5 ms·

Every time I see an article like this, I wonder whether these experts have put their money where their mouths are. I'm sure there are plenty of Uber investors w

by kldaace 10y ago

Every time I see an article like this, I wonder whether these experts have put their money where their mouths are. I'm sure there are plenty of Uber investors willing to take the other side of this bet, especially if you think the company is worth less than half of its valuation. Otherwise, it makes it hard for me to believe their opinion.

__derek__ 10y ago
I wonder whether you saw the article last week about how difficult it is to actually short Uber.[1] [1]: http://qz.com/707947/investors-have-placed-a-one-way-bet-on-uber-which-made-us-want-to-figure-out-a-way-to-short-it/ http://qz.com/707947/investors-have-placed-a-one-way-bet-on-...
- kldaace 10y ago
  Ah thanks, I actually hadn't seen that. Maybe in the future these predictions can be handled by some sort of betting market.
  - __derek__ 10y ago
    Ideally that would happen in the stock market, of course.
  - ChuckMcM 10y ago
    There are always proposition bets but they are generally illegal in most, if not all, markets.
- gozur88 10y ago
  This is depressingly common. I occasionally run across a company which I'm sure will have a lower stock price in a year. The numbers don't add up, the business plan is just unworkable, or it fails the "this tiny company has a higher valuation than Walmart" test. But about nine out of ten times I can't get shares to short, or my broker can get shares from another brokerage for a large minimum lot and even larger fee. I can understand some smaller companies don't have a large float, but it seems like you should be able to get shares for companies like Uber and Tesla.
  - bookmarkacc 10y ago
    Isnt tesla one of the most shorted companies currently? Cant be too hard to short it
    - gozur88 10y ago
      I'm not an expert on this stuff, but my understanding is when lots of people sell short it's harder to do the same. It doesn't really make sense to me, since I think when you short a stock those shares get sold, so they're going somewhere.
      - deleted 10y ago
        [deleted]
newacct23 10y ago
This line of thinking is wrong. You can't just short a company because you have a reasonable belief it is overvalued when the vast majority of investors think otherwise. There needs to be some event that forces the public to reevaluate their valuation of the company for the short to work.
- acchow 10y ago
  This. Shorting is expensive, and you could become insolvent if you short too early.
bsder 10y ago
The market can remain irrational longer than you can remain solvent.
ci5er 10y ago
Well, yes. I used to think like this, but when I placed said bets, it turns out that the market was fully capable of remaining stupidly wrong quite a bit longer than I was able to remain solvent. It was shocking to say the least. Even when the facts were obvious - an inexplicable stubborn attachment to remaining wrong. I think there's even a famous quote along those lines - so I'm guessing that I'm not the only one with the experience of learning that you can be correct and still have bad timing.

by kldaace 10y ago

__derek__ 10y ago

I wonder whether you saw the article last week about how difficult it is to actually short Uber.[1] [1]: http://qz.com/707947/investors-have-placed-a-one-way-bet-on-uber-which-made-us-want-to-figure-out-a-way-to-short-it/ http://qz.com/707947/investors-have-placed-a-one-way-bet-on-...

kldaace 10y ago
Ah thanks, I actually hadn't seen that. Maybe in the future these predictions can be handled by some sort of betting market.
- __derek__ 10y ago
  Ideally that would happen in the stock market, of course.
- ChuckMcM 10y ago
  There are always proposition bets but they are generally illegal in most, if not all, markets.
gozur88 10y ago
This is depressingly common. I occasionally run across a company which I'm sure will have a lower stock price in a year. The numbers don't add up, the business plan is just unworkable, or it fails the "this tiny company has a higher valuation than Walmart" test. But about nine out of ten times I can't get shares to short, or my broker can get shares from another brokerage for a large minimum lot and even larger fee. I can understand some smaller companies don't have a large float, but it seems like you should be able to get shares for companies like Uber and Tesla.
- bookmarkacc 10y ago
  Isnt tesla one of the most shorted companies currently? Cant be too hard to short it
  - gozur88 10y ago
    I'm not an expert on this stuff, but my understanding is when lots of people sell short it's harder to do the same. It doesn't really make sense to me, since I think when you short a stock those shares get sold, so they're going somewhere.
    - deleted 10y ago
      [deleted]

newacct23 10y ago

This line of thinking is wrong. You can't just short a company because you have a reasonable belief it is overvalued when the vast majority of investors think otherwise. There needs to be some event that forces the public to reevaluate their valuation of the company for the short to work.

acchow 10y ago
This. Shorting is expensive, and you could become insolvent if you short too early.

bsder 10y ago

The market can remain irrational longer than you can remain solvent.

ci5er 10y ago

Well, yes. I used to think like this, but when I placed said bets, it turns out that the market was fully capable of remaining stupidly wrong quite a bit longer than I was able to remain solvent. It was shocking to say the least. Even when the facts were obvious - an inexplicable stubborn attachment to remaining wrong. I think there's even a famous quote along those lines - so I'm guessing that I'm not the only one with the experience of learning that you can be correct and still have bad timing.