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Show Outline
Investing Rules: Never Short Stocks
Investing rules are simple and short rules that limit mistakes, improving future performance or returns.
“You don’t need to be smart to make money investing. You just need to be consistently NOT STUPID.”
Shorting Stocks is Stupid
Case Study #1: GameStop short squeeze of 2021
Case Study #2: AMC squeeze of 2021
I submitted a competition for a Long/Short stock choice for 2021
$SODI was my long
$AMC was my short. Thesis: Bankruptcy
Everyone wants you to fail if you are shorting stocks.
Unlimited downside. Limited upside.
Summary:
Investing rules improve your future performance and returns by limiting your mistakes. You don’t need to be smart to make money investing. You just need to be consistently not stupid. Shorting stocks is stupid.
Investing is about aligning the odds in your favor. Shorting is the exact opposite. Everyone wants you to fail. It is impossible to have a margin of safety. You pay interest costs and you could lose everything. Never short stocks!
