A Jim Chanos Quote That You Cannot Ignore on Wall Street and Short Sellers | Exploring Markets

A Jim Chanos Quote That You Cannot Ignore on Wall Street and Short Sellers


"If you think of wall street, it's a giant positive reinforcement machine. Basically, I come in every morning, flip on my blackberry and check Bloomberg at five in the morning. And of the hundred short ideas that we have in our global fund, I can pretty much predict there's going to be about twenty to twenty five percent everyday where there is some sort of commentary, research report, analyst buy recommendation, estimates raised, or CEO's on Bloomberg or CNBC. And generally, its noise. Generally there's not much information or content in that, but it's nonetheless positive noise. It is why you should be investing in company "A" "B" or "C".

Most people don't notice this because they're in the business going long securities. I like to say this is the muzak that plays in the background of the investment world. But if you're a short seller, this is negative reinforcement. You're being told that one-quarter of your portfolio every morning is wrong. For most people, that becomes a difficult environment in which they continue to think clearly about their investments. There's a constant drum beat of just negative reinforcement saying you're incorrect, you're incorrect."

- Jim Chanos