What's going on everybody we're waiting for patrick to join the stream and he's accidentally joined the wrong thing, so i'm going to wait for him in just a second and what's going on everybody how's everybody doing, let me know in the chat what's going on dp, what's Going on ev bike: let's get it hey. Let me know if you guys can hear me while we wait for for patrick here we go patrick. Is here? Oh sorry about that, you joined the wrong thing. You know well it's funny, because the message came on twitter, which i just had on my phone rather than on the uh on my computer.

So it took me a few seconds. You literally commented on the same thing i put like i'm in the zoom. I was like how what's going on not too much all as well has everything there. Your quality of studio has improved so much over the past few months.

It's unbelievable. You know it's mainly just it's a new camera and a new microphone, and actually it's all about the camera. I think more than anything. So we have a lot to talk about today.

Some insanity going on uh before we start a huge shout out to super donkey with the with the phenomenal name. Here comes the rambling show. Oh brother uh he's ref he's referring to matt kors, i think did. Did you see my interview with matt kors, the guy from mc um? You know i missed that one.

I didn't see that very smart guy. I was really impressed. Tell me about what happened, so he is kind of the the person who started this whole amc movement or he's one of the fir initial ones um and he's a really level-headed guy. Very pragmatic, uh he's not hyping up nothing and and really knows the stuff knows.

The numbers knows what he doesn't know. It doesn't comment and then okay, pretty much the correlation minus one to me. So i had a lot had a lot of fun. He broke the he broke the studio we had like 6 000 people in the stream and he's pulling joe rogan numbers now, like 50 60 000 concurrent viewers, every stream, wow wow, yeah, big numbers uh.

So, first of all, let's say hello to some people in the room: uh! That's for you, patrick here you go i'll. Do the same thing for you as well. Stay stay sitting tom! Don't get up! No! I have pence. I swear.

I just that little movement cost me a little stroke. That's my exercise for today and let's get it two living legends, let's get it uh! We have your friend from from the uk. Sasha in the house is angry for the football i mean i don't care um. You and me don't watch this greetings from l.a.

Let's go naked shorts, it's such a great name. If we ever form a band you and me, we call it. The naked shorts sounds good. I think it's just fair uh.

It's between that or and not the financial advice. It's one of those um we got another donation from yejalma can predict, do a video where he he sees banter going for the next one to five years. Oh that's a great! We never spoke about this. You know the bad thing is.

I know next to nothing about talent here and i don't know much about single stocks like it's kind of the problem is listening to me. It's just it's like listening to someone you meet at the bus, stop on some of those topics like i know certain things and other things i i wouldn't add much value on. So it's such a it's such a divisive stock uh. You either love it or hate it.

It's like boris johnson. You can't stay, you can't ignore it. It makes you feel something or donald trump and okay, so uh yeah volunteer keeps bringing these corn to contracts daily. Every day we hear some about some new contract um.

I'm a huge bull. I don't know if you know this patrick. You should know that i have i've seen uh, you you've almost moved away from dan bilserian towards poland. Here in amsterdam.

You know - and i i think i speak for most of the audience - that we need another dan bilserian video or at least thumbnail. You know you can talk about other things, but just dan bilsarian and the thumbnail prison. The prison thumbnails were so much. I used the same thumbnail for like 47 videos prison.

I do the same thing for amc you're using the same thumbnails yeah. That's like the whole point. That's that's exactly what i'm doing so wes frey says. Oh this dude.

I like this dude, which one there's there's two of us. You need to be more specific, i'm to assume you i'm going to assume you're referring to patrick since the well. He did log into your channel. You know wes if you'd, rather, you could go and watch stuff on my channel while tom and i chat so, let's talk about the phenomena that is what's going on right now, uh.

While i i i highlight some chats just to show you guys some some love here so patrick, is this even the thing in the uk? I mean obviously for those of you who don't know you which i'm assuming they have to live under rock and to be on this channel, not knowing you, but you are the founder of a real hedge fund, not one of those made up ones. You are in academia, your professor, your writer, uh finance uh. How should i put you one of the best finance people definitely on youtube, probably beyond, and you generally know what the you're talking about. Hopefully.

So, having said that, yes, this team member of your community, much like correlation minus one to me - and what do you is this even the thing in the uk i mean you you're located in london - is this something even people talk about as much as you know, It's a funny thing because to be on like i, i got a few uh messages on my channel the other day saying. Why have you not talked about amc and in truth i guess. I just view it as the same story as gamestop, and i kind of did a few game, stop videos and i've. I you know to a certain extent i've kind of moved on for from it um, but i mean in truth, it is just the you know.

The same story same stuff, going on um, you know um, i i it's not it's not that that uh, not much of my day, goes into looking at the news like i mostly actually know about it from your channel and that sort of thing uh. By the way, there's a question here about dark pools: uh you do you have that in your case is it. This is a global thing and it's kind of interesting actually, because it relates to you know. I watched your your video from this morning and it's kind of a funny thing.

The way market microstructure works. Because what happens is you know many of us? We kind of you know we sort of know about the old stock exchange. You know initially people sort of trading stock certificates under a tree in new york and then then they built a building and things got more technically advanced, but not a whole lot more advanced for quite a while, and you know the existence of dark pools and uh. All of this uh, what can i say, sort of non-exchange trading um - is something that kind of came around in the late 1990s, and it's it's very interesting because, right now these firms are looked at as being kind of villainous and, and you know the truth - is That everyone everyone's trying to make money and there's sort of good and bad things about them, but initially what would have happened? You know - and actually i made a video it just touches on it.

But there's one of my old videos called, like i think, day trading in the 90s or something like that sort of talks about how these guys came about. But basically there was this old approach. Where kind of there were the big market makers like big sort of investment bank type firms that made markets in all of the nasdaq stocks, and then there was the new york stock exchange and what happened was that a bunch of kind of smart techy.com type guys Came up with ideas, they basically saw that retail investors were getting screwed by the nicey specialists and by the nasdaq market makers, and they worked out ways around it. You know - and this was even this is kind of where the day trader came from, because these guys, basically there was a piece of software - it's still kind of around called nasdaq level.

Two, and if you were a market maker, you had to register as a market maker and you're allowed to use nasdaq level 2, which showed you the full order book and allowed you to trade in certain ways. And so these guys were licensed as brokers and they kind of were doing some brokerage business. But then they just decided to start trading for their old own account. Using this software, which you weren't really supposed.

In fact, you definitely weren't supposed to do and they even had some funny things where they would. You know, because there was supposed to be a customer behind each order. They would kind of get a bunch of friends and family to invest some money with them and they do these trades kind of for their own account, but they sort of put it in this friends and family customer account. It was really skirting the lawn they did get in trouble for this, but they basically worked out that using the software that the market makers had they were able to take advantage of the market makers and they were able to do all sorts of things um, because How it worked was, usually all of the traits were done over the phone, but nasdaq did require market makers to put a certain number of they had to make a market electronically between themselves for a small number of shares, and so these guys would see the stale Pricing use their software to grab that stale price and basically run it up in the face of these market makers and the market makers, hated them and there's stories of the mar.

You know a lot of them like daytech was the big firm that then went on to be daytech the brokerage, but there's stories of um market makers realizing. You know they've been screwed over 50 times a day by the daytech guys and they come storming across the road into the office and like attack a guy at his desk. You know i mean it was. You know it was pretty crazy, but anyhow at daytech they had some really smart technology, guys.

I think the guy's name was adam levine. He was um. I think he still has a website, but back in 99, when uh, he also has a band called maroon. 5..

Does he no? Oh? Well? No, but he um. He had this live webcam in his office. You know where he was there doing all of his work and you could just log in and watch him working. You know it's kind of an early internet sort of meme thing you know, and so anyhow um.

He basically built an entire exchange off the exchange because he wanted to be able to with their firm date, which which had a then a day. Tech online, which was a retail brokerage. They were able to just cross people's orders in the pool right and if they could cross people's orders, they could give them much better fills than they could get by going to nasdaq. Now, as you can imagine, the guys at nasdaq went insane over this and there was all sorts of legal, wranglings and whatever, but this was sort of the first of the dark pools and there was archipelagos which was just you know, almost a spin-off on the name.

Uh island, which was the original exchange, and so they set up these sort of off uh off market exchanges, basically to give better pricing to themselves and to retail customers. And so that's where this kind of off exchange trading came from and it did actually improve the markets quite a lot, but then, of course, there's always problems because we're adding complexity on top of complexity. So it moved to a point where there's like 20 or 30 different places, you could trade right, which is complicated and then all of the market makers and all of the the um brokerages are the the off-market exchanges basically wanted to attract people to their exchanges and In particular, you know there were certain types of customer, they wanted more than others, and so they they came up with these things. You know they wanted liquidity right, because if you start a new off-market exchange, the problem is: if someone comes to buy there and there's no one they're selling, you don't really have much of an exchange, the classic network effects of uh, exactly yeah, and so they came Up with this idea of having uh, you know - and this is sort of one of the big disasters i think that happened, but on a bit of a whim, i think it was uh.

The this guy levine at ireland came up with this idea that um that that you could have maker and taker that if someone provided liquidity, they would get a rebate from the exchange and, if you sort of reached across the spread to either buy or reach the Crust to spread to sell so it was sort of you were either a maker of liquidity or a taker of liquidity, and so one would pay a fee to the other more complexity. You know which didn't work out to be good and it kind of goes on and on, but all of the big kind of smart quant stock traders got involved in this stuff and what you know, people like bernie madoff, in fact, were also you know they were The first uh market maker to pay for order flow, and that was that was a big deal at the time and that's sort of the problem we're seeing today uh in markets and the question is you know: is that reasonable or not now the thing? That's kind of complicated about this is that how does this work like? Who is hurt and who is not now? The truth is that these market makers or these pools they want to pay for retail order flow. Okay, now you might say why would why do they want to separate retail from institutional and at first your idea might be well it's to rip off the small guy right, but, interestingly enough market makers, they have kind of an interesting business right because you basically register As a market maker and you're able to trade there with the the flow of orders that comes into the market and you put up two prices, the price that you'll buy it and the price that you'll sell at and your goal like. The perfect thing is if the market goes sideways all day, long and you're buying at one price selling at another price, making money all day long.

What goes wrong, though, this is a bit of a pennies in front of a bulldozer problem. Is that once in a while, someone will come in and buy from you, and so you sell it to them, they'll buy again, you sell it to them again now: you're short, okay, they buy again now you're getting shorter. Now you're, like oh, you know. Now now you have to buy right so then you kind of you back off on any offers to sell and you just start crossing the spread yourself in order to buy because you just want to get flat right so what they hate.

What market makers hate is someone who will come in and do that right because they they get caught either short or they get caught along when a big move happens in the market? Now they worked out that the people who were definitely doing this to them were big traders right like if fidelity comes in and fidelity will say on a monday morning to some you know, comes in and they're buying an apple stock might take fidelity a week to Get a fill in apple and they're going to buy, buy, buy, buy and if you're a market maker you're getting hammered by this, because you you just you have to participate. But when you participate, they just hit you again and again, and not only that all you back away on one side, all of the other market makers are kind of backing and that's actually kind of how markets move up or down, but it's unpleasant if you're a Market maker, so they wanted to separate these people because they think of retail traders as sort of random right in that someone's buying someone selling for whatever reason. But they tend not to come in and buy, buy, buy for a whole week and just run you over, and so they actually give better fills, at least in theory. This is the idea behind it, and this is what they'll tell you and it seems reasonable to me.

They'll, give better fills they'll they'll, be more aggressive to get retail order flow. Simply because, wouldn't god be a buyer, one will be a seller and you can deal with them all day long and grind out this profit. But they really hate dealing with kind of the big guys who run over them. And so they want them in separate pools and so citadel will pay robin hood to send stuff their way because that's random and they can make money in that.

But they'll try to avoid you know they don't want, like george soros in there, like you, know, running them flat right, so they want to separate them now. What's happened recently with amc and gamestop and just with kind of the the changes that have occurred in markets. Just the rise of the retail trader um is that retail traders are kind of deciding together, they're sort of coming up with ideas on message, boards and they're they're all going to the market. So suddenly you know robin hood uh that used to feed these guys.

This nice random order flow where one guy's, a buyer, one guy's a seller, and you just get to make you you get to introduce them and make money right suddenly. Now they all turn up and they're all buyers, and these guys are, ah you know so now. They're getting run over by the retail traders, so this is kind of this is sort of where we are with this, and it's something that you know we'll see over time. Like market structure always changes because it's kind of uh like an evolutionary process, it doesn't necessarily mean it always changes for the better, but it always moves such that such that people can survive right, because if the market makers get hammered, the market makers go away.

Market. Doesn't really function, and you know one of the things i i don't know much about this uh. You know the kind of uh uh defy thing with district. You know uh the new ideas for how markets might work, but one of the things that's interesting is possibly eventually the elimination of middlemen.

You know that that kind of might mean that that traders can face each other using some sort of technology. That you know is self-funding, but you know we have to see like it, but it's um right now. I think you know i. I guess that's probably my 20-minute answer to a question of.

Can i explain darkpool so that's sort of where they came from, but they didn't they weren't set up like a lot of people. Look at it today and they go. Oh there's this nasty thing where they're ripping people off, but it's it's a funny thing and there's pros and cons and you're. The thing is that you know whenever you're involved in transactions you're, winning and losing - and you know the other side is always trying to win, and we shouldn't be upset that someone else is trying to win we're trying to win too um.

But the the thing that happens is just that: there's there's kind of this constant change, but when i started out like many years ago, um my my first training like was over the phone with guys. You know you you used to either deal with guys on the floor of the exchange or you put your own guy on the floor of the exchange in order to hopefully get ripped off a bit less. You know - and i remember being on the phone with these guys and you'd you - we used to put some big orders in and you'd give them a big order, and you know they they they just clap their hand over the phone and they tell their friends around Them what you were doing so their friends could front run you. You know what i mean and i i remember once i had to deal with a guy like that, and you know i heard him distributing the order to everyone before he headed out himself, and i said, did i say bye, i meant to say, sell the guy.

Nearly had a heart attack, you know, but i mean you know the so the thing is you're you're always dealing like when you're buying and selling stuff you're, always you know it's like it's and it's not just stock markets like you're dealing in real estate, you're dealing With people who try and rip you off, you know anything you're trying to do and there's good guys and there's bad guys and there's. You know different incentives, but um, that's kind of uh, oh, but i was just gon na say that you know it's just different things that are happening, but in truth, when i look at it like 20 years ago, the prices you had to pay to trade were Just so much higher um the speeds and everything like it, it was a way worse. You know things have gotten better and worse. The problem back then, was the user experience was trash, the ux was trash.

Well, it was, but even you were also being kind of ripped off, but by a guy. If you know what i mean, while now, a guy has programmed a machine to rip you off, which doesn't feel good either, and it feels almost more fraudulent because it's maybe more proofable. But the truth is you. I don't know i'm torn on this thing because it is cheaper to trade than it ever was before it's not free is the only thing like when people say to me.

I get to trade for free, i'm like you, really do not get to trade for free like this. If you ever think, there's something you're getting for free check again, you know. So that's a great topic uh. I 100 agree with you about the whole concept of free or cheap, so uh and i've been very vocal about it.

So my opinion is quite clear: i i'd rather pay a fee and not have my data distributed, but it's just me so a question for you um and that's the topic that gets misunderstood even by me a lot by the way i'm going to give a huge Shout out to evie pike dude for the coffee money. Thank you so much in russian irish. No, so shout out to you he's a long time viewer! So hey patrick. Can you explain the whole idea basically and about how payment for order flow? Uh is good and bad.

At the same time i mean what what are obviously uh, the good stuff that we brought, such as you know, cheaper trading versus the bad stuff that it creates. It's interesting because it's very much that sort of thing it's good and bad and and the one of the big problems even is just the the growth of complexity in markets. So you know, as i said, it used to be guys under a tree buying and selling from each other, and they do what they would do as well. But you know: we've moved to what happens? Is there's markets just constantly get more complex, so we'll say, for example, you know when we move from the world of one or two places you can trade to a hundred places.

You can trade and they're all server farms they're not like places and what happens then? There's been all sorts of rules like there was a rule, i'm trying to think when it came out, but it was called reg nms, which is national market structure, and the idea about reg nms was that because you've got the the same stock trading in 20 locations. The politicians thought well this. This has a obvious problems associated with it, so we're going to require that brokers have to give their um their customers the best posted price in the country right. So that basically means that you have to kind of flash the order to all of the exchanges see where the best price is and try and get a price there.

The problem is that that gives up information and so there's other ways, then that you might get front running that sort of thing and then they passed other rules to kind of change. You know that that sort of improved upon that. But it's it's a constant back and forth. You know it's uh, it's a it's an issue.

You know in truth, a lot of this stuff, like the real one of the real lessons, for this is that for for a lot of people like if you're a medium to long-term investor, this stuff doesn't grind you up that much. You know because how how do you get ground up? You know um at the casinos like the game of craps, you know the dice game. It is one of the cheapest games to play at the casino in terms of the house take. But it's also one of the fastest games that says play play play and therefore you get hammered playing that game, and so one of the things that i would say to especially a retail invent if you are a retail investor, even if you're told you're trading for Free you're, probably paying you're paying a decent fee to trade.

You you don't see it, you know, there's no, you don't get a receipt but you're paying okay and the one way to minimize how much they chew you up is just to minimize how much you trade! You know the more you're in and out the more it harms you and that's even you know it there's a very interesting thing, because i have a very free markets approach and i think people should be allowed to do whatever they want to do. But you know when you look at apps like robinhood. The reason you don't want, that is it's like a casino on your your cell phone right and all that confetti and everything else that cheers you for doing a trade. You know that wants you that that's encouraging! You to trade more and usually that won't help you like that.

That definitely will help market makers it'll definitely help robin hood you're, probably better off making really good decisions and sticking with them. Then then sort of uh. You know, while you're well you're sort of waiting for the bus, uh doing 30 trades on your phone. You know it's, it's not it's not a winning idea and it's coming from a high frequency trader yeah.

But actually you know it's interesting because almost anyone, i know who trades fast and who trades a lot. One of the things that i really care about is slippage, and i love i love. If i can reduce the amount i trade, because that becomes uh. You know the more i trade, the more it costs me over a year and there just is a cost, and once you acknowledge that you you you look to just keep that down.

I see it like a casino when you play in the casino, the other stack against you slightly, but they're stuck against you like a 49.9 or something so the longer you play on average, the longer you're, probably to even out the odds against you. So if you can hit a good hand, you probably won't leave the same thing. It's interesting, because i would say that, in terms of fast trading, the odds are stacked against you and there's a list of reasons even just running up. Taxes like even with joe biden's new, like capital gains rules, and so on, like that's going to hammer you if you're a short-term trader right, it just is it's it's not good for what you're doing um.

So one of the things i would say, though, is that i have a friend who argues even before joe, even before joe below a year, you're in short-term capital gains. Yes, you were yeah and even there's that's even why people like to trade futures rather than stocks is that you get a better tax treatment but um but um. When we look at uh. What was i gon na say? I'm sorry, i've entirely lost my train of thought good.

I remember i was going to say that it is like a casino but most of the time you're on the winning side of the table. Right because, generally, you know, stunks go up. Okay in the long run. If you look at any long period of time, you do well by being an owner of companies, which is what you are as an investor in the stock market, and so you, you are set up to win.

Unless you make mistakes, it's you know the sentence that warren buffett said the stock market is the is the best transfer mechanism of wealth from the uh inpatient to the patient, yeah. So yeah i mean you know the thing is you know, there's someone a while ago. You know i got attacked for saying you know for for saying that trading doesn't make money. Trading can make money, but it's hard and you have to have a really good system and it's kind of like you know the way, a good blackjack player.

You know they follow ed torp's rules, they can turn up and in theory uh you know if they follow the system. Well, they can grind out a profit. That's true with trading as well, but most people neither have a system, nor do they follow it and that's when you get chewed up like once your emotions get involved, you do all of the wrong things again, the same thing like in the casino when it gets Emotional, that game over so question here for you, which is actually i like this question a lot. I don't know the answer: it's it's a the massive attack is asking: what do you think of the possibility that money managers are writing, buy orders through deck polls and sellers through the lit market to gain more control of the price? For example, like you know, people who are short on amc for that purpose, so so this wouldn't actually work the way markets are structured because it's actually, due to that um point, you know the legislation that that well, firstly, for every buyer, there has to be a Seller, but on top of that, it's this idea that reg nms just means that the orders have to sort of hit every exchange at once, and you have to be given the best price that can be achieved and so um.

What really just would ha the orders? Go where you can get a fill and if, if a broker were to give you a different fill on one exchange than on another, that would be breaking the law. I i don't think that happens. The markets are really fast, they are um, you know computerized and, basically, what what? What how it all consolidates is what there's called the sip, which is, what is the sit stand for? It's um, it's basically the consolidated tape, which is the feed from all of the exchanges put together, and you have to be given a a price, that's at or better than than what's showing on the sip, so that that wouldn't work that that that would both be Illegal and the markets aren't really uh wired for that sort of thing to work. Oh i'm not hearing it.

Yes, yes, it's me, patrick knows nothing is free 100. Somebody thinks i'm not drilling you hard enough. What do you want me to ask that i didn't ask? I mean, let's say yeah, ask some questions like i'm happy to you know i'll, give where's the money and okay so there's a question here. I do want to pull up and hold on.

Where is it somebody's spamming? The same thing hold on okay, wait, wait, wait! Wait wait. Wait, wait can't find it. So i can't find the comment, but somebody asked i'll just put it in 30 times and then it's gone. No, it's it's running so fast.

So somebody asked i can't find the comment right now. They want your thoughts on the new york stock exchange president, basically coming out and saying well, meme stocks have lost all correlation to any sort of uh, logical pricing, and it's now just this craziness i mean that's true. You know um in that the price reflect, but this this is not um. This isn't surprising to me like that.

That is an accurate description of events. In that you know. Normally, you might say that the value of a company relates. You know when you buy a company, you are receiving the sort of cash flows that that company receives through their business.

When we look at some of these stocks, like the the price, is entirely unrelated and it's just tied to the short squeeze - and you know these two examples, the the closest thing i can think to them in the past is kind of the volkswagen squeeze uh back In i think it was in 2008, you know, and so it's not surprising that they're unrelated and actually that will even it's worth noting that that will affect kind of market maker quotes as well, because we'll say in a normal stock in a normal market. One of the things we'll say if if a market maker had sold some coca-cola to a trader and then they come back to buy more coca-cola, the market maker may not be able to offset their risk instantly in coca-cola, but they might buy some pepsi shares right Because of the correlation or home depots and lows, or something like that, so they might be able to reduce their risk with a correlated thing because the meme stocks aren't correlated to the market like it. You know it's not about whether it's an update or a down day in the market there they are their own thing and for that reason it's sort of going to be difficult to make markets in those things and there's a bunch of it's very. It's a fascinating market because there's so much technical and interesting thing things going on in it like even just the way options are priced and whatever in these stocks, simply because you've just got this insane level of vol and it throws off a lot of the greeks That uh, that a trader would typically use to hedge themselves.

So i don't know if you had a chance to watch the interview that the west christian did with the community from uh from gamestop called super stonk. No, i didn't say that now so he's a he's. A very well-known securities litigator and he's an advocate for clips of him on your channel. I think yeah.

I can't yeah. I feel such a fanboyish reaction. Every time you say, watch my videos so basically uh. So he was talking about the fact - and you probably saw this on my channel - that he doesn't think that the short and the reported short interest has anything to do with the real short interest in the stock.

Because of all the manipulation and all the uh miss categorization, basically miss marking everything, that's going down the market, so do you based, i mean you've worked in this industry for many many years. I obviously can't ask you whether that's true or not, but do you think it's plausible what he's saying or not? You know it's it's an interesting thing, because i i watched him and i i was a little bit confused, because i guess i would look at this and think like if someone were to sue you'd sue, because you had lost money because of market manipulation right, but It would appear to me that the people who are upset about possible market manipulation have made an awful lot of money right like because it's you know the people they're saying are you know, shorting and knocking down stocks are losing money, and so i don't know that You get to take their money and then sue them for, for you know what i mean like. Doesn't there have to be a demonstration of of harm to your financial well-being um? I think the people who would who would have to sue in this case is the people who held before the short squeeze. Let's say that i mean i think he was referring to legitimate shareholders.

That came in i mean during the regular course of business and then got basically artificially pushed down from like 12 to two whatever like, because it's so it's really hard to know, because even when i watched his thing, i kind of thought you know he was talking About possible, like class action stuff and generally i'm a bit, lawyers seem to me to just be people who extract fees like i've. Never a lawyer's, never made. Well, that's like the wrong point. It's cost me money, you know, that's the whole point.

It's and you know i kind of think like when people talk about class action like you pile into class action. It seems to me that you know saul goodman makes a lot of money, but you don't you know so wait. So you i have to. I have to push back here.

I don't often do this with you, but i have to hear altitude. Oh no, i'm interested class action lawsuits are not designed to make any of the group members any money. In fact, you get cents, you get yeah yeah! You get nothing yeah, the only the only people who make money are the lawyer and the representative plaintiff the the good. The the device, though, is really good for a different purpose.

It's designed to basically create a penal system like a like a negative incentive to teach a lesson exactly yeah, so you join the class not to make money you get like 50 cents or pop free popcorn. Next time you go to emcee whatever like, but but the massive the payoff, the payout that comes out from the from the defendant. That's the it creates a like a penalty, basically says: oh, if you do it again or your friends whatever so so i i i they're important tools and they're. That's why they work like that they're easy, easily! Um! There's a lot.

You can say well the only doors make money true, but that's yeah part of this. Yes, there's a different purpose: there: okay, yeah yeah, so uh. Moving on from that uh, so uh, i see that this question keeps popping up. I don't think people are getting.

It's a complicated topic. So again it's the same question with different phrasing. Can uh, as you can see. I don't know if you can see on the screen.

I can read it. If you want um, let me read uh it's the same question. The truth is like all, can you explain the mechanics? So if you expect the mechanics like don't on the top of top of my head, know the timing, but you have to very quickly like once: you've traded, you have to report the the trade and and even even ways that you can sort of hide your trades. Like you know what one of the interesting things that came out of that bill, huang um blow up there about a month ago, okay, because one of the things that was interesting was that he was trading through uh.

Total return. Swaps are contracts for difference which essentially just is kind of like a bet. It's a derivative. That means that he bets on the price going up.

He gets the entire return, so dividends and capital gains, but his name doesn't show on the shareholder register and i think it the news seems to say he did this for the purpose of privacy and possibly so his brokers didn't know how concentrated his bets were. Um. That's kind of interesting, but but when that even happens, what happens? Is you know if a broker like will say, morgan stanley sell you um, you know you. You basically buy a cfd on a stock from morgan stanley.

Morgan stanley then will buy that stock themselves. As a hedge right, because they don't they don't want to take the other side of your bet, they just basically you'll see on the shareholder register. Morgan stanley is the big holder rather than your name um, but there's not really. I don't think there are mechanisms for you know, buying and selling in different locations.

No one and you it wouldn't the markets wouldn't work very well. If that was kind of the way they work like it would be a a very disjointed. The the thing is that there's there's a whole bunch of traders in most of the we'll say, non-market making, um high-frequency traders or what we call arbitrage. Traders and they've set up computers that basically look at the prices everywhere and, if we'll say, for example, even if i'll give you an example of how they might trade we'll say with a product like soybeans, you know: there's soybeans, then there might be soy.

Oil soy mush - i don't know what they call there's a whole bunch of different soy products, you're starting to sound, like bubble gum from, for example, well, there's a bunch of different products that come from the one thing, which is a soy bean. They will monitor the price of all of these things and if one gets out of whack with the other they'll buy the the cheap one sell the expensive one and you can always sort of hopefully convert one into the other um that that's the thing they'll do With something as complicated, we'll say something like soybeans with stocks, there's no way that a mar that a high frequency trader would allow it to trade on one exchange at one price and another, because it's too profitable, you know they're just lightning faster. You know that they've got microwave towers, set up between the exchanges, because the the light will move faster through air than it will through fiber optics right. They care that much about speed, they're, not letting two prices that are different exist, because that's just free money to them, so i just want to make it clear.

This is coming from somebody who's. Actually an expert on this. Not not me, since i don't know nothing about this, but dude. There is no technical way to create price decreasing using dark pools.

That's not what this thing is for you, it's basically, it's it's completely visible. If you, if you trade, unless you engage in something illegal right, unless you just don't report your trades, i i can't think quite that would be illegal and also i i still don't even really see the advantage in doing that. You know um. Apart from, like the disadvantages that it's illegal but the you know that that's just not really the way markets work like it's, it's there's so many people with different ways of profiting and they all sort of keep they kind of all police each other.

You know you have a huge compliment from buford butters, i'm assuming that's his real name. Legal name and i've been training full-time for 10 years, and these two are my favorite finance investment market youtubers and somebody uh courtney, adams, saying tom and patrick proving nice guys do exist in finance. It's a yeah. The cameras are off, i'm i'm an.

I don't know who you think you can ask patrick and okay so uh another question: i want to ask you so a technical question again, not talking specifically about the amc or any specific stock. Can how reliable do you think when i look at seeking alpha how reliable is the number that i'm seeing for short interest for any company versus the reality? I actually don't know with that. Like the you know, i i i can't actually answer that. I i you know you'd have to ask someone who runs seeking alpha because there's possibly time likes or things like that.

But i i don't really know here. You go a simple question for you: what is the origin story of palomar capital management and then he's throwing some shade some stories that we can't find on google? Oh gosh, oh amusingly, there is an old um there's an old film around uh, actually on it used to be on youtube. But it's gone where uh around the time that i launched the the fun, but it's basically just uh. You know i i launched it.

When was it back in around 2011 uh sold it in 2019 and stepped down as a director about six months ago, so um should i be nervous if we close below 60.. Are you sure i think that's what she said we're getting demonetized so fast, no money for me, oh my god um somebody says i trust seeking alpha as much as i trust someone on the street trying to sell me jewelry. You know that's the fun part of not being affiliated with anybody. I don't have a sponsor.

I can just laugh at this and okay, so uh another question uh to ask you is um. I've heard a lot of discussion. I don't know if you heard this. Obviously, you're not deep into this amc well hold on another super chat, one second eduardo alva.

Thank you for the five donation is saying citadel has been fine for many reporting violations, but they continue to do it because it is the cost of doing business. You can look it up on finra, i mean um. That is true. Actually yeah i mean i haven't looked that up so so i don't know and - and i mean all market makers they could find every once in a while for yeah and you'll probably find that with a lot of very big firms.

Just just because you know things might go wrong, but i in like, if, if he says that, i'm sure that's true, but i haven't looked it up. I don't know it's like a when when west was doing his interview, he was saying i think what is referring to eduardo here is basically wes was saying: well, these uh. They almost preferred to pay fines. Not specifically talking about citadel was, he was talking about the market in general, but west was basically saying well uh, large institutionals and market makers and brokerages basically treat these fines as a like.

He said because of doing business, they they don't really look at it. As anything that's supposed to change the way they operate, i guess that's the comment. Well i i guess it also depends on the the size of the fine and the reputational damage. Actually, i thought it was pretty interesting uh.

What was it in the last day or two? It was in the news that something like 10 big banks were excluded from being involved in a euro bond, offering, i believe, uh simply because the the eu said that they had been involved in scandals in the past, and so they would not deal with them. And it was i you know i, i won't name any banks, because i i know i'll name, one that wasn't on the list and get in trouble. But if you look it up, it was like 10 of the biggest banks you can think of, and you know something like that, like actually losing real business for uh for for sort of repeat, i think they had. There were a number of the banks that have been involved in like the libor fixing scandal and things like that, and you know that's actually what needs to happen is that that people, you know big customers need to say i i will not deal with you because You're a dishonest counterparty, and i think that that is something that that can move the needle.

I thought that was a very interesting story. I have a great question for you, but before that there's a super chat and nestor is asking: what do we think about the due diligence for gamestop on super stock? I haven't fully read it. I just saw bits and pieces of it, i'm sure patrick, didn't read it as well, yet yeah, but there's a very lengthy that is just posted on super stoke is kind of the the gamestop channel. Now all the games, the people, that's no longer wall street.

No! No, they left they formed this thing and it's super clean. It's like just the diligence, no memes they're, really a lot of good stuff there um. So a question right up your alley. I'd love to hear you uh your answer for this, which fraud ceo.

Would you interview if you could i mean the skilling, is the guy from enron right, yeah, who's, hebrews, who's ebers, but that was world calm, um, of course gosh. I have to think through the list because there's probably some really interesting ones. Um, do they have to be alive, or that i mean, if you can just do anybody in history. Bernie, probably you know bernie's kind of interesting, but i yeah, i don't know no.

No. Actually, you know, even like elizabeth holmes, is kind of fascinating to me just because it's such a it's such a strange story like i i i must admit that i find that one, a combination of hilarious and insane you know so so check this out. So elizabeth holmes, for those of you don't know, this is theranos, so a coffeezilla actually did the video where he found james corden, making a satire uh of uh theranos and they called it ficonos, basically like uh yeah, and then he and then there is a company. That's that's basically exactly that, so the meme have been beaten by reality.

Um did you say his recent uh. What is it uh? That's a wild story. It's not that's! That's his best video today yeah for the last variety of reasons. Yeah yeah, editing, research, delivery, everything! If you guys haven't the video i was like this is about this stuff, but it's it's kind of a fascinating video that and actually james johnny's recent one as well like just uh, well worth a look yeah, but james johnny.

Everybody knows he's an come on. I'm just kidding, i'm just kidding, he's a good friend, i'm kidding. He knows i'm joking um, okay, so i do have to ask you, or somebody says, mr, which would yeah it will be a good interview. You know that that's kind of i i made a video about charles ponzi that was kind of my first video that got big on youtube, and the thing i find fascinating about him is just that: it's not obvious that he, like you, read it and you kind Of think he you go through the story and you kind of think well he's definitely uh.

You know a horrible scammer and an awful person, but it's not obvious that he knew it. You know what i mean like, because they've got all of the like documentation of like letters written between he and his wife and everything, and he was like a scammer down to his soul like when they let him out of prison for about six months. He started up like another ponzi scheme down in florida, like a land bank, and you know and and he he was a scammer in his soul. But the funny thing is, it's not obvious, like i think he was sort of enough of a sort of dreamer to think he could make it work out like it's.

It's a crazy story. Uh he's like the scorpion from the scorpion and the in the turtle. You know that story where he's just gon na help himself, so this is a good one, also uh. I forgot his name but the ceo yeah.

But although i hear the ceo wasn't the guy who was actually in charge of the of the nonsense, it was the guy who ran away. Oh no, it's kind of it's kind of like bernie madoff. You know the way, but he had the guy who was like number two or number three. He was like he ran away.

They never got him he's uh, yeah, there's a crazy story there. So a few meme questions. Are you ready for this uh robert? Where are you the i'm watching question you want to answer like answer? What would be a good wrong answer? Um? I can't, i think, he's upset because he saw the thumbnail and you were like this and then he logs in and he's like tom, doesn't seem at all surprised. I can't be creative for him.

I was sure, would be horrified like someone, someone had shown something awful. Okay, second question is fraud, legal question: you know you have a legal background tom i'm going to pass that one over to you, no um. Here's a compliment. I think this guy's legit is a fair guy and hasn't been exposed to corruption.

That's nice, um. Okay. What else do we have here, um, okay, looking for an interesting question before we wrap it up? Okay, so this is a good one. So this is the thing i see keep popping up on my comment section and we own eighty percent of the float.

So basically, the ceo of amc came out multiple times saying that the retail owns about 80 and about 400 million shares out of the 500 million, which is the total total poll, basically um and understa. So would it not be counterproductive for such a high ownership of retail versus i mean? Would you not expect a higher institutional ownership in case of uh of a short squeeze, not really um, simply because you, you know this sort of thing like what's happened with amc and gamestop, and we sort of saw a similar thing with hertz a few months ago And whatever the the thing is that one of the requirements to even become a meme stock is that it has to be sort of a little bitty liquid. You know, because you couldn't do this with apple computer right like it just couldn't happen, because there's too many people there's too much stuff there's you know you, it couldn't happen so with um. You know, i think it's almost required that retail owned this much because if you think like even i think, gamestop like there was uh.

What's his name. Michael berry was an investor. I believe when it was at its lows, basically as a value play, but there's a point of which it's no longer a value, play and he's a value investor, so he's out right and it kind of requires. You know for this sort of thing to happen, like anyone who's in to sort of to buy a good business at a good price, looks at it and they kind of go well.

You know like like what is um. You know pre-pandemic like before the cinemas had even been shut down. I think amc was an eight dollar stock right now, they've issued more equity and um, and i think it was in a proper decline. Anyhow they've issued more equity.

I forget how much bigger the float is and it's worth it like 58 or something like that. Now no 500 million shares, but but what's the price it's uh is it i think low 60s or high 50s yeah. So so i mean you know if you, if you bought it, eight we'll say and fifty-nine shut, all the cinemas, and you know the world goes really against that type of company when it rallied to like ten. You were out, you know, like you, you, you felt lucky you're up twenty percent right yeah, so i mean from eight to l, yeah, look at a a.

I guess, like a one-year chart on that and we'll see yep yeah. So i mean you know like that. That first little spike there was when all of the sort of what's interesting, though, is i think there. There is some funny stuff going on with these, though, in that, because of the market cap, increasing uh, both gamestop and amc have kind of moved into certain into um into indexes.

You know, and so then those you know, kind of blackrock or vanguard or whatever actually have to buy some uh based on their their market cap within the index. So you'll see some of that and i think there's also certain etfs that will own them and their etfs are rule-driven and they might rebalance monthly and and the rule will be, they can't do an early rebalance, and so they might have seen one of these stocks Really balloon in size and obviously they're probably hoping to get out while the price is still up, but they can't until you know the next uh you know date, that's written in the rulebook says they can exit so um.