Short ideas

[Libs]

I couldn't find a thread on this. Someone mentioned shorting SBUX, which is intriguing. Any good ideas out there? I like to allocate 5% to this stuff, to satisfy my gambling needs while my coffee-can stocks do their thing.

[WayWardCloud]

I've started a reverse "what are you buying today" thread a year ago and got some great initial answers but the momentum didn't sustain.

I'm not shorting anything at the moment. Now that we can get yields from bonds I find that if I'm nervous I can just reduce my stocks exposure and increase my fixed income and lower the portfolio volatility that way instead of attempting to be long/short.

Are you short anything?

 

[gfp]

Well reviewing the results from that 2023 thread should reinforce that shorting stocks is a tough way to make a living!  CVNA, NVDA - yikes!

 

I was short Stellantis but I covered it in the 15's.  (I really don't like Stellantis)  I was short the index but I covered it on JPY freak out day.

 

I can't find much that I would want to be short at the moment.

 

Maybe that idea someone had on this board earlier about SHW - that might be a decent short at $90 Billion - but it is breaking out to all-time highs and that isn't usually a great sign to go short.  Plus I'm about to go buy a 5 gal. of Pro-block primer/sealer so that's money in the bank.

[Dinar]

1 hour ago, gfp said:

Well reviewing the results from that 2023 thread should reinforce that shorting stocks is a tough way to make a living!  CVNA, NVDA - yikes!

 

I was short Stellantis but I covered it in the 15's.  (I really don't like Stellantis)  I was short the index but I covered it on JPY freak out day.

 

I can't find much that I would want to be short at the moment.

 

Maybe that idea someone had on this board earlier about SHW - that might be a decent short at $90 Billion - but it is breaking out to all-time highs and that isn't usually a great sign to go short.  Plus I'm about to go buy a 5 gal. of Pro-block primer/sealer so that's money in the bank.

A friend of nineteen years is an incredible professional short-seller, I wish I had listened to him more.  (Short banks in 2008, short luxury April of 2023, short banks fall of 2022 if memory serves me properly.)  He NEVER shorts on valuation, NEVER!!!

[Saluki]

If you start from first principles, shorting is a terrible idea.  The market goes up, on average 10% a year, so you have to be making +10% a year on average just to overcome the first hurdle.

 

You also have to add borrowing costs. Then if it has a dividend, the cost is even higher. Hurdle number two.

 

If you have 10 equal weight positions in your long portfolio, the underperforming ones become a smaller part of your portfolio and fade away. As a bad short doesn't work out, it becomes a larger part of your portfolio. So you are forced by math to double down on your losers. 

 

Unlike going long, where your downside is limited to your portfolio size, you can lose more than your investment if it goes wrong for you.

 

Most professional fund managers can't outperform the indices, even when swimming with the flow. You are betting that even though the market is very efficient in one direction, that it's somehow so inefficient in the other direction that you can overcome all the prior hurdles.

 

And you not only have to be right about it, you have to be right about it and hope that the market agrees with you before you run out of money. A ticking time bomb. 

[sleepydragon]

In my experience, shorting makes money faster than long.

In fact, IMO, most long/short funds actually made most of their money from the shorting side.

Shorting tends to work faster than long, because stocks fall much faster than rising on average.

But shorting is more risky because it's zero-sum game (unlike just long). It's sort of like event-based tradings. Timing is important. You get timing right, you make returns in a short period of time, but you could lose a lot too.

 

In term of shorting candidates.. there are a lot of them.  For example, you can short those hard to borrow/Expensive to borrow stocks.. Some of them will have short squeeze but most will fall hard. The problem is, on average, your returns will be less than the borrow fee you pay. You have to find stocks to short before it becomes expensive to short. It's a much harder game. Like options, which you must get timing AND directions correct to make money,  for Shorting you need to get timing, directions and find stocks that are still cheap to borrow. 

 

 

 

 

 

[gfp]

17 minutes ago, sleepydragon said:

You have to find stocks to short before it becomes expensive to short.

hopefully you realize that the price to borrow changes and you haven't locked in some better deal

[sleepydragon]

2 minutes ago, gfp said:

hopefully you realize that the price to borrow changes and you haven't locked in some better deal

Yeah, and the borrow costs go higher as stocks tank.. and they charge during weekend and holiday too

[73 Reds]

10 hours ago, Saluki said:

If you start from first principles, shorting is a terrible idea.  The market goes up, on average 10% a year, so you have to be making +10% a year on average just to overcome the first hurdle.

 

You also have to add borrowing costs. Then if it has a dividend, the cost is even higher. Hurdle number two.

 

If you have 10 equal weight positions in your long portfolio, the underperforming ones become a smaller part of your portfolio and fade away. As a bad short doesn't work out, it becomes a larger part of your portfolio. So you are forced by math to double down on your losers. 

 

Unlike going long, where your downside is limited to your portfolio size, you can lose more than your investment if it goes wrong for you.

 

Most professional fund managers can't outperform the indices, even when swimming with the flow. You are betting that even though the market is very efficient in one direction, that it's somehow so inefficient in the other direction that you can overcome all the prior hurdles.

 

And you not only have to be right about it, you have to be right about it and hope that the market agrees with you before you run out of money. A ticking time bomb. 

 

8 hours ago, sleepydragon said:

Yeah, and the borrow costs go higher as stocks tank.. and they charge during weekend and holiday too

The fact that shorts are permitted to operate provides opportune long investors a key advantage.  I've never met or even heard of anyone who has been successful only short-selling.  If they claim to be successful, ask them whether they would have done better using their skills for long investing.  Strictly mathematically speaking, you won't find any 100 baggers, 10 baggers or even doubles after borrow costs.  No thanks. 

[Gregmal]

Yup. Outside of the public smash and grab conmen, the bulk of the short sellers I’m aware of are more driven by being edgy and disgruntled and feeling smarter and differentiated from “everyone else”. It’s a character thing versus an “I’m gonna try to make money in the most efficient manner” thing. Which should go without saying considering right off the bat the overwhelming numbers say you’re just better off not shorting to begin with. 

[Libs]

Guys, I get it. No argument on any of this. But I'm in the camp of 'take a small slice and gamble with it.' Unlike you soulless robots, I need the outlet! 

 

Given all the poker players on this forum, I doubt I'm alone in this regard. BTW I use options, I don't actually short. And so far I'm slightly ahead in this game........anyway this thread will doubtless die a quick death.....maybe deservedly so.

 

P.S. Wayward -I am short TSLA, via puts, which is obvious and maybe stupid, but IMO Musk is playing the long con here  but is running out of time. So it's kind of a fraud + overvaluation play.

Edited August 16 by Libs

[sleepydragon]

6 minutes ago, Libs said:

Guys, I get it. No argument on any of this. But I'm in the camp of 'take a small slice and gamble with it.' Unlike you soulless robots, I need the outlet! 

 

Given all the poker players on this forum, I doubt I'm alone in this regard. BTW I use options, I don't actually short. And so far I'm slightly ahead in this game........anyway this thread will doubtless die a quick death.....maybe deservedly so.

 

P.S. Wayward -I am short TSLA, via puts, which is obvious and maybe stupid, but IMO Musk is playing the long con here  but is running out of time. So it's kind of a fraud + overvaluation play.

I have nothing against shorting btw..  

also, buying put is safer than shorting directly because you will never lose more than 100%, but what’s what you pay the option premium for. Also, the put’s premium has included the borrow costs because what’s what it costs for the market makers to underwrite the put.

 

 

[gfp]

26 minutes ago, Libs said:

P.S. Wayward -I am short TSLA, via puts, which is obvious and maybe stupid, but IMO Musk is playing the long con here  but is running out of time. So it's kind of a fraud + overvaluation play.

 

That's probably a good one.  Don't forget to model in the drive in movie diner earnings

https://www.teslarati.com/tesla-diner-movie-supercharger-job-posting/

[Gregmal]

I was actually shocked to find out that Tesla also has a $1000 per bottle high end Tequila business....

[gfp]

7 minutes ago, Gregmal said:

I was actually shocked to find out that Tesla also has a $1000 per bottle high end Tequila business....

And if Tequila isn't your thing you can get just the decanter

https://shop.tesla.com/en_sg/product/tesla-decanter?sku=1655475-00-A

 

Or glasses that can't stand up on their own!

https://shop.tesla.com/en_sg/product/tesla-sipping-glasses?sku=1581744-00-A

Edited August 16 by gfp

[LC]

8 minutes ago, Gregmal said:

I was actually shocked to find out that Tesla also has a $1000 per bottle high end Tequila business....

This is hilarious - I looked it up: apparently this is the tequila: https://nosotrostequila.com/products/nosotros-tequila-reposado-750ml

And this is the bottle: https://shop.tesla.com/en_sg/product/tesla-decanter?sku=1655475-00-A

 

I truly love Elon math:

$50+$215= $1000

 

gfp beat me to it...you're quick!

Edited August 16 by LC

[gfp]

5 minutes ago, LC said:

This is hilarious - I looked it up: apparently this is the tequila: https://nosotrostequila.com/products/nosotros-tequila-reposado-750ml

And this is the bottle: https://shop.tesla.com/en_sg/product/tesla-decanter?sku=1655475-00-A

 

I truly love Elon math:

$50+$215= $1000

 

 

I don't think Tesla sold it for $1000.  I think that was some folks on the secondary market.  Tesla probably charged $420 lol

 

Oh man, now I see they are selling a branding iron and a texas belt buckle.  These guys are geniuses.

Edited August 16 by gfp

[Fitz]

20 hours ago, Libs said:

I couldn't find a thread on this. Someone mentioned shorting SBUX, which is intriguing. Any good ideas out there? I like to allocate 5% to this stuff, to satisfy my gambling needs while my coffee-can stocks do their thing.

Use this forum to beat the urge to gamble right out of you! 

 

It’s okay to get rich slowly  

[Spekulatius]

Mark Cohodes is the best short seller I track.

signature bank, Silvergate, Riley (currently ). He stated years ago that HELE has shoddy accounting and they blew up as well. There are many others. He has got the best Q ticker collection of anyone I know. I love his wig indicator.

Edited August 16 by Spekulatius

[UK]

15 hours ago, Gregmal said:

Yup. Outside of the public smash and grab conmen, the bulk of the short sellers I’m aware of are more driven by being edgy and disgruntled and feeling smarter and differentiated from “everyone else”. It’s a character thing versus an “I’m gonna try to make money in the most efficient manner” thing. Which should go without saying considering right off the bat the overwhelming numbers say you’re just better off not shorting to begin with. 

 

+1

 

Often even with their long positions they end up being too smart and are attracted by unnecessary complex things and then get burned by some important but unknown risk or development. Definitelly some character/ego problems:)