1. Presumably that discussion took place pre-FTX.
2. I don’t think he said “1000% in a day”, just in general.
3. The article goes into repeated, extensive detail about how short selling is financially dubious and extremely risky.
4. It goes into his childhood because it’s a profile piece.
I mean this with no offense, only because I’ve been there many times: did you feel personally attacked by this guys takes on crypto/stocks/our world at large?
No one thinks of shorting as a good business strategy.
That’s why when Elon Musk goes on about how shorts are these shadowy super powerful figures you know he’s completely bullshitting because shorts are among the few (only?) actors interested in downward price discovery, while the rest of the world, including governments all over, would much prefer constant price growth with the correction to be suffered by a future generation/government.
I have been following crypto for a long time. None of this stuff is going up even 100% in a day, let alone 1000%, at least not among top 500 cryptos. The market is so gassed out that nothing moves anymore. Penny stocks have more upside compared to crypto.
Then, on June 9, 2020, Anderson came across a tweet from Milton. His truck company, Nikola, had gone public on NASDAQ five days before: “I’ve wanted to say this my whole adult life; $NKLA is now worth more than Ford and [Fiat Chrysler]. Nipping on the heels of GM …”
Given that Ford and GM trade at very low multiple and have not done much in a long time, even decades, this is not that undoable...
Article lauding short-selling always have the same formula: tons of focus on a big winner, like Enron or Nikkola, ignoring or overlooking all the time short selling loses, which is a lot. Also, tons of detail spent describing the short seller's backstory, as if his childhood set the seeds for success, even though it's likely just luck/survivorship bias.
Moreover, having a big win is seldom enough to beat the market. If you allocate 5% of your capital for a short and it goes bankrupt, you only increased your total capital by 5%. Making the historical 10% average (including dividends) with an index fund is less risky and more consistent, probably.
There is more money to be made with media hype/ads, selling research reports, subscriptions, managing money, etc. than actually shorting. If shorting is so effective, why are these individuals and firms always trying to sell their services/research hmm