Jim Chanos Is A Master Short Seller And In This Video He Demonstrates His Incredibly Astute Perception Of Markets | Exploring Markets

Jim Chanos Is A Master Short Seller And In This Video He Demonstrates His Incredibly Astute Perception Of Markets

Here is a quote from the legendary short seller Jim Chanos. After the quote you'll find a video of an interview that Chanos once conducted, and it's also where this particular quote comes from. The video is very insightful and this quote partly demonstrates that:
“What I like to point out is that almost everybody that will view this video is the beneficiary of a positive reinforcement cycle in their life. That is they were told to study hard by their parents, go to good schools, get good grades, go to better schools, get a good job, work hard, get promoted, and be paid well. This is the so-called virtuous cycle. 
Studies have shown that most rational people, including people that fit the virtuous cycle profile, find that their decision making breaks down in an environment of negative reinforcement. The ultimate example of which would be interrogation, where your ability to withhold information is broken down by various physical or mental techniques. 
If you think of Wall Street, it’s a giant positive reinforcement machine. Basically, I come in every morning, flip on my phone and check Bloomberg at 5:00 AM. Of the hundred short ideas that we have in our global fund, I can pretty much predict at any moment that there’s going to be about twenty to twenty-five percent each day where there is some sort of commentary, research report, analyst buy recommendation, estimates raised, or CEO on Bloomberg or CNBC. And generally, it's noise. Generally there’s not much information or content in that, but it’s nonetheless a noise representative of positive reinforcement. It's why you should be investing in company “A,” “B,” or “C.” Most people don't notice this because they're in the business of going long securities. I like to say however that this is the music that plays in the background of the investment world. 
If you’re a short seller, this music is negative reinforcement. You're essentially being told that a quarter of your portfolio every morning is wrong and here's why. 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.”