The Bitter Man Who (Accidently) Invented Short Selling

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#history #business #finance

Written By: Sam

Video Created By:
Svibe Multimedia Studio
Editor: Cardan
Media Gatherer: Andrea Rivas

Footage Courtesy of: Getty Images

Music Provided By: Epidemic Sound

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Revenge inspired short-selling, not a need for market efficiency and liquidity.

But some say short-selling doesn’t even do that. They say short-selling only ever leads to more volatility and crashes. [1]

They blame the 2010 Flash Crash on high-frequency trading and short sellers. [2]

They say the 2008 Financial Crisis was subprime mortgages, credit default swaps, and well… short sellers.

Is that really true? Was betting against the market in the late 00s the primary reason shareholders lost $8 trillion? [3]

Even if it did, many will defend it.

They’d say short-selling is the best way for the little guy to stick it to the fat cats.

Look at GameStop. They say average Joes pulled a fast one on billionaires by playing them at their own game.

Melvin Capital was one of the prominent hedge funds shorting GameStop. But after getting trolled by users on the Robinhood app, they lost around $6 billion before closing their doors for good. [4]

That’s bad news for the guys at the top. But for guys at the bottom. To them it’s justice being served.

And it’s exactly what Isaac Le Maire would have wanted.

He was the guy who inadvertently created short-selling when he was trying to take on one of the biggest companies on the planet.

But like many guys trying to gamble on the stock market, he should have quit while he was ahead.

In the end he lost everything: money, family, honour.

Or did he? Maybe he did defeat the Dutch East India Trading Company, and other ‘too big to fail’ corporations.

He just didn’t do it in his lifetime.

- Sources -

[weswest]

Not having short sellers is like hiding the thumbs down button. Toxic positivity only!

[EphReinhard]

We seem to think modern commercial law is British, but more and more we learn the Dutch were centuries ahead of everyone.

[jerrysstories]

3:48 I think you meant, "There was no reward without risk." Risk without reward is easy to find!

[zrebbesh]

My problem with futures trading in general, both short and long, is that it creates a class of people who stand to benefit from disinformation.

[stevojohn]

Newton defined rather than discovered gravity. Anyone who has thrown anything in the air or fallen over has discovered gravity.

[kpuff]

The only people that are upset at short sellers are the people that want to blame someone else for their own actions

[dkennell]

Bravo! Excellent vid, great choice of subject matter. Amazing story, and I learned so much. The dutch in the age of exploration were really so fascinating.

[Robynhoodlum]

This is all interesting, but short selling didn’t cause the 2008 crash. Mortgage backed securities developed in the 70’s and 80’s inflated by speculation did. The shorts were just a way to bail out the sinking banks, it wasn’t the cause of the breached hull or gushing water.😂

[TQFMTradingStrategies]

Short selling comes from contracts for delivery which are arguably some of the oldest commercial deals humans did. We forget that money and metal used to be almost directly convertible to a degree. It seems weird now mostly because we no longer use commodity based currency. But back in the day you would literally borrow copper or silver or gold and sell it to turn into another good, which if that good increased in value relative to copper or gold that good could be sold and turned back to gold which you return to keep the difference. Profiting as the value of the asset you borrowed gold declined. See how that works. But value is relative

[boeingotaku]

Channels like these are always better off underrated!!!❤

[xcw]

Short sellers play an important role but the most important regulation mentioned was that claims that would hurt the company must be supported with actual evidence. If we go after company directors for fraud when they deceive the market about how great their company will be doing, we should similarly penalise short sellers fraudulently talking down the prospects of a company.

[lastspring]

The fact that you used log scale on the VOC portfolio 9:38 adds so much credibility to your research.

[zenastronomy]

short sighted logic.
short selling helps the rich avoid liability by dumping stock and winning on both the bull and bear markets.

someone always is left holding the bag, short selling allows market manipulation by the big boys.

gamestop was a one off. the other million times short selling led to 2008crisis and all the rest. leaving tax payers holding the bag.

[The_Scriptwriter]

Lesson: You don't need to fight every war. Know which one to avoid and which one to fight.

[gtbkts]

Thanks for the awesome content and all the amazing videos!!

[davianoinglesias]

Without short sellers banks would print infinite amounts of money to support the ever increasing demand for loans as people borrow to invest in the stock market

[alehunter]

Exceptional video, i really like the financial genre. Keep it up, pure class mate :)

[Rhombohedral]

One of his descendants looks totally like Isaac Le Maire
See "De wondere wereld van kunstenaar Cornelis Le Mair" and more on his finished works at his birthday "Cornelis le Mair 80 jaar. Meesterlijk Stilleven." here on Youtube = he is a Dutch painter.
Specially when he was younger he is a total incarnation of his ancestor, as 4 months ago Cornelius Le Maire turned 80 years young

[dimagass]

Shorts are too risky, I prefer inverse leveraged💀

[philipramirez]

Wait... But the retail traders weren't the ones shorting. Citadel lost their money because people just kept buying more stock and holding.

I don't see how shorting is a tool for common investors when you're exposing yourself to infinite losses.