The world of derivatives is full of holes that very few people are really aware of. It's like hydrogen and oxygen sitting on the corner waiting for a little flame.
Charlie MungerRead
I'll always understand the Schadenfreude aspect to short-selling. I get that no one will always like it. I'm also convinced to the deepest part of my bones that short-selling plays the role of real-time financial watchdog. It's one of the few checks and balances in the market.
Interpretation
The quote discusses the controversial nature of short-selling in the stock market and its importance as a regulatory force.
James Chanos expresses a dual perspective on short-selling, acknowledging the negative perception of it due to its association with Schadenfreude, or the pleasure derived from another's misfortune. However, he strongly believes that short-selling serves a crucial function in the financial markets as a mechanism for accountability and oversight, acting as a check against overvaluations and unethical practices.
In practice
In a finance seminar discussing market ethics.
The world of derivatives is full of holes that very few people are really aware of. It's like hydrogen and oxygen sitting on the corner waiting for a little flame.
Those who don't manage their money will always work for those who do
People come in. They are too gung ho. They invest too much money in things they don't know. They lose it and then they clam up and stop investing. Then they miss the actual boom. That's the nature of the market.
Gold is a way of going long on fear, and it has been a pretty good way of going long on fear from time to time. But you really have to hope people become more afraid in a year or two years than they are now. And if they become more afraid you make money, if they become less afraid you lose money, but the gold itself doesn’t produce anything.
Credit is a system whereby a person who can not pay gets another person who can not pay to guarantee that he can pay.
If the fluctuations in your investment portfolio are reduced, the impact of emotions and behavior on your account is also reduced.
Subscribe for the occasional hand-picked quote. No noise.