a lot of markets feel quite similar to debeers & diamonds. the total stock of stuff is accumulated/distributed in order to maintain a useful market price. like fat reserves & insulin response
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distribution dampens price by increasing supply and accumulation increases it by reduce supply (assuming demand stays constant)
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debeers has some degree of control over demand but a viral video about how fake diamonds are cheap and undistinguishable or about how debeers is monopoly creates demand volatility so it adjusts the supply to stabilize the market rate just like a body maintains temp/metabolism
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note that it's not about getting the highest price possible. there's a certain temperature range that the whole system operates at given its biological constraints
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this is true only when there is a clear majority and minority stakeholder and the majority holder can unilaterally affect supply in gme's case, the large players were actually holding onto negative supply and got squeezed by a swarm that was holding onto the real supply
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this holding would have done nothing with a "real" asset like say cheese. there's a cost to hoarding cheese so that the few wheels remaining on the market have super high prices. cheese goes bad, opportunity cost, etc...
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however b/c margin requirements are based on market price once that price (a temporary expression of real world accurate pricing, e.g. the guy who bought the cheese b/c it was the only cure to say his daughter's life) hits a certain level, the margin call causes liquidation
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thus by hodling cheese the cheese fans could fuck over the cheese haters who were trying to profit off of a prediction of a plague of upcoming cheese maggots
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(aside: lenders probably like to offer high leverage b/c they know it amplifies volatility, increasing the odds of a margin call since it can legally do so based on MARKET price not "True" price)
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this is similar to how the hoomans point to a pile of rubble and turn it into a priceless collectible Unicef Heritage. anything can become priceless if you want it to be.
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so interestingly enough, fat reserves have no real effect on the short term market price just like a mammal's metabolism doesn't really fluctuate that much except for expected bursts of activity like pouncing or climbing
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short term sudden changes can point to things like fasting/starvation and over consumption of simple carbs while long term changes can point to things like a healthy diet, anorexia, or clinical obesity
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market price only "snaps" into reality once these extremes are forced into legible realized naming. e.g. doctor saying "ur fat/anorexic & going to die" e.g. you go to buy some wood and there's nothing left and you exclaim "THAT was valuable???"
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basically, market price is pretty accurate as long as you are not caught in a squeeze or a frenzy where the target item is (discovered to be) scarce it's only when the market is saturated with the item that market price is accurate
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so profit involves accumulation in periods of supply abundance where it is considered mundane and distribution when it is considered rare and valuable the contrarianism of buying junk and selling valuables
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End of conversation
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