Warren Buffett & Charlie Munger: Short Selling

Warren Buffett and Charlie Munger explain their reluctance to short stocks. From the 2001 Berkshire Hathaway annual meeting.
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[@TheIcelandicInvestor]

You're gonna see a lot more of overvalued stocks than undervalued. Amen

[@AdamTrupish]

More opportunities but shorting involves timing accurately which is the difficult part

[@MrMawnster]

Ha. Such a noonish view. What they never talk about...or maybe never learned is Valuation is relative. It's bullshit. It's relative to the business/credit/macro cycle. These two dweebs made nothing between 2000 and 2008

[@jburg636]

@@MrMawnster Think they have a bit more money and experience than you 🌝

[@MrMawnster]

@@jburg636 At my age, he didn't. Period. We'll see when I am his age. Just because something is done one way doesn't mean it's the only way. My performance record since I've started is above his. He bought the '08 dip late even. I started with about 2k, several hundred k now ;) Quant beats value shite every time...why? Because value investing is a trap or makes you sit in hit for years or paralyzes you

[@fraserwing8744]

@@MrMawnster could you please explain to me what you mean by "quant" (I assume that quantitative) being better than value investing? Thanks. Nice work on turning the couple grand into six figures. 👍

[@InvestorCenter]

It’s always been interesting to me about how Buffett has been able to spot fraudulent companies early but never actually shorts the company

[@candyfloss184]

He reads a lot.

[@kolokolok]

He once said something along the lines of “we’ve seen so many overvalued companies but we never shorted them because you never know how long the bubble would last”; similarly, in this video he did mention the promoter/crook being able to keep stock prices inflated with their promotional narrative.

[@forza-marco]

@@kolokolok bingo. You can go broke waiting if it continue to inflate.

[@RealAnthonyJones]

Case in point NKLA. Practically the world sees it's a facade at this point but its stock just refuses to die a quick death.

[@InvestorCenter]

@@RealAnthonyJones great example

[@knmfujiwara]

When you're as big as Berkshire - shorting is not worth the risks or the returns. It's a small to medium size game with huge risks.

[@tom7914]

yes why would they even bother . they make millions if not billions just from dividends

[@jakw97]

Hedging long investments with shorts is not stupid if you have 100k or 100 billion. I think they have short options in all kinds of things, but they don't disclose that for political reasons.

[@dgjFOURlife]

Shorting is a game ill watch, but never play GME is a prime example

[@allahbless2278]

L

[@purplerings1969]

I will go opposite and squeeze them shorts. Especially GME

[@Je.rone_]

Shorting is a risky game😬

[@itoldyounottotouchit3336]

People should listen to these guys more. Especially Charlie Munger.

[@dariusashouri2439]

Then who listen to Jim Cramer and clown at congress , White House?

[@Mytimenow123]

Really, and do what?

[@niksarass]

Baby eater

[@dariusashouri2439]

@@Mytimenow123 making money in long term as real investor ? and avoid stupid things like short term gambling and etc?

[@landonpelant9909]

No, keep them poor

[@diseasefire]

i guess bill ackman missed this meeting

[@exoxy]

Bills probably lost more on the short side than he's made in other areas

[@Sills71]

@@exoxy not even close.... Ackman has lost money shorting but has made a TON otherwise

[@chiquita683]

Ackman is up 70% this year, where's buffet

[@diseasefire]

@@chiquita683 not because of a short though

[@exoxy]

@@chiquita683 No arguments there. Ackman killed it in 2020

[@harrisonwintergreen1147]

Shorting a stock is like betting on the exact minute the Titanic goes under. We all can see it's in trouble but that doesn't mean it's smart to bet on sinking at 12.00 vs 12.01

[@Ikaros23]

It`s madness to do it in illikvid stock like GME or like Michael Burry did in the Big Short. It was a foolish bet. Til this day i can`t understand why i didn`t just find some companys in real estate sector that was listed on the exchange and short them or use options. If he thought the whole sector was going down then why not just short let`s say 20 companys. Instead he made this deal with Goldman where they where the only other part in the deal and was the market maker at the same time with a HUGE conflict of interest. Short term trading is stupid in the first place, but shorting is just the most extreme risk that a person can take, with almost no upside

[@joshreddy4278]

If something says Warren Buffett, I watch it

[@OlonLife]

Just on KZbin or also on YouP0rn?

[@mr.futurestrader2115]

Imo it’s for day trading. If a stock is on a downtrend over the daily and you wanna swing the downside just take an options trade. Set risk. Margin overnight fees on borrowed shares will eat you alive.

[@ravimalik283]

Oh boy! When he started to describe the "Promoter or Crook" paradigm where CEOs would just peddle BS and lies to inflate the stock price, I couldn't help but think of Elon Musk

[@pawan3247]

if the ceo can deliver what he promises i don't think he is manipulating.Obviously tesla has been continuously improving its sales every quarter.

[@manuelp7472]

@@pawan3247 Musk doesn't even come close to delivering what he promised. What a joke!

[@harm991]

Numbers, sales and my eyes don't lie

[@kaashee]

@@harm991wel said

[@hazonrotbart8]

Exactly. Musk increased the value of Tesla by raising cash worth more than its prior total market cap as it ran up in 2020-2021. The cash Tesla has was worth as much as the market cap of GM and ford. And yet people kept giving him the money. Best part is he tried to offset the dilution to his stake by giving himself a massive stock compensation for running up the price of the stock with grandiose promises

[@lashlarue7924]

"The market can stay irrational longer than you can stay solvent." - Buffett

[@nishantchandra2876]

Actually Keynes said that

[@CmpdKnwl]

@3:40 Hey this sounds like SPACs and Chamath

[@brunomatias9124]

It is tempting. The nature of securities markets leads you to think that more stocks are overvalued - with that, you might think it is easier to make money by shorting. It isn’t… the looses are disproportionately higher by being wrong shorting… The basic principle is, you can run out if money faster than the promoter can run out of ideas. It is very painful. It is easier to make money on the long-side. Being wrong when you’re short is very unpleasant. If you wanna be miserable, be short something who keeps going up.

[@ihavemasochism]

I'm sorry but this has to be what the old muppet characters are based off

[@SGTShootToKi11]

And the fact that they have a "rich persons' laugh kinda makes it more the sus.

[@st0a]

Cope 🤣

[@danjuhl5134]

Sounds like they are discussing Tesla

[@thegrey53]

Don't let the Elonherd come after you

[@ascensionblade]

You don't get Tesla is all. Perhaps you think Amazon is just a great Barnes & Noble bookstore competitor.

[@ericchdjdjnx]

@@ascensionblade Good comparison. It took amazon about 10 years to get back to where they were at their peak during the 2000 dot com bubble.

[@rareliquid]

Gamestop brought me here, Buffett made me stay

[@swissarmyknight4306]

Shorting stocks is always incredibly dangerous. Stocks are biased upwards, the market can stay irrational longer than you can stay solvent, and the potential losses on a short are infinite. If you screw up a long position, the most you can lose is your cost basis; if you screw up a short position, you can lose everything. I'll leave short bets to people who know a lot more than I do, because I'm smart enough to know what I don't know.

[@aladdinkayqubad1645]

Who’s the champ that runs this channel??? I wanna know about him!

[@andrerothweiler9191]

I never short because you mostly lose money and never use options because they are weird and difficult. I found an easy strategy to buy a great company when it dips. I do it for years and make between 15% - 40% y/y

[@slaphead3791]

Most people want to get rich fast, that is the problem

[@playerzero2236]

Dude, you just sell first and buy later.

[@andre-nunes]

Buy the dip

[@JB-sz4wy]

These guys know a lot u know them not personally but through my father's interest in stocks. It is surprising how many people even my older boss and bank trainer where I work do not know what short selling is It's not a good idea because you have to repay for stock you borrow sold essentially and many can go up much more than down. Alsoi am not permitted to short the company I work with. Short sellers bet on the marketto go down and will even try to run down businesses to achieve that goal which is why many of them don't like short sellers

[@VastKnowledge]

Who else smashed the like button before watching?😌😌😌

[@LV-ei1ce]

Warren buffet I wish I had started listening to you ten years back :(

[@samiam7342]

Im surprised they did not also talk about the theoretical aspect of making profits from the decreasing value of a company , sector or market. It goes against everything Berkshire stands for.....they want to make money due to the growth/success of an business/economy........growth is good for everybody......success breeds more success!

[@KennTollens]

How much money would you pay to be 25 years old right now.

[@tombuell2782]

Well I am 25 so I guess nothing?

[@donnghia]

If the current hedge fund listen to Him, you never see something like the GAMESTOP ....!

[@ElliottM-ck2wg]

RIP to Charlie Munger (just died 29/11/23 aged 99)

[@gilt4523]

WHO'S HERE CUZ OF GME??? 🙌💎

[@vinodvaddi]

Pretty much everyone.

[@alexseip8233]

"When two people each own over 50% of something, it's going to be interesting." - WB

[@harmhoeks5996]

Are you still holding?

[@nicopossegger7111]

@@harmhoeks5996 still

[@chrisnelson3046]

Yes​@@harmhoeks5996

[@carstenf279]

Cant wait to hear these guys comment on Gamestop :)

[@harmhoeks5996]

To the moon

[@9mmkahr]

Lol!

[@supragraf]

I didn’t know how exactly, but I knew Charlie would mention Ben Franklin in this 😂

[@shamsnarokobi799]

Thanks for the upload

[@knmfujiwara]

Short selling is dead. That's the new normal.

[@knmfujiwara]

@Official Purkki You're right. I should amend it to short selling no longer being feasible, practical, profitable as it once was in general. More accurate.

[@whatsgoodmyguy4391]

No, it will be here forever. Gme was fun, but the house always wins. You will see.

[@tongandeathgrip901]

@@whatsgoodmyguy4391 the new technology has changed that forever. My son and his mates invests in the stock market. He's 18!!! There will be no going back.

[@pranjayarora8115]

Procapital ne bola tha reliance industries ke shareholder automatically reliance jio ke shareholder honge AISA HUA NAHI

[@ericguo8209]

Still true in 2020

[@Transfunctioneer]

You face unlimited losses unless you’re a hedge fund.

[@GaryTheExpert_com]

In relation to the question of shorting positions. Did they have Stop/Losses back in 2001? And if not, does anyone know when they got added into the world of trading? Thankfully we have these nowadays to make trading less risky

[@Cobrax23]

Hi, this might be a bit late to answer but I would assume stoploss orders were already a thing in 2001, as internet trading had existed for a few years and even before that, a stoploss is basically just telling your broker to sell under a certain price, which a human can easily do for a fee. However, while they may be useful when actively trading stocks with high leverage or something like that, you should probably stay away from those if you're investing for the long term, or are shorting a stock, stock prices can move a lot for reasons pretty much unrelated to the underlying business, if you feel like you need a stoploss for a position you should probably reconsider your thesis.

[@GaryTheExpert_com]

@@Cobrax23 nice one man:) Never even thought that you could just ask the broker haha!😄🤘🏻

[@Cobrax23]

@@GaryTheExpert_com Well brokers used to be actual humans, so I'm assuming you could tell them "if stock X trades below $Y a share some day then sell my position ASAP" or something similar, of course you would not get the same degree of precision you get now but it would still do the job

[@NbyD]

stop losses often dont help you much-- especially when your position size is above retail levels.

[@Ikaros23]

He who sells what`s isn`t his`n, must buy it back or go to prisn

[@angusm9419]

February 2020 would have been a great time to be short oil.

[@G-host0069]

😂

[@G-host0069]

These two here just gave me all of their secrets….. they’re short sellers deep down

[@samsonsoturian6013]

Warren shorted stuff early in his career, but found the same thing Alfred Jones (the original hedgie) found where you would be right most of the time but when things go wrong they go very wrong so ultimately it doesn't pay as well as you'd think

[@sergiobowers6930]

It's pretty easy to short, and do it with confidence when the FED bails-out your top ten holdings every five years, and five of your top ten holdings are banks, in other words, when you can short knowing the FED will pay for your losses, get real. C'mon.

[@sergiobowers6930]

I like how he said Berkshire is going to stay away from shorts, that makes me consider wanting to buy his stock, however, his bank holdings short with impunity, it's a mute point in 2020, everyone knows the House always wins & the Casino is rigged, lmao.

[@RealAnthonyJones]

@@sergiobowers6930 most of the biggest players in the game seem to rotate in and out of positions on an 18-24 month timeframe so if their selling 2019 positions they are probably just rebalancing their portfolio

[@peacerespect98]

Making money out of thin air.

[@zedleppelin6466]

What’s your point

[@candyfloss184]

Hatty Green was never short.

[@DaveJenvey]

It is so tempting to short Tesla right now, but you just don't know how long the Tesla bubble is going to last. This is a good video for a lot of investors, because timing when a bubble pops is near impossible. Maybe it is time to go short when the Fed raise interest rates?

[@zachcombs9103]

Agreed. But impossible to predict when the fed will raise rates. And by the time they do, the market will have reacted

[@epimaz]

Tesla has way too many catalysts to be worth shorting tbh.

[@jiggig]

Go for it.. Tesla will hit $3000 within 5 years.

[@rg7535]

4 consecutive profitable quarters, and it's now a S&P 500 company. If you want to short it, you should probably make sure you have some friend that will allow you to stay at their place when your entire net worth is gone.

[@montestu5502]

@@rg7535 They are only making money selling offset credits. With more and more car companies making electric vehicles, that revenue stream should dry up.

[@foursnips]

why does Munger look like an animatronic character from chuck e cheese? 😂

[@BLUEGENE13]

they can't see the audience well, so they don't know what facial expressions to reciprocate with

[@artrock8175]

I was really hoping someone else would notice that. xD He's either an animatronic or a cybernetic organism. Living tissue over a metal endoskeleton. He was sent back from the future to protect Warren Buffet. He's scanning the audience for threats in case he needs to bust out the minigun he's hiding under the table.

[@DaIeDenton]

Wasn't this the guy who called Amazon a bubble? hehe.

[@maunikailan2485]

The guy who has more money than we?

[@gooseholla1]

And who would have had even more if he bought amazon but didn't believe in it...

[@vanshkhanuja8611]

@@gooseholla1 you surely don't understand investing

[@edwardbenes5015]

fun chat Thanks

[@ScottFerreira]

💎🙌

[@RicardoMontee]

5:42 haha, "it would never work on a Berkshire scale", Griffen and Citadel have proven you wrong, Warren.

[@iknowsitall]

They look like the bank goblins in Harry Potter

[@harmhoeks5996]

It's hard for ugly men, you have to be successful in business. Why carreer women want to be miserable i don't know

[@960john]

@@harmhoeks5996 Buffett wasn't ugly as a young guy. His sisters were gorgeous, too.

[@JamesToler]

On the scale somewhere between promoter and crook… sounds like a field of endeavor dreamed up by Madoff Enron & Co

[@eliseocolonjr2133]

🚀🚀🚀🚀🚀

[@shtrzrus]

I've made bank short selling lol just be smart and watch the price movements and use stop losses on the ones that go bad. I've just been shorting the biggest daily gainers each day and by eod or next day it typically will fall then get out of that stock

[@thusspokezarathustra1847]

Lmao I do the same. Bursts of SHORT - LONG.

[@JacobLouis]

It’s not unlimited losses because there’s not unlimited money.

[@DHAGSFU]

It is unlimited losses in theory. Up to each individual to close the trade.

[@JacobLouis]

@@DHAGSFU It’s not unlimited though unless the theory doesn’t account for the amount of money in the world.

[@pranjayarora8115]

Octafx ad financial review monetized channel

[@playerzero2236]

If warren runs into a bear market he can't trade. A good trader isn't limited to long positions.

[@migueleduardo6297]

wrong. He is most active in bear markets...

[@theukadamyt]

They keep so much cash that I don’t think it matters.

[@narz7573]

He would put more money in and get higher dividend yields and more shares.

[@pranjayarora8115]

4:39 MIN TECHNICAL WRINKLE I SHORT STH

[@ronniedelahoussayechauvin6717]

Crimes

[@tacticalheadlampwithstrap3184]

I never really liked Warren. But when I read about him and Charlie. I decided I want to own a share of Berkshire class a someday.

[@playerzero2236]

The big money sits on the short side of the market lol

[@jasonq4816]

That's working out soooo great for Melvin and Citadel right now!

[@montestu5502]

@@jasonq4816 It is working for Citadel.

[@whatsgoodmyguy4391]

The two biggest crooks in finance. Please welcome Mr. Insider trading....

[@grizz6582]

I don't understand why people elevate these guys. They fix the game plain and simple.

[@akashgarg9776]

Lol your accusing Warren Buffet of Insider trading? How? He doesn't even trade! He makes long term bets, you can't insider trade on those! Do your research man

[@whatsgoodmyguy4391]

@@akashgarg9776 I do my research, and yes he’s one of the biggest insider traders in the world. Wtf are you talking about. He buys the stock in his personal account and then for his company and then buys the firms out at a premium at the expense of ten shareholders. Get yourself a dollar and buy a clue 🕵️‍♀️

[@akashgarg9776]

@@whatsgoodmyguy4391 How is buying companies out insider trading? What insider information does he have? Everything you described is legal. And Berkshire is not an activist hedge fund, its well known for keeping sections independent. Stevie Cohen insider traded, so yes there are firms that get wealthy off of insider trading. But not Berkshire. And I dont understand ... it is impossible to insider trade if you own 100% of a company! There is nothing to trade! Which is Buffets strategy! So the accusation doesn't make sense. Its not about whether you like the guy, I disagree with plenty of his positions, but its mathematically impossible to insider trade if you don't ever sell. And Buffet doesn't sell. I dont think you know what insider trading is.

[@whatsgoodmyguy4391]

@@akashgarg9776 Do you smoke crack ? You don’t understand investing apparently. He buys the stock PERSONALLY. Company buys the same stock, company takes over the same stock as a buy out. It’s insider trading dude. Hes a democrat so gets away with it. He does it all the time, buys a company guess what ? No more dividend payments, he keeps them.

[@jamesianv]

Everyone treats buffet like a Saint. How many plastic bottles does Coke create every day? Not to talk about obesity from refined sugars. And he laughs his way around .

[@BobfromSydney]

He drinks it himself. I agree it's not the best business in terms of sustainability or public health impacts but I think there was a lot less awareness of negative effects of sugar bank when they purchased Coca Cola in the 80's. Back then I think the public were just aware of the link to tooth decay and diabetes but didn't fully understand the severity of the impact. Even now the majority of Coke ads are for the sugar free versions, which is a (commercially necessitated) step in the right direction.

[@narz7573]

Its business , not ethics. You're using a electronic device too , most our products are cheaply produced. It's not practical to find a moral ethical flaw in everything. I'm still drink a coca cola at a cinema... And use my smartphone.

[@jamesianv]

they are good, I drink coca cola Zero at home now, and his staying away from woke issues and putting one on the desk didnt hurt the sale. Sugar is very hard to avoid. @@narz7573

[@Chuddie14]

Poors killing themselves is funny baby bro

[@Mytimenow123]

He reminds me of Madoff, he talks and says nothing. There is a rat there somewhere.

[@Mytimenow123]

@Flip ArrachiI bet that was Madoff's favored phrase. Oh, and he thought you were the actual idiot.

[@Mytimenow123]

@Flip Arrachi I did not lose any money to Madoff or anybody but looks like you might be soon..

[@VinylMemoirs]

Put away the percocet irene

[@playerzero2236]

He's such a boomer. The risk is identical, you define it before you enter the trade lol.

[@diseasefire]

You are comparing going short vs going long while he is comparing going short vs owning the stock

[@knmfujiwara]

One can never truly know how risky an investment is. You thought it was just a jab but it turned out to be a knockout one.

[@jeanlucbergman479]

Your losses for shorting can be unlimited. For owning stock they are fixed. The risk absolutely isn't the same.

[@BB87787]

definitely take advice from the “shutup boomer” bro KZbin commenter as opposed to the greatest investor of all time.