Why would retail investors read short articles when they don't or can't read an annual report. Broad market ETF fund investing dosen't require a lot of brain activity. These investors believe they can hear something on X or YouTube buy it and the filthy lucre will roll in. Never understanding the difference between investing, trading or gambling.
I look at the posting about someone investing for 2 years learning about options.
Options are not investing. They are trading and so many trading in options are one click above degenerate gamblers.
I look back over the years since 1980 when I bought my first stock and how I have had my head and ass handed to me. I learned how to read annual reports, all the 10K stuff and releases. It is so much easier today to find information. My investing philosophy revolves around free cash flow and low P/E's. But that is just the start. I seldom look at short interest because most of the individual companies I invest in don't garner interest from short sellers.
To be fair, most of those reports are -at best- mental masturbation and at worst the Benjamin Button of pump and dumps.
In SCMIs case, treason is a pretty serious crime. My guess is that seizure is forthcoming alongside long walks in the prison yard with Bubba, Jerome and the entire butthole brigade.
The Short Seller Report was from Hindenberg on SMCI was lively reading and took only a couple hours. It was not mind numbing and sterile and almost encrypted like 10k or annual reports. I was asked to evaluate the company 1 year ago. After reading the report, my recommendation was to run like hell from this company. SMCI was a darling of so many momentum traders for years. But the truth comes out that management should not be trusted to run a junk yard. This was no surprise.
Too good to be true performance can be a sign of fraud and upward momentum should not make us lazy.
Their report about CVNA was likewise lively reading. I expect it will prove right in time. But for a fraud (if it is one) the numbers they produce for Wall Street are not constrained by reality. CVNA went on to rise 100% since the report and has since pulled back. But the point is, these companies can be very dangerous to short. Much more than we would intuitively expect.
It's also noteworthy that Hindenburg Research shut down shortly after the CVNA report. That suggests it was a more dangerous situation than we will ever know.
Chris, I’m starting to think of you as my investing “uncle” 🤣…always good advice, not always 100% correct…but 100% thought provoking and entertaining…and your shared experience usually points us in the right direction.
I appreciate your work and unfortunately many people like myself don’t have the brain bandwidth to delve into and understand most of it. Thankfully there are some like yourself that do and I’m thankful for your doing it.
Let's call it lack of training and experience, not lack of bandwidth. I'm there with you. I speak Russian, know my way around low-voltage systems and HVAC equipment, can rattle off the Latin species names of most ornamental plants, shrubs and trees, and am jack-of-many-trades but I've only been paying attention to investing and the language that explains it for 2 or three years. I'm a baby in this world.
This topic is an excellent example of my understanding the concept of what is happening, but having no idea of how to capitalize on it. Aside from staying far away from private lending in general, what can I do to take advantage of the situation? Without a kindly mentor to hold my hand as I learn options, I feel a little lost.
Excellent comment. We are all good at something, some excel at one thing or another, or a few things, but nobody has the time or "bandwidth" to excel at everything. I never studied economics and only came to active investing when I retired from a career in law enforcement in 2012. It has been great fun, with good years and bad, and more mentally stimulating and challenging than gambling. I've learned to be prudent, conservative, and consistent in my 401K plan, but in my brokerage accounts I have lots of fun, attempt different strategies, go for singles sometimes, other times for homeruns. Writers like Chris have provided humorous and fantastic perspectives on the market. I've learned alot from a guy who says he often gets things wrong.
Hi Chris, my first experience with short "hit pieces" was when Carson block published his thoughts about French supermarket group Casino and the cascade of holdings used by the CEO to control it. Casino screamed but now the share price is worth not even a percent of it's former price.
SMCI always smelled fishy to me but I didn't short (too expensive). CVNA, SOFI are also in my grifty list. So is TSLA (but this one is unsinkable). A quick question for a friend: why are such obvious frauds accepted in the indices?
On the 13th a stock I own ($BW) was given a 50% haircut by a short seller report. The report was complete bollix. 6 trading days later, yesterday, in the midst of the bloodbath, it achieved a 52 wk high before closing down 3%. It's one of my favorite stocks. I paid a buck for it. I'm not saying this as a rebuttal. I think everything you say is true. I'm saying it because in addition to reading the report you need to know what you own. You can't always believe everything that you read.
Down 35% in a day and 56% in a week, wait…are we talking about gold stocks here? 🤣
Great read, I really love your short selling stuff. I learn more from them than other reports. I still think the TSLA reporting will prove correct eventually, but it’s been painful for the shorts. Keeping an eye on others you’ve mentioned too, like Carvana. I don’t have the skill or risk mindset to actually short, but I like learning about it.
Great article! Very well written. While not outright fraud, I think the biggest "how come we didn't see it" is going to be - Bitcoin. Talk about Faith over Analysis. Countless, detailed articles written over its flaws, and nobody wants to read them. Universal adoption is the cruelest way to reach a Final Top. Buffett always said he wouldn't touch that with a 20ft pole. Jamie Diamond hates it but his customers demand JPM offer it. Bankers never turn down $$$. NFT Bros thought they were smarter than everyone, too. 13yrs and still no utility. Carvana might one day be blushing. When Investing becomes Religion, it's Religion. Blockchain - Brilliant Idea!... for Gold. Transactional, Tokenized Gold will go mainstream this year.
I 100% agree with you on the value of short seller research. I owned SMCI in 2024. I licked my wounds and sold after Hindenburg published its report on previous Super Micro accounting scandals in August of 2024. Sucked at the time, but it saved me a further 50% loss.
Why would retail investors read short articles when they don't or can't read an annual report. Broad market ETF fund investing dosen't require a lot of brain activity. These investors believe they can hear something on X or YouTube buy it and the filthy lucre will roll in. Never understanding the difference between investing, trading or gambling.
I look at the posting about someone investing for 2 years learning about options.
Options are not investing. They are trading and so many trading in options are one click above degenerate gamblers.
I look back over the years since 1980 when I bought my first stock and how I have had my head and ass handed to me. I learned how to read annual reports, all the 10K stuff and releases. It is so much easier today to find information. My investing philosophy revolves around free cash flow and low P/E's. But that is just the start. I seldom look at short interest because most of the individual companies I invest in don't garner interest from short sellers.
"Why would retail investors read short articles when they don't or can't read an annual report."
Sigh. Sadly, you make a good point.
To be fair, most of those reports are -at best- mental masturbation and at worst the Benjamin Button of pump and dumps.
In SCMIs case, treason is a pretty serious crime. My guess is that seizure is forthcoming alongside long walks in the prison yard with Bubba, Jerome and the entire butthole brigade.
Amat Victoria Curam.
The Short Seller Report was from Hindenberg on SMCI was lively reading and took only a couple hours. It was not mind numbing and sterile and almost encrypted like 10k or annual reports. I was asked to evaluate the company 1 year ago. After reading the report, my recommendation was to run like hell from this company. SMCI was a darling of so many momentum traders for years. But the truth comes out that management should not be trusted to run a junk yard. This was no surprise.
Too good to be true performance can be a sign of fraud and upward momentum should not make us lazy.
Their report about CVNA was likewise lively reading. I expect it will prove right in time. But for a fraud (if it is one) the numbers they produce for Wall Street are not constrained by reality. CVNA went on to rise 100% since the report and has since pulled back. But the point is, these companies can be very dangerous to short. Much more than we would intuitively expect.
It's also noteworthy that Hindenburg Research shut down shortly after the CVNA report. That suggests it was a more dangerous situation than we will ever know.
Chris, I’m starting to think of you as my investing “uncle” 🤣…always good advice, not always 100% correct…but 100% thought provoking and entertaining…and your shared experience usually points us in the right direction.
Well done, Chris.
I appreciate your work and unfortunately many people like myself don’t have the brain bandwidth to delve into and understand most of it. Thankfully there are some like yourself that do and I’m thankful for your doing it.
Let's call it lack of training and experience, not lack of bandwidth. I'm there with you. I speak Russian, know my way around low-voltage systems and HVAC equipment, can rattle off the Latin species names of most ornamental plants, shrubs and trees, and am jack-of-many-trades but I've only been paying attention to investing and the language that explains it for 2 or three years. I'm a baby in this world.
This topic is an excellent example of my understanding the concept of what is happening, but having no idea of how to capitalize on it. Aside from staying far away from private lending in general, what can I do to take advantage of the situation? Without a kindly mentor to hold my hand as I learn options, I feel a little lost.
Excellent comment. We are all good at something, some excel at one thing or another, or a few things, but nobody has the time or "bandwidth" to excel at everything. I never studied economics and only came to active investing when I retired from a career in law enforcement in 2012. It has been great fun, with good years and bad, and more mentally stimulating and challenging than gambling. I've learned to be prudent, conservative, and consistent in my 401K plan, but in my brokerage accounts I have lots of fun, attempt different strategies, go for singles sometimes, other times for homeruns. Writers like Chris have provided humorous and fantastic perspectives on the market. I've learned alot from a guy who says he often gets things wrong.
Hi Chris, my first experience with short "hit pieces" was when Carson block published his thoughts about French supermarket group Casino and the cascade of holdings used by the CEO to control it. Casino screamed but now the share price is worth not even a percent of it's former price.
SMCI always smelled fishy to me but I didn't short (too expensive). CVNA, SOFI are also in my grifty list. So is TSLA (but this one is unsinkable). A quick question for a friend: why are such obvious frauds accepted in the indices?
Because they pay hefty 1) listing fees to exchanges, 2) audit fees to auditors, 3) investment banking fees to investment banks.
On the 13th a stock I own ($BW) was given a 50% haircut by a short seller report. The report was complete bollix. 6 trading days later, yesterday, in the midst of the bloodbath, it achieved a 52 wk high before closing down 3%. It's one of my favorite stocks. I paid a buck for it. I'm not saying this as a rebuttal. I think everything you say is true. I'm saying it because in addition to reading the report you need to know what you own. You can't always believe everything that you read.
Down 35% in a day and 56% in a week, wait…are we talking about gold stocks here? 🤣
Great read, I really love your short selling stuff. I learn more from them than other reports. I still think the TSLA reporting will prove correct eventually, but it’s been painful for the shorts. Keeping an eye on others you’ve mentioned too, like Carvana. I don’t have the skill or risk mindset to actually short, but I like learning about it.
Great article! Very well written. While not outright fraud, I think the biggest "how come we didn't see it" is going to be - Bitcoin. Talk about Faith over Analysis. Countless, detailed articles written over its flaws, and nobody wants to read them. Universal adoption is the cruelest way to reach a Final Top. Buffett always said he wouldn't touch that with a 20ft pole. Jamie Diamond hates it but his customers demand JPM offer it. Bankers never turn down $$$. NFT Bros thought they were smarter than everyone, too. 13yrs and still no utility. Carvana might one day be blushing. When Investing becomes Religion, it's Religion. Blockchain - Brilliant Idea!... for Gold. Transactional, Tokenized Gold will go mainstream this year.
Reality is starting to matter once more - with a vengeance!
$MSCI trading like a 15 million dollar market cap gold explorer. Down 56% YTD. I got a bunch of them.
I 100% agree with you on the value of short seller research. I owned SMCI in 2024. I licked my wounds and sold after Hindenburg published its report on previous Super Micro accounting scandals in August of 2024. Sucked at the time, but it saved me a further 50% loss.
Does "negative tailwind" mean it just sucks or, much like a tornado, REALLY sucks?!
Thanks. I shorted SOFI and AFRM this week made some money on this. But holding a short position for the ages is so difficult.