Longs always win.
Here’s why time destroys shorts:
- Time Is A Short Seller’s Enemy
Every day a short is open → borrowing fees tick up
Options decay against them
The market can stay irrational longer than they can stay solvent
- Markets Have A Built-In Upward Bias
S&P 500 is up ~10% annually on average over 100 years
Companies retain earnings, innovate, expand
Inflation alone pushes nominal prices higher
Shorts are literally fighting compounding
- The Asymmetry Is Brutal For Shorts
→ Max gain for a short = 100% (stock goes to $0)
→ Max loss for a short = INFINITE (no ceiling on price)
Longs? Unlimited upside. Capped downside.
- Short Squeezes Are Real
$GME. $AMC. $TSLA. $MSTR.
Shorts get squeezed out. Longs get paid.
One squeeze can erase years of short profits in days.
- Even “Bad” Companies Recover
$AAPL was left for dead in the 90s
$AMZN was a “dot-com bubble stock” in 2001
$NVDA was a gaming chip company nobody cared about
Patience + conviction > short thesis every time
The Bottom Line:
Shorts need to be RIGHT → on direction → on timing → on magnitude
Longs just need to be RIGHT on direction and patient
Time does the rest.
