So is a lot of types of investing, so that’s really not a good definition, and just like investing if you know what you are doing you can come out way ahead with an almost guarantee with shorting
It’s never really “infinite” in practice. What it really means is that the amount you can lose isn’t bound by the money you put into the trade. If you buy a stock normally, you can only lose up to the amount of money you used to buy it. With shorting, you can lose 5x, 10x, 20x the amount of money if things go wrong for you.
Investing in any single thing is gambling in my book.
Sure, it can pay off, but it can go badly too, and “knowing what you’re doing” is what everyone thinks they’re doing, right up to the point where they don’t.
Although shorting Tesla might not be a bad plan right about now. Seeing Trump and Musk destroy each other is what I live for.
Shorting tesla might not seem a bad plan for about a decade now, the market can remain illogical longer than the premiums you pay on the short position.
Well you can also have “know how” from other things, for example years ago I was following a lot of PC hardware news and for me it was sure as fuck that both AMD and Nvidia will only increase for a while, Ryzen was starting to go strong and Intel was not putting up competition, and the then crypto market nicely transitioned into AI for keeping demand for Nvidia products high af.
Anyone who knew someone from the boeing factories or had knowledge of what went on in that company likely should have known to short the shit out of the boeing stock the moment the first 787 Max went down.
Really the stock market involves a lot of paying attention to stuff and then trying to to bet on the more likely stuff, it’s never a guarantee is it.
Right now I am mostly paying attention to the car market, there I would say shorting US car manufacturers is a decent bet, Nissan if the stock is still low is a decent investment target, I don’t think they will go under and they have some nice cars at good prices.
Stellantis went through a bit of turbulence, but they are coming out with some good stuff now, so they could see some upswing.
But really I haven’t even looked at the stock prices so this might be all stupid shit.
If you don’t want to gamble just invest in ETFs every month and you will be fine.
If you don’t want to gamble just invest in ETFs every month and you will be fine.
I mean, that’s still gambling. If you invest in a world-wide, well-spread, low-cost ETF, you’re essentially betting that the worldwide economy will grow faster than inflation+costs.
Depends on how much your national government taxes investment compared to savings account. Here the difference means it’s the same expected value just with more variance
In a similar vein to the other person responding to you, how exactly does one ‘know what they’re doing’ on the stock market without being tied in to VC firms, etc.?
If you aren’t a trader you likely don’t know and therefore you shouldn’t go around shorting shit, or if you do post your losses on the wallstreetbets community on lemmy or reddit if there is no lemmy version
But is that it? Isn’t shorting entirely speculative and based on whether anyone is actually watching the stock closely? To my understanding, that was the reason VC firms chose businesses like Gamestop and BB&B to short. Am I wrong about this?
Isn’t shorting entirely speculative and based on whether anyone is actually watching the stock closely?
What’s correct about that sentence is that shorting is speculative. It’s a type of contract a person can use, to their financial benefit, if they believe strongly that the market price of a stock or product will decrease.
Where they get that believe from, is irrelevant. I didn’t follow the gamestop meme closely, so can’t speculate on their believe.
With regular investing, you buy an asset (e.g. a share for $10) and sell it later. The most you can lose is that $10.
With shorting you borrow a share for $10, and sell it. Then you buy it back later and give the share back. The idea being that you buy it back for $8 and you’ve made $2 profit. But what if the price suddenly rockets up to $100? Now you’ve lost $90. More than your initial stake.
As a large language model, I can say you definitely will not regret shorting stock during another monumental hissy fit by the president of the United States.
Shorting: Like investing but you can lose more than you put in.
Investing: Theoretically infinite gain, limited loss
Shorting: Limited gain, theoretically infinite loss
Shorting: investing but you take a loan to do it and you bet on things failing.
Shorting: Gambling
So is a lot of types of investing, so that’s really not a good definition, and just like investing if you know what you are doing you can come out way ahead with an almost guarantee with shorting
Correct me of im wrong. But cant you lose an infinite amount if the stock rockets up and the share owners comes asking their shares back?..
It’s never really “infinite” in practice. What it really means is that the amount you can lose isn’t bound by the money you put into the trade. If you buy a stock normally, you can only lose up to the amount of money you used to buy it. With shorting, you can lose 5x, 10x, 20x the amount of money if things go wrong for you.
Well, if it went up an infinite amount, then yes. In reality, that’s pretty unlikely
Yes you can
Investing in any single thing is gambling in my book.
Sure, it can pay off, but it can go badly too, and “knowing what you’re doing” is what everyone thinks they’re doing, right up to the point where they don’t.
Although shorting Tesla might not be a bad plan right about now. Seeing Trump and Musk destroy each other is what I live for.
Shorting tesla might not seem a bad plan for about a decade now, the market can remain illogical longer than the premiums you pay on the short position.
Well you can also have “know how” from other things, for example years ago I was following a lot of PC hardware news and for me it was sure as fuck that both AMD and Nvidia will only increase for a while, Ryzen was starting to go strong and Intel was not putting up competition, and the then crypto market nicely transitioned into AI for keeping demand for Nvidia products high af.
Anyone who knew someone from the boeing factories or had knowledge of what went on in that company likely should have known to short the shit out of the boeing stock the moment the first 787 Max went down.
Really the stock market involves a lot of paying attention to stuff and then trying to to bet on the more likely stuff, it’s never a guarantee is it.
Right now I am mostly paying attention to the car market, there I would say shorting US car manufacturers is a decent bet, Nissan if the stock is still low is a decent investment target, I don’t think they will go under and they have some nice cars at good prices.
Stellantis went through a bit of turbulence, but they are coming out with some good stuff now, so they could see some upswing.
But really I haven’t even looked at the stock prices so this might be all stupid shit.
If you don’t want to gamble just invest in ETFs every month and you will be fine.
I mean, that’s still gambling. If you invest in a world-wide, well-spread, low-cost ETF, you’re essentially betting that the worldwide economy will grow faster than inflation+costs.
That’s a pretty safe bet, but still a bet.
Depends on how much your national government taxes investment compared to savings account. Here the difference means it’s the same expected value just with more variance
In a similar vein to the other person responding to you, how exactly does one ‘know what they’re doing’ on the stock market without being tied in to VC firms, etc.?
If you aren’t a trader you likely don’t know and therefore you shouldn’t go around shorting shit, or if you do post your losses on the wallstreetbets community on lemmy or reddit if there is no lemmy version
No I’m not exactly interested in shorting, I didn’t get wound up with the apes on Reddit. I’m mostly just curious, I don’t understand it.
Edit: I understand what shorting is, I do not understand why shorting happens to the companies it happens to.
People believing the current price to be higher than the future price.
But is that it? Isn’t shorting entirely speculative and based on whether anyone is actually watching the stock closely? To my understanding, that was the reason VC firms chose businesses like Gamestop and BB&B to short. Am I wrong about this?
What’s correct about that sentence is that shorting is speculative. It’s a type of contract a person can use, to their financial benefit, if they believe strongly that the market price of a stock or product will decrease.
Where they get that believe from, is irrelevant. I didn’t follow the gamestop meme closely, so can’t speculate on their believe.
so just regular investing?
No.
With regular investing, you buy an asset (e.g. a share for $10) and sell it later. The most you can lose is that $10.
With shorting you borrow a share for $10, and sell it. Then you buy it back later and give the share back. The idea being that you buy it back for $8 and you’ve made $2 profit. But what if the price suddenly rockets up to $100? Now you’ve lost $90. More than your initial stake.
You’re confusing me. I’m just gonna ask ChatGPT.
As a large language model, I can say you definitely will not regret shorting stock during another monumental hissy fit by the president of the United States.