403- FROM THE VAULT: The Role of Shorting in the Market

InvestED: The Rule #1 Investing Podcast

Phil Town & Danielle Town

Investing, Business

4.6 • 1.6K Ratings

🗓️ 27 January 2023

⏱️ 45 minutes

🔗️ Recording | iTunes | RSS

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Summary

“There’s nothing evil, per se, about selling things short. Short sellers—the situations in which there have been huge short interests very often—very often have been later revealed to be frauds or semi-frauds.” — Warren Buffett Short selling, or shorting, plays an important role in public markets as it improves prices, rational capital allocation, prevents bubbles, and shines a light on fraud. A recent example of this is the Gamestop event which caused many investors to either gain or lose money, as shorting isn’t ideal for all investors. This is why it’s important to invest with your values—so you can invest with confidence and reduce your risk of making bad investing decisions. In today’s podcast, Phil and Danielle discuss the important role short sellers play in our market and why it’s important to invest with your values. Learn about the Four Ms and how they can help you invest in the right businesses at the right time with this FREE guide: http://bit.ly/3btAqhM Topics Discussed: Confirmation bias GameStop squeeze of 2021 Short selling Hedge fund collusion Resources Discussed: Beat the Dealer Black-Scholes Model Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Hey everybody this is Phil Town and this is Danielle Town. Welcome to the
0:08.7	invested podcast where we, Danielle and I, my beautiful wonderful daughter, we are
0:15.0	what do we do here dad? Well I was teaching you all about investing and I think
0:22.6	this point in the road five years down the road you've learned so much and
0:26.0	we've written a book together about it. I mean you've really dug in and you're
0:30.6	doing your own, your own teaching now which is fantastic. I'm so proud of you for
0:35.4	doing that. And thank you and my own, I've got such a nice community on the
0:40.3	invested practice and we're so focused on process which I'm like obsessed with
0:45.2	these days of them coming back from illness and trying to figure out, trying to
0:49.2	like make my life better than it was before. So that's a fun project. I mean we
0:55.5	spend so much time teaching how to, how to, this is the thing you do, the steps
0:59.9	you do, right. Here's how you narrow it down from 11,000 companies to one
1:05.5	company and and you're focused on the sort of the prequel which is got to get
1:12.4	the process right. You got to eat your head in the right place. You got to
1:16.5	eat your head and you got to keep it there which is a constant practice, a
1:21.1	constant process, a constant endeavor that we all need expert professional
1:27.4	billionaires all the way to people like me. I'll need to have our head right,
1:33.8	understand the ups and downs and be able to deal with these ups that we're
1:39.9	having which is like exciting and maybe euphoria inducing to a level that is a
1:47.6	little bit unhealthy all the way to maybe the crash that's gonna happen at
1:53.3	some point here that everybody is scaremongering us about and I don't mean
1:57.7	scaremongering in a way like it's not true because it's all correct but just in a
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