3 ms·
> Doesn't the success of a short come down to crowd psychology? Not really. I've shorted 100s of instruments on the financial market and this just doesn't rin
by chollida1 11mo ago
> Doesn't the success of a short come down to crowd psychology?
Not really. I've shorted 100s of instruments on the financial market and this just doesn't ring true.
Often the best shorts are not the worst companies but the once that have had performed the best over the past 6 months to a year because that generally means they've overshot their valuation and should rationally come back down to a more reasonable level. PLTR certainly fits the bill here.
I think a big misconception the public has about short sellers is that they short to zero. The vast majority of directional shorts look alot more like "short company that has 3x n the last year from $200 down to $120 where its fundamentals or financial ratios make more sense".
And this ignores that from a money manager's standpoint more than half the shorts put on aren't negative bets on a company but rather a downside hedge against another bet that a related stock will go up. IN this case you really don't care about how the shorted stock performs as long as its a good hedge for your upside bet.
Never once have I initiated or participated in a public campaign to promote my short and the vast majority of hedge funds fit that profile.
The fact that there have been a few high profile short cases that most of us know actually helps illustrate just how rare it is.