A faint short seller done now said that he expects a major rally in october this is why the hedge fund is set with more long positions versus short positions right now because historically this month always outperformed the previous month oh and don’t get me wrong we have much more alarms than we have shorts again because we were expecting a rally in october but

I think you have to get very specific within that on where you want to take that risk i’d rather take risk in names that you know there’s not a lot of high expectations going into this versus ones like an apple or a microsoft where the pe is much greater than the market there’s a lot of optimism going in and there’s a lot of reasons you could see them coming

In and saying well you know cloud infrastructure is slowing down a bit because amazon sales over the second prime day weren’t that strong or you know there was a big pandemic beneficiary in terms of smartphone sales and that used to be just at the low end to mid range and now we’re seeing the consumer slowdown at the high end which to some degree you saw in

Tesla’s you know average revenue per car that they sold so that’s why we’re being very careful into mega cap earnings next week even though we have more longs and we do have shorts and we think the market’s going to rally in october but the general outlook over here is that you don’t want to set yourself with securities that have a huge expectations he didn’t

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Say that maybe some of them with a lot of expectations could be largely manipulated right if you know that certain security have a lot of people expecting to hit certain number you don’t want to be involved in this security because the security you know there are a lot of big short bets that could manipulate the the future expectations and drag the prices of the

Security down on the flip side on the fundamental side he also said that this most likely some of the stocks he gave an example with netflix that were down 70 80 percent you know show a good relatively good earnings right and they were up three four five percent while uh you know some of the stacks that were down 20 25 especially big tech stocks right they show a

Very questionable earnings and while they were down like 15 20 they were down after reported earnings two three four percent so this is how the huge expectations could drive some of these stocks to go even lower while the good comparison with netflix was that people were already aware that netflix is down netflix will be down with this new art in method which uh

It’s still questionable nobody knows how the people on the consumer will actually react nobody expect nothing there were no expectations around netflix but essentially netflix uh you know was trading even higher very slim part again guys we’re trying to to read behind the lines is that this is done niles right famed short seller he didn’t mention that you know the

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Main reason that you want to stay away from the huge expectations uh securities and stocks he didn’t say that you know there could be different reasons for it it’s you know he probably is aware that the stocks that create a lot of expectations and hype are usually targeted from the shorts short sellers could create different stories build different case for the

Securities to drag them down and well no when you have a lot of attention to certain security most likely you have a lot of contracts you have huge open interests so all this is related to potential profits from the short sellers selling a lot of costs you know and making the stock closing at the at the closest friday below the levels of the most open interest is

The strike price again danios didn’t say that but we tried to read behind the lines as we all know he is very aware of what is happening on the market only question that i have so far is did he actually meant this as well for any security on the market or just for growth stocks or this was targeted in particular industries that were hit the hardest we’re talking

About tech sector it was down 60 70 80 percent something that he referred to because we do have some of the of the short squeeze place which are down 60 70 80 percent from all times high as well so the question is should we just judge by the current gains and losses by the double digit percentage and you can use the same method evaluate any security on the market

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Or you just talk in particular for a certain sector leave your thoughts in the comment section guys and let me know are the shorts target only hype stocks the stocks with extremely strong community or stocks with a huge expectations and pressure from the media subscribe to the channel guys like this video and come back for more thank you give us

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