Summary
Phil uses three examples of catastrophic investment losses to teach what NOT to do: (1) Jim Chanos shorting Tesla at 5% of fund capital — never trade against the trend; (2) Russian billionaire’s son losing $50M trading markets; (3) The Vatican’s Secretariat of State losing on a Hertz Credit Default Swap bet. Introduces Lloyds Bank shorts (Marshall Wace picked the low) and the principle that opinions should never override what the chart is telling you.
Key Claims
- Jim Chanos shorted Tesla to 5% of fund capital — eventually admitted defeat after massive losses. — confidence: high
- Total Tesla short selling reached $38B by end of 2020. — confidence: high
- A stock is never too high to go higher; a stock is never too cheap to go lower. — confidence: high
- Marshall Wace’s record short of Lloyds Bank picked the exact low. — confidence: high
- The Vatican’s Secretariat of State bet on Hertz not defaulting via Credit Default Swaps — Hertz went bankrupt. — confidence: high