stock meant that short selling losses added up slowly but consistently over the course of many months a number of factors contributed to tesla's surging stock price including the company's flip from losses to having five successive quarters of profits its inclusion into the s p NUMBER_TOKEN index and the announcement that hertz ordered a hundred thousand cars for its rental fleet and most of all an enthusiastic shareholder base of retail investors who love elon musk and the products that he makes short sellers that bet against tesla are estimated to have lost a combined NUMBER_TOKEN billion dollars in NUMBER_TOKEN and even more in NUMBER_TOKEN. okay so probably the biggest stock market story of NUMBER_TOKEN was of course the emergence of retail investors and their involvement in short squeezes in what became known as meme stocks even though retail investors have been putting their money to work on wall street for more than a century they've never had such an influence on single stocks as they had this year it's probably been obvious from the start of this video that i'm working in chronological order and that numbers two and one on my list would be amc and gamestop these squeezes initially looked like they would pass quickly like all of our earlier examples but they continue on to this day the sec report on the memestock short squeeze tells the story of an army of new investors at one point reaching nearly NUMBER_TOKEN million new traders per day opening brokerage accounts to join the feeding frenzy over these stocks whether driven by a desire to squeeze evil short sellers and profit from the rise in the stock price or by a belief in the fundamentals of these companies these two companies were big news in NUMBER_TOKEN. retail's unwavering love for these two stocks is tied to two main factors the expectation of a soon to arrive short squeeze and a bet on the resurgence of the businesses following the worst of the coronavirus pandemic it's difficult to give a short summary of events for these stories as the squeezes are still ongoing but the fact that investors boosted these stocks at a point where they were on the rocks meant that they were able to raise additional capital this meant that they could come out of the pandemic in a significantly better financial shape than they were in at the start it's not obvious to me based on financial history that overpaying for a stock in this manner makes much sense from an investment point of view but people are entitled to do what they want with their money we'll have to wait and see how these squeezes eventually end but there are possibly lessons investors can take away from the earlier examples that might apply to these stocks as i've mentioned before on this channel in the long run the stock market tends to drift up at around seven to ten percent per year short selling is thus a bit like swimming upstream in many of the examples we covered even when short sellers were right in the long term about a stock's direction they still suffered catastrophic losses you can also see examples of people who try to profit from squeezing a stock who wipe themselves out entirely you're often better off being on the sidelines in these situations and may be going for the easy wins if you do decide to short stocks you need to have a really good approach to risk management don't forget to check out our video sponsor the daily upside by clicking on the link in the description it's a great newsletter that i can firmly recommend if you enjoyed this video you should watch this one next where i go through the sec analysis of the gamestop
START_SPONSOR_TOKEN don't forget to check out our video sponsor the daily upside by clicking on the link in the description it's a great newsletter that i can firmly recommend if you END_SPONSOR_TOKEN