Here’s a great interview with two legendary short-sellers, Jim Chanos and Carson Block on Real Vision which provides some great insights into the art and history of short selling and whether it’s time to consider short selling in the commercial real estate market. Chanos believes that due to the behavioral aspects of short selling, short sellers are born not made saying:
But as time has gone on I do think I’ve sort of changed my view. I always thought that at first the short side was the mirror image of going long. Just you did the same types of research. You hopefully ascribe valuations and risk probabilities for outcomes and things like that.
But as time has gone on I’ve learned that at least on the behavioral finance side of the equation it’s not the same and there’s lots of asymmetries on the short side as you well know. I also think the personality aspect is somewhat different and that probably short sellers by and large are somewhat born not made.
Anyone can learn the research but you have to be able to take the concept that everyone almost all the time is going to be telling you you’re wrong, and that’s just really really hard, and there’s lots of academic research that backs that up.
You can watch the entire discussion here:
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