The Texas Stock Exchange + Is Short Selling a Dying Strategy?
Jun 10, 2024
46:08
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The podcast discusses the new Texas Stock Exchange and the politicization of exchanges. They delve into the decline of short selling due to a 15-year bull run. The hosts share opinions on Texas, explore the role of short sellers, and predict GameStop stock dropping below $20.
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Quick takeaways
Establishment of new Texas Stock Exchange challenges traditional exchanges, providing less regulated alternative for companies.
Short selling faces decline due to prolonged bullish market, resulting in reduced returns for short sellers.
Deep dives
Democratizing Venture Capital Investment
The Fundrise Innovation Fund aims to democratize venture capital investment, providing individuals with access to a previously exclusive asset class that was mostly available to institutional investors. This fund has raised over $100 million and holds positions in major pre-IPO tech companies, offering retail investors the opportunity to get in early and diversify their investment portfolios.
Changing Trends in Hiring
Recent trends show that 19% of employers claim to have had college graduates bring their parents to job interviews, highlighting a shift in hiring dynamics. This unexpected behavior raises questions about the evolving dynamics between employers, job candidates, and their families, reflecting changing norms and expectations in the job market.
The Texas Stock Exchange Initiative
The establishment of a new national stock exchange in Texas led by investors like BlackRock and Citadel signals a challenge to the dominance of traditional exchanges like the NYSE and NASDAQ. This initiative aims to provide a less regulated alternative to existing exchanges, potentially impacting the financial markets and offering a new platform for companies looking to list their stock.
Declining Trend in Short Selling
Short selling is experiencing a decline with the average short interest in S&P 500 companies at its lowest level in over 20 years. This trend is reflected in reduced short positions taken by activists and renowned short sellers. The decrease in short selling activity can be attributed to the prolonged bull market, diminishing returns for short sellers, and potential cyclical nature of this trend.
Scott shares his thoughts on why the new Texas Stock Exchange could be an appealing choice for certain companies. He also explains how it's a symptom of a larger issue: the politicization of everything. Then Scott and Ed break down the role that short sellers have historically played in the market and why the unprecedented bull run of the past 15 years has diminished the strategy’s returns.