4 ms·

'Markets can remain irrational far longer than you can remain solvent' I have little sympathy for short sellers. Betting on any company to fail is a negative p

'Markets can remain irrational far longer than you can remain solvent' I have little sympathy for short sellers. Betting on any company to fail is a negative perspective. It's particularly foolhardy to bet against Elon. I also do not find the common economic argument, that short selling introduces price efficiency, compelling. Most public markets are able to efficiently manage price discovery without negative pressures, such as housing markets, wages, etc. Furthermore, the advantage appears to be extracted purely as profit by the short seller.

ignasl 7y ago
Stock market is much much much more efficient compared to housing and wages. One of many reasons is of course ability to short sell. In addition to price discovery short selling provides support when overpriced companies share price free falls and investors starts to panic. It also provides incentive to uncover outright frauds. > Furthermore, the advantage appears to be extracted purely as profit by the short seller. So? Do you work for free? Short selling is extremely risky business as we could see here with TSLA. Even if you are right you can get obliterated by a short squeeze. It's basically impossible to go against solid company and damage it. And there is no reason to - there are plenty of badly managed companies with questionable financials that you could go after.
Agustus 7y ago
Short sellers have a place in the market. They put in place a mechanism, in real markets, to hold a stock to honesty. Imagine if WeWork could be shorted, people would have been able to hold the stock price down. Instead of the last minute moment where everyone looked around and went: It’s a REIT! Where I share your sentiment on short sellers and longs are the ones who fake information / overpromote it to make some money, which distorts the market for the commoners.

ignasl 7y ago

Stock market is much much much more efficient compared to housing and wages. One of many reasons is of course ability to short sell. In addition to price discovery short selling provides support when overpriced companies share price free falls and investors starts to panic. It also provides incentive to uncover outright frauds. > Furthermore, the advantage appears to be extracted purely as profit by the short seller. So? Do you work for free? Short selling is extremely risky business as we could see here with TSLA. Even if you are right you can get obliterated by a short squeeze. It's basically impossible to go against solid company and damage it. And there is no reason to - there are plenty of badly managed companies with questionable financials that you could go after.

Agustus 7y ago

Short sellers have a place in the market. They put in place a mechanism, in real markets, to hold a stock to honesty. Imagine if WeWork could be shorted, people would have been able to hold the stock price down. Instead of the last minute moment where everyone looked around and went: It’s a REIT! Where I share your sentiment on short sellers and longs are the ones who fake information / overpromote it to make some money, which distorts the market for the commoners.