Welcome back to the channel everyone today, i want to talk about the difference between price anchoring and being realistic. I've definitely seen some shills out there trying to price anchor amc, but i've also seen some people out there trying to label realistic estimates as price anchoring just because it's not their estimate. So i want to clear up the fud so stay tuned and let's make some money now. Obviously this is another one of those videos where there's a lot of variables that come into play, so everything that i say isn't necessarily going to be 100 factual.

It's for you to make the final call and the final decision this post on reddit, says: selling amc a thousand dollars per share posts are price anchoring posts. Saying government will step in are posts testing our response as we move closer to the moas. Please remain vigilant. Now again, i do think it's important to remain vigilant and to be aware of price anchoring, but i also think it's important to have a realistic estimate of exactly how high amc can go.

So this post says what is price anchoring. Let's say you know that a stock could go to 100 000 to a million dollars per share because short hedge funds have sold 9 billion synthetic shares and those 9 billion synthetics must be bought back and closed out. If you're trying to convince people to sell a hundred dollars per share or in the high hundreds or three thousand dollars per share, or even at ten thousand dollars per share and above all of those could be considered price anchoring. But what price is really price? Anchoring and what price is just being realistic now, obviously, the hedges are trying to price anchor amc and put low prices in our heads to try and convince us to sell amc at low prices or trying to convince us.

The government will step in at low prices and therefore you won't have a chance. Obviously this is good for the hedges because they can price anchor amc and convince us to sell low. They won't necessarily be squeezed and they won't necessarily end up bankrupt or end up liquidated now. I first want to go through some numbers to determine a realistic price for amc during the squeeze, and then i want to kind of break down why the hedges are trying to price anchor amc and what will happen if they do price anchor amc and what will Happen if they don't now most of you might not have a lot of confidence in the stock market.

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Let's start with assumption a assumption, a assumes that there's zero synthetic shares. It assumes that 513 million amc shares are bought back by the hedges at ten thousand dollars per share that cost the hedges around five trillion dollars. Now, if those 513 million shares were bought back at a hundred thousand dollars per share, that cost the hedges 50 trillion dollars now, obviously that would largely drain the dtcc insurance policy and would bankrupt most members of the dtcc. Now, if most members of the dtcc end up bankrupt, that means that goldman sachs is going bankrupt, jp morgan is going bankrupt, wells fargo is going bankrupt.

Bank of america is going bankrupt and many many more that's going to mean that millions of americans and maybe even hundreds of americans, lose their entire life savings and their pension funds. At that point, it would crash the entire u.s financial system, and hundreds of millions of americans would lose their savings and lose their pension funds. I think the fed will step in way before a hundred thousand dollars per share, because they can't afford to let hundreds of millions of americans lose their life savings. They can't afford for jp morgan, goldman sachs bank of america, wells fargo and many others to go bankrupt.

Losing all of those savings and all of those pension funds - now don't forget. I have said in previous videos that there may be a few shares sold above that hundred thousand dollar per share mark, and then it will fall down very rapidly. There may only be a very small handful of shares sold at that price. The price of amc won't run up to a hundred thousand dollars per share and hold at that price for many many days allowing thousands and thousands, if not hundreds of thousands of apes to sell for over a hundred thousand dollars per share.

I'm talking like five or ten shares, maybe one singular ape, will sell at this price, and most states will sell much much lower, let's say ten thousand dollars per share and therefore, while i do think it's possible for a few shares to be sold up at this Price, the price of amc won't hold a hundred thousand dollars per share for days and days and weeks and weeks on end and continue running up to a million dollars per share and hundreds of thousands of apes won't be selling their shares. A hundred thousand dollars per share, maybe the price, sits at ten thousand dollars per share for some time, costing the dtcc as a whole, around five trillion dollars and one or two apes will sell for a hundred thousand dollars per share. Again, i think five trillion dollars is realistic for the dtcc, but they can't afford to pay out 50 trillion dollars because it would bankrupt. The entire financial system is a hundred thousand dollars per amc share or even ten thousand dollars per amc share, realistic with zero synthetic shares.

I think the answer to that question is probably no. If there's only actually a hundred million shares sold short, then there's no way that amc is reaching 10 000 per share with zero synthetics. So what about, if there's 2 billion or 20 billion synthetics? So let's talk about 2 billion synthetics. Obviously, if there's 2 billion synthetics, it means there's 2.5 billion total shares 2.5 billion total shares at 10, 000 per share would cost the dtcc around 25 trillion dollars.

Now. If there's 2.5 billion shares at 20, 000 per share, that'd again cost them around 50 trillion dollars, which would bankrupt the majority of the members in the dtcc and therefore, if there's 2.5 billion shares, i imagine the fed and the sec will step in way before twenty Thousand dollars per share to avoid crushing the entire financial system. Now again, as i just showed you this example here, maybe the price runs up and there's a few people that sell their shares at twenty thousand dollars per share, but it won't hold at that price for an extended period of time. The majority of people will be selling their shares at two thousand dollars per share and a few lucky people will get twenty thousand dollars per share.

Now again, i ask you: the same question is twenty thousand dollars per share, realistic with two billion synthetics and while i think it's not possible for amc to hit a hundred thousand dollars per share with zero synthetics, i do think it's maybe possible that amc could hit Twenty thousand dollars per share with two billion synthetics. Now again, let's look at example, c: 20 billion synthetic shares. If there's 20 billion synthetics it means there's 20.5 billion total shares if amc runs up to 2 000 per share, that'll cost the dtcc around 41 trillion dollars. So if there's 20 billion synthetics, maybe you'll have a few apes selling at 2 000 per share, but the majority of apes will be selling somewhere between five hundred dollars and a thousand dollars per share.

As i said with this example, a lucky few will get that two thousand dollar price point, but the majority will be selling much lower. Obviously, if there is 20 billion synthetics in existence, all of those apes that have their sale prices at a million dollars per share. Just simply won't get triggered because the sec and the fed won't let it run up that much because they wouldn't have the cash to pay out all of those apes. And this is why i've said multiple times over the last year that it's very important to sell.

At multiple different price points, we don't know how many synthetics there actually are. Maybe there's zero synthetics and therefore selling at fifty to a hundred thousand dollars per share. Isn't too unrealistic, but if there is actually 20 billion synthetics there's no way that that fifty thousand to a hundred thousand dollar price target will ever be triggered or ever be here. But obviously, if you're selling some shares at two hundred dollars some shares of five hundred dollars, some shares at five thousand dollars some shares at ten thousand dollars and your final shares at fifty thousand dollars.

Then you're guaranteed to at least have some of those sales orders hit and some of your amc shares sold. Obviously, it's always best to hope, there's somewhere around 2 billion synthetic, so we can try and get 20 000 per share. But in the worst case scenario, when there's actually more than 2 billion synthetics at least you'll be selling some shares at lower price points as well again, i'm not trying to be a shill and i'm not trying to price anchor amc. I'm just trying to look at the facts.

The dtcc has around 56 trillion dollars in cash, which is all of the cash of all the members in the dtcc, and therefore it can't physically go any higher than 56 trillion dollars if it got anywhere close to 56 trillion dollars and the entire dtc goes bankrupt. Every single major bank in america goes bankrupt. Every single american in the us loses their life savings and pensions and the sec and the fed. Just wouldn't let that happen, and therefore i think it's important to allow all of these price points and all of those scenarios from a realistic basis do i know which scenario is actually the real scenario as in do i know if there's zero, synthetics, two billion synthetics Or twenty billion synthetics? No, i i don't know how many synthetics there actually are, but i think it's important to be realistic for all scenarios now.

I also wanted to talk about what happens if the government intervenes the post on reddit says. The government only has two options: option: a if the government doesn't honor the shares. That's been sold to amc apes. It effectively destroys the integrity and reputation of the u.s stock market.

If they do that, then everyone finds out the casino is rigged. Everybody pulls out their money, whether it's foreign investors or american investors, and they diversify into gold, silver, crypto, nfts, real estate and anything else. That'll effectively be the end of the us stock market, and the entire financial system would effectively crash option b is to somehow fool the apes into selling their shares by price, anchoring amc and trying to convince us to sell for low values. Now i do kind of think there's an option c here somewhere in the middle, where tons and tons of hedge funds, like melvin capital, do end up going bankrupt, but those large u.s institutions like bank of america, jpmorgan goldman sachs and many others get rescued or bailed Out, i think the sec, the fed and the government will let amc run up to a point to bankrupt those smaller hedge funds to prove a point, but they will step in at some point to rescue those major institutions.

I think somewhere in the middle there. There is going to be a best of both worlds where amc apes do get paid during the squeeze, but those major institutions do end up getting bailed out to rescue hundreds of millions of american savings and pension funds, but again at what specific amc price. That really is. I can't really tell you, because there's so many variables - and i don't know how many synthetics are truly out there now.

I actually wanted to show you this video on cnbc, where they're talking about the fed actually bailing out the market due to bad decisions by over leveraged hedge funds. I just don't think they will yeah, maybe i'll be wrong. That's where i stand right now. May i come in on this because i think what josh - and i are both saying and josh has definitely been louder on this - is that the fed will react to the stock market.

The counter argument is what jimmy chino said that the stock market, the fed, is not going to bail out the stock market from bad decisions. I'm pretty sure what he's referring to there is gamestop amc, non-fungible tokens, i'm pretty sure, that's what he's referring to, if apple, just to pick a name out of a hat but a pretty important one. If apple's multiple somebody buys it today at 27 26 times earnings and it goes down to 20 times earnings - that's a different story that wasn't a bad purchase. That needs to be bailed out.

That's the market saying something is dramatically wrong, that is affecting the economy and the fed does need to react to it. So if the counter argument is that the fed put is to bail out bad actors, the person buying apple today or yesterday isn't the bad advert. So right, there even cnbc think the fed could bail out the market for those bad actors and those over leveraged hedge funds. Shorting, gamestop and amc guys be sure to.

Let me know down in the comments below whether you think the fed will bail out the market and whether you think there's a difference between price anchoring and just being realistic and as always guys. If you enjoyed this video be sure to check out some of my others, alternatively, subscribe to the channel and ding the notification bell, because that way, you'll be alerted. When i upload a new video cheers.