I'm not intimidated by shorters. They are people just like us, subject to the same emotions and irrational thoughts.
Firstly, realise that most Funds [after fees] don't consistently outperform their benchmark index over time, despite their heavy investment in research, algorithms and fancy offices. Which is why so much money is invested in Index Funds these days. Even Berkshire Hathaway has underperformed the S&P500 for most of the last 20 years. Sorry, Warren.
Secondly, those fundies borrowing to short only pay a small deposit fee to those they borrow the stock from and then small ongoing payments. This gives them high leverage at little actual cost, so they can outgun traditional longs quite easily. But that also works in reverse. If the market turns against this kind of short selling for whatever reason and moves upward, their position rapidly becomes untenable due to the inherent gearing. And worse, until they close their position, their losses are theoretically unlimited. As the famous GameStop - GME short squeeze showed, it can become ridiculous quite quickly if enough longs are present.
Thirdly, GameStop was a freak event caused by very unusual circumstances, mostly by a significant number of bored younger people locked up during Covid collaborating on Reddit to financially embarrass "The Establishment" for their own profit. More subtle upward movements occur reasonably often, even on the ASX, without that level of long input. Last Monday their just weren't enough committed longs, despite that arguably good Announcement.
Addendum to Engines 101. I've received a hand written note, looks like quill on parchment, from my old Latin teacher who writes "Idle, young man, you never did pay attention in my classes. The Latin word for wheel is 'rota'. 'Turbo' in Latin means something that spins, like a tornado or a spinning top." Smackdown! I humbly stand corrected.
[I'll never be elevated to Jedi Knight at your Round Table now, JL].
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