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You know i’ve tried to warn these little short sell it boys i try to warn them i told them they’re gonna get spanked i told him this over a week and a half ago i told them the stock market is ready to explode i told them that these earnings are going to be unbelievable in the short so they just didn’t listen they just didn’t listen and now they are absolutely
Getting spanked on their ass oh my word they’re getting spanked so hard oh my goodness facebook stock today up over 10% i’m gonna explain you guys exactly why short sellers you know are gonna continue to get spanked and exactly what you don’t want to do in short selling companies cheap all day a lot of people have been thinking they’re smart shorting chipotle stock
Recently all they’re gonna keep messing up this and that and chipotle stock up 25% today amd stock you know a stock that i’ve never been a fan of but i would never dare to short amd stock this stock was up over 12% as i’ve taken the screenshot i’m pretty sure today it closed up over a 14% amd shorts i’ve gotten absolutely destroyed i’ll show you this chart here for
Just a second okay this shows you s&p 500 short interest percentage of float it since 2007 right if you look here look at you know somewhere between 2009 and 2010 right the market bottoms in march of 2009 at that time look at what the short interest was people were thinking the markets are gonna go away south they were so far behind the ball and short sellers
Got absolutely destroyed okay now let’s look at some more stocks by do three plus percent today this is a chinese google as i call it up over 5% after-hours short sellers than that one i’ve gotten absolutely destroyed amazon some people think all main amazon’s overvalued this and that i would not dare to short amazon stock no matter what share price it’s at up over
Six percent after-hours and was up fifty seven dollars a share today and now after hours is up over ninety three dollars who knows it could go up over a hundred dollars a share tomorrow unbelievable guys short sellers again absolutely spanked now and they will continue to get spanked they they they have these hypotheticals and an economy is weak or something when
It’s like look at all the factual information all the factual information they says the economy is very strong taxes have been lowered that’s a massive boost to every single corporation out there right now as far as the american corporations go this makes all their earnings look you know even unmoor unbelievable if we’re even in like you know kind of a weak economy
Right now their numbers would still look unbelievable just because of the tax benefits but when you have a strong economy strong business results on top of a lot of these businesses are expanding on top of tax benefits oh my goodness guys you’re in a urine like a perfect storm situation for these earnings of companies to look absolutely unbelievable and that’s
Exactly what’s going on in shorts are starting to get spanked in such a big way now where you know that’s the first mistake shorts are making the second most of the mistakes shorts are making is the fact that shorts don’t really make money over the long term they don’t why because a short seller they need to make money in the short term ok a long term investor we
Can buy shares in a company we believe in for all these different reasons ok we can buy those shares if the shares go down in the short term ok we can lower cost basis we can buy more we can wait it out until our thesis comes true and those shares go up over time right and you know maybe 3 to 5 percent of time we’re wrong over the long term ok we can deal with that
Ok not every single time would be right but if 3 to 5 percent were wrong we can deal with that right the problem with these short sellers are they need everything to go down short-term because they got to pay interest on those short positions ok and they’re in a position when these starts doing these stocks start to go higher and they go higher and higher they have
To cover and take massive losses think about if you’re short amazon stock right now you’re you were shorted amazon last week or whatever think about how much you’re gonna be down already in your paying interest on that and the worst part is every day that amazon goes up you your your position just get begets gets worse and worse and worse and remember you can lose
Unlimited amount of money when you short shares you are going against the system and it’s a stupidest thing you could ever possibly do shorting shares can be phenomenal if you know exactly when the economy’s gonna go south in a huge way like you were shorting shares and let’s say 2000 the you know the end of 2007 you start short and shares because you believe
We’re gonna go into a huge crash if you happen to do that and you got out rate at the beginning of 2009 you could have made a lot of money but the issue is people don’t look at the factual information okay people don’t look at the factual information and these shorts get killed and say they do good on one-possession okay say they actually nail it on one position
They do good on one stock right the issue is then they try to find the next one and they get absolutely destroying that next one because it ends up not going their way because remember they’re betting against an entire executive management team they’re betting against an entire board of directors they’re betting against the fact that the stock market goes up over
Time they’re betting against the fact that government wants companies to do good they’re betting against literally the entire system when you’re betting against the entire system you man you better know what you’re doing in most short sellers have no clue what they’re doing they do not know how to look at factual information and decipher it because if they did they
Would understand that their deals like insane out there right now in the stock market and they’re gonna continue to get slaughtered and continue to get slaughtered right now and that’s the way it’s gonna be and a lot of times short sellers right now think they got such a smart short on i remember i was invested in companies named inez okay this inez company it was
Their biggest customers whole foods they had a lot of you know organic products and things like that like macaroni and cheese and pastas and all types of stuff cereals and whatnot in this company right it started weaken a bit because whole sales with you know where sales were weakened and i bet this was like four or five years ago all right so short start sellers
Start to short these shares because they think all you know start going down big time you know this is a high p/e company whole food shares are you know you know starting to go down and whole food sales are starting to go down whole foods that start in a weekend we’re gonna make a killing on shorten these shares and all it’s not a few months later the general mills
Ends up coming in and buying out a knees for a 37% premium and short sellers got absolutely destroyed they thought they were so smart betting that short-term amias was going to go down because of valuation concerns and this and that and then general mills comes in and buys them out and they get absolutely destroyed that’s another huge reason that short sellers lose
Money the majority of the time they’ll bet on a company and maybe their thesis is correct maybe that company is overvalued but the fact is you’re fighting against the market trends and you’re fighting against the chance that that company can get acquired by another company at a big premium it’s not even worth the risk it is not even worth the risk and you know
That’s just what it is guys in these short sales again spanked right now they’ll continue to get spanked and that’s just the way it is i try to warn them i tried to warn them last week you know but you know it is what it is so let me know anyways what you guys think about all this what’s going on out there in the market you know what shares are you buying out there
I’d love to hear from you guys do you own any other shares of these companies that have shot up over the past few days i would love to hear from you guys as always thank you for watching and have a great day
Transcribed from video
Why Short Sellers Get Spanked So Hard! By Financial Education
