Unleash Profits Stock Short Selling Returns

● Short-Selling Restart Looms – Truth Revealed

All About Short Selling Resumption and Investment Strategies

1. Understanding the Basics of Short Selling

Short selling is, as the name suggests, an investment strategy where you sell shares you don’t own first and buy them back later to return them.
It’s a way of selling shares without actually owning them, with the expectation of profiting if the stock price falls.
This approach can be distinguished as short (sell first), which is the opposite of long (buy first).
However, the key is that both ultimately calculate profit through buying and selling.
It’s worth noting that a short position has the potential for unlimited losses if the stock price rises, as the purchase price is a variable.

2. The Difference in Order Between Long and Short Positions and Profit/Loss Structure

A long position is a strategy where you first buy shares and then sell them at a higher price to make a profit.
A short position, conversely, involves selling shares first and then buying them back at a lower price to profit from the difference.
In both strategies, profit and loss are calculated by subtracting the purchase price (b) from the selling price (a), but the order in which the variables are determined differs, resulting in different outcomes.
Since short positions are centered around selling, the potential for losses can increase indefinitely if the stock price rises, making risk management essential.

3. Analysis of Real-World Cases Through Experience

In 2016, while managing a hedge fund, I entered a short position due to the issue of selling Company D’s Business Unit A.
Contrary to expectations, the stock price surged as Business Unit A was sold at a bargain price, causing the short position to turn into a significant loss.
In another case in 2019, a construction company faced an issue of unbilled receivables in its Middle East business, leading to a short position, but the stock price rebounded after the earnings announcement.
These two cases show that short selling is not simply an “evil” tactic but a strategy heavily influenced by market sentiment, information asymmetry, and the psychology of others.

4. Fund Manager and Investor Psychology

Fund managers have a complex relationship with investors, as they receive funds from them to manage.
Investors may use short positions to hedge the risk in their portfolios, and market instability can be seen as an investment opportunity.
Many foreign investors were fearful of the resumption of short selling, but fundamentally strong stocks actually saw increased buying pressure, resulting in positive supply and demand dynamics.
Ultimately, short selling can lead to significant losses if misjudged, but with correct information and an understanding of psychology, it can be utilized as a pillar of an investment strategy.

5. Short Selling Resumption Starting Tomorrow and Outlook

With the resumption of short selling tomorrow, misunderstandings and anxieties about short selling are expected to intensify in the market.
However, from the perspective of the principles of short selling, the difference between long and short positions, real-world cases, and the psychology of fund managers and investors as outlined in this article,
If you avoid being swept up in short-term fear and focus on stocks with solid fundamentals, this could be a good investment opportunity.
In particular, we need to re-examine future economic prospects and investment strategies through analysis of specific sectors such as shipbuilding, power equipment, bio, and nuclear power.
The resumption of short selling is not just a negative factor, but an important time when various economic-related search keywords (short selling, stock market, fundamentals, investment strategy, economic outlook) are naturally connected.

< Summary >
Short selling is a strategy of selling first without owning shares and buying them back later.
Long and short positions have different profit and loss structures due to the order of buying and selling.
Real-world examples show how the risk of short positions and market sentiment affect each other.
Fund managers and investors can use short selling as a hedging tool and opportunity.
The resumption of short selling tomorrow may be an investment opportunity in fundamentally strong stocks, beyond short-term fear.

[Related Articles…]
Short Selling Practical Analysis

Investment Strategy Re-examination

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● Tesla, Defense Stocks – Misunderstand at Your Own Risk

Latest Global Economic and Industry Outlook – Leading Industries, Defense, Shipbuilding, Semiconductors, Key Investment Points

[1] Changing Global Investment Environment and Direction of Leading Industry Evaluation

Examines how the market has changed from traditional investment theories in preparation for evaluations to be held in the next 6 months.
Emphasizes that investors’ methods for identifying leading industries have changed, making it risky to apply traditional theories as they are.
The impact of policy changes in major countries such as the United States and Europe, and issues related to Trump, are important points.
It is important to pay attention to how new investment strategies, corporate performance, and economies of scale will be formed in these changes.

[2] Global Defense Industry Outlook and Europe’s Strategic Moves

Europe announced a policy to significantly increase its defense budget and prioritize purchasing over 60% of its parts from domestic products.
Unlike the supply chain changes between victorious and defeated countries after a war, this time, the countries involved in the war are showing greater interest in defense.
The importance of drones and unmanned systems is highlighted due to the war in Ukraine, and the development of anti-drone technology and radar systems is noticeable.
Korean defense-related companies may play a major role in alleviating the anxieties of European countries and securing a comparative advantage.

[3] Shipbuilding and Defense Linkage – U.S. Warship Construction and Overseas Export Strategy

Cases of successful overseas orders with excellent cost-effectiveness in the performance competition of Korean tanks and weapon systems continue to appear.
Opportunities to export Korean systems in the shipbuilding and defense sectors are increasing through cooperation with foreign governments, such as the United States and Europe.
Large-scale warship construction and additional order opportunities are expected due to the linkage effect between defense and shipbuilding industries, and the credibility of Korean technology is increasing.
Accordingly, the shipbuilding industry is also seeking a strategy to export advanced weapon systems along with simple shipbuilding.

[4] Semiconductor and AI Development Trends – Technological Gap and Industry Differentiation

Major semiconductor companies such as Samsung Electronics, Hynix, and Micron are showing different technological competitiveness, and their roles in the market are being separated.
In particular, the impact of Hynix’s HBM yield and Micron’s technological gap on stock prices is significant.
With the advent of the AI era, demand for GPUs and AI-related semiconductors is expanding, and the competitive landscape between traditional legacy semiconductors and new technology products is being reorganized.
Domestic companies such as LG are also succeeding in securing competitiveness in AI models by reducing costs through deep learning efficiency, and global AI investment fever is intensifying.

[5] Economic Slowdown, Interest Rates, and Inflation – Reassessing Investment Strategies

Major countries in the United States and Europe are signaling the possibility of interest rate cuts due to economic slowdown and increased uncertainty.
Overall investment sentiment may be dampened as economic growth is expected to decrease from 2% to 1%.
Risk management across the market is necessary due to the complex interaction of various factors such as inflation, tariff policies, and international political instability.
Both institutional and individual investors should seek investment strategies that consider structural changes from a medium- to long-term perspective, rather than focusing solely on short-term gains.

Summary

Summarizes key issues such as the latest global economic trends and changes in leading industry evaluation methods, Europe’s defense budget expansion policy, drone and anti-drone technology development, U.S. warship construction, and the shipbuilding industry’s export strategy.
Also, the differences in competitiveness of semiconductor companies such as Samsung, Hynix, and Micron, the increase in demand for new products due to AI technology development, and the reassessment of investment strategies due to economic slowdown and the possibility of interest rate cuts are discussed.
Keywords: Economy, Semiconductor, Defense, Shipbuilding, Investment

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