Crispy₿acon

some random thoughts on short-selling: - i actually spent most of my career being a bearish trader/trading from short side...i think it's coz i went thru like 5 cds auctions my first 3 years of trading and those were the names i made good pnl on, so i sort of got hell-bent on trying to find those opportunities - at an investment bank when u like a trade u put the position on and you pitch the idea to clients - i worked in london (EU HY/distressed credit mkt) for about 7 years and in nyc (US HY credit) for 3 years - as you'd expect the US mkt is way more sophisticated than the EU mkt - in europe, you could look into a random company that no one else had looked into, realise it was a pos, put out a short trade idea, and people would absolutely shit themselves coz turns out all these sleepy european asset managers just auto-pilot bought everything in the index and never looked into any of the credits - many of these companies would go on thru messy restructurings (in europe there's no clean ch11 plus have to deal with different jurisdictions)...and if you were able to identify them you'd get a bit of a reputation...."oh no XYZ is short this credit..time to get out"...like no one would defend stuff until it got to a super distressed level - while i'm sure many bondholders would have been upset, ultimately, if you were right at the end of the day i think people respected that...and also it just went to show how shit and poorly run so many european companies are - so personally for me as a young trader i thought trading was all about finding shit companies who were telling lies and shorting them and then you become a hero...without realising that the EU HY mkt is absolutely tiny and it is (or was) very easy to be a big fish in a small pond so long as you had some strong views and were willing to take risk - then i moved to NYC and attempted the same strategy and got my arse completely handed to me. tried the same strategy...finding shit companies that i thought could blow up, putting out short theses etc - but unlike in europe, americans basically had the opposite reaction. the US HY market is 3x bigger than the european mkt but the main difference is just how people take risk/trade/invest - it's generally with a positive mindset - risk assets go higher, you get paid to take risk, you get paid to support companies, you get paid to support the economy etc etc...just a completely different mentality and you only need to look at the relative performances of US vs european stock indices to tell you that - not only that, if you short a company that someone owns a large position in, in europe they would shit themselves and liquidate...in the US they would take it personally and buy as many bonds as they could from you, pull the borrow and squeeze you until you had to cover your short...basically like a proper big boy market - but what's worse, is when you start to get that reputation as "the guy who shorts things"...people just dislike you. it's perceived the same thing as everyone is having a great time at a party and you turn up and complain the music is too loud or something like that...everyone hates that guy and there's also no real good reason to be that guy - other thing with shorts is you have to get the timing absolutely right...no one cares if you were "right in the end" but never made money on it - i remember i had a massive short on WEWORK bonds but the borrow was insane...JPM kept bidding...everyone kept pulling the borrow...our japanese desk had a private bank client who would always call me up to offer bonds which were on a different ISIN that i couldn't actually funge into which made borrow even worse (i always wonder if this was just masa son squeezing me out PA)...but then i had to go on my MBL and the desk ended up covering my short as it got short squeezed...the day i got back the IPO got pulled and the bonds absolutely tanked...no one remembered "ovie was right" because i had no pnl to show for it - with shorts it really doesn't count if: i) you get squeezed out of your position before it moves lower ii) you sit short in a rallying market, massive opportunity cost of capital, and then are eventually right because a broken clock is right twice a day - in this retail world, if you're actively short and are a cunt about it, i think don't be surprised if people hate you. at the end of the day, there are many hardworking people who own assets...some are trying to earn returns on savings, some are building up to make money for a larger goal and many are trying to change their lives (as is often the case in crypto) - so i think phrasing things in a certain way can understandably trigger people, and the average human is more emotional than logical to the point where their entire opinion of you can change where everything you've ever done in your life is disregarded just because of that one time you were short and got it wrong (whether you or i care about this or not is a separate question, but it's an explanation of human behaviour) - so for me, at some point, i realised i could have made way more money buying stuff at the lows than shorting them down to there, have to use way less brainpower, and also not piss people off or be seen as a bad guy and after covid i took a conscious decision to be a "glass half full" guy - unironically the next 5 years of my life i actually made way more money PA than i ever did trading at an investment bank, met some super interesting people and developed some incredible relationships along the way - it's hard to stand out as a bullish trader because everyone is bullish, and if you're trying to make a name for yourself (which i personally don't really care about i'd be happy just making enough money to make $REKT successful and play golf forever) it can be difficult...but...you do get market periods where stuff sells off aggressively and everyone has turned max bearish...and you can sometimes be in the minority as a bull, advocating for adding risk/buying dips...and when you are eventually right (because markets in general always bounce), you can still be a hero and you haven't pissed people off along the way - personally i also have a problem with rooting for things to go lower, especially on a macro level or even real companies...it's like...do i really want hardship to increase across families...do i really want people to lose their jobs...etc etc....sure vapourware coins launched by scammers probably deserve to go down...but even a fraudulent company that maybe employers 1000s of people...like all those guys lose their jobs when it goes under and it's a tough thing to root for (even if the right outcome is that they get found out) - anyway consequently i try not to be bearish, generally don't short things...there are times when i think the market is complacent and advocating for caution is the right thing...but i'm concsious about how i communicate it - it's funny coz in the past i think i've said stuff like "taken some profits here, feeling a bit cautious about risk but feels like a good spot to lock gains in" - and i'll STILL get a tonne of negative comments calling me a retard etc for selling too early...but ig that just goes to show what you should expect if you are like aggressive/cuntish about shorts anyway there is no conclusion to this story just felt like writing it cheers

.@RektMkts stream returns today at 11AM ET

is he gonna pull it off again

my message to the @RektMkts pro discord on saturday good luck this week everyone

live on @rektmkts xitter.cf/i/broadcasts/1pKdRDlvv…

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