being controlled by something else besides a free market.
Prediction markets like the SimExchange are not perfect, but they have been proven over time to be a better indicator of the future than any one analyst.
In my opinion it is much more difficult to make money going short stocks right now than it was in the past. This is not because you have to "fight the crowd" as you put it, but rather because the crowd is now with you and is also heavily short. Just look at the portfolios of most of the top 25, they are filled with short position after short position. When everybody is already going short who will be left to sell after you? It gets harder to make money when everyone is doing the same thing as yourself. Personally I made my best gains going short when there were only a few other people doing it.
In my opinion I think there is real money to be made by being a contrarian and going against market trends. Perhaps instead of looking for overvaluation and sticking to futures you might want to do the complete opposite and and look for undervalued games in the GLS market.
Thanks for understanding. Although I don't agree with you that there is a problem with GLS stocks it's nice to know that some people can see that I am sometimes unfairly called out. I know I occupy a prominent spot in the lifetime rankings but rarely do I ever see anybody else who is constantly forced to justify their positions.
I think some people believe that since I've built a relatively large lead that I can somehow control and manipulate this market which is absolutely wrong. It is true that can exert more influence than others but frankly if I am wrong and the market goes against me there is very little that I could do about it.
For example I wish I could undo all of my past Call of Duty 4 (XB360) trades or somehow send that stock down. Those who are observant may have noticed that I have had a very large short position in this stock for a very long time maybe 5-6 months and where has that stock gone in that time, no where but up. In fact I still have a huge short position in it because there is not much I can do to unload it, one of the drawbacks of a large portfolio. By my estimates I have lost somewhere between 7-10 million DKP in the various CoD4 GLS stocks and futures.
Frankly I am just tired of people saying I can do whatever I want rational or not, it cheapens the image of the SimExchange. I'd just like to say again I am not the market, I do not control where prices go and I can only influence stocks to a certain degree. Just like everyone else I hope I am right.
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