Investor Carson Block says he's had to trade more frequently to fight the risk of short squeezes.He says that means he has to be willing to take losses and try again.Short-sellers faced a new reality the last few weeks as retail squeezes became a threat they could no longer ignore.
A saying sometimes attributed to the famous economist John Maynard Keynes warns investors,"Markets can remain irrational longer than you can remain solvent." If big investors needed a reminder of that idea, they got one in the past few weeks as hedge funds were squeezed out of short positions in the likes of GameStop. of Muddy Waters Research, there are lessons to be learned as he looks for his next target.
"This is something that we're going to be very attuned to, that we could become victims of a squeeze. So we have to be nimble," Block told Insider in an exclusive interview."It's all about risk management. There's a potentially lethal risk out there from the business perspective for us, and we have to respect that."Block says it makes a big difference that so much money on Wall Street now swings based on technical trades and levels instead of fundamentals.
"Fundamentals are mattering less, and especially with the massive amounts of stimulus that has been pumped into markets as a result of COVID, it's really more about flows and technicals," he said."If people see these technical dynamics like, 'well it's heavily shorted, the float isn't that big, and call option pricing isn't that expensive' ... there are traders who might jam it up on us.
That adds more difficulty to an already-difficult landscape. Block says his firm's short position in Chinese education technology company
I don't like short sellers(Bears) 📉
Fuck short sellers
Do you think this is what people really need right now?