I often hear the suggestion that people should short stock when they don’t believe in a company. I don’t think that it is a very good piece of advice.
Shorting is notoriously difficult and carries the possibility of unlimited loss. Even if you believe that a stock will crash, small errors such as timing the crash one year too early or using a miscalculated stop order to stop shorting too early can lead to massive losses. Determining the actual risk involved is not very straightforward. Shorting is often accompanied by risk-managing tactics such as hedging that also require careful considerations.
Due to all this, even if you believe a stock is going to crash, shorting is usually a bad idea. Basically, the skillset required to short properly is different from the skills used to predict whether or not AI will succeed commercially or not. An expert in AI can do the latter prediction, but the former requires you to also be specialized in complex investments. If you are “only” an AI expert, bets offer a much more managed risk profile.
The bet would only be for a nominal amount of money (e.g., $20) to the charity of the winner’s choice. The purpose of the bet is not to make money but for people to publicly state and commit to specific, dated predictions with firm resolution criteria.
This is the same philosophy behind longbets.org (a project of the Long Now Foundation), whose winnings all go to the charity of the winner’s choice. The minimum you can bet there is $200. Long Bets has been around since 2002, and the first bet is about AGI: https://longbets.org/1/
Bets for large sums of money not for charity are not legally enforceable (and possibly, but not necessarily, technically illegal, depending on jurisdiction), so the money involved is always theoretical anyway.
This should be fairly realisable as a short on NVIDIA, may I ask why you’d prefer a bet?
I often hear the suggestion that people should short stock when they don’t believe in a company. I don’t think that it is a very good piece of advice.
Shorting is notoriously difficult and carries the possibility of unlimited loss. Even if you believe that a stock will crash, small errors such as timing the crash one year too early or using a miscalculated stop order to stop shorting too early can lead to massive losses. Determining the actual risk involved is not very straightforward. Shorting is often accompanied by risk-managing tactics such as hedging that also require careful considerations.
Due to all this, even if you believe a stock is going to crash, shorting is usually a bad idea. Basically, the skillset required to short properly is different from the skills used to predict whether or not AI will succeed commercially or not. An expert in AI can do the latter prediction, but the former requires you to also be specialized in complex investments. If you are “only” an AI expert, bets offer a much more managed risk profile.
The bet would only be for a nominal amount of money (e.g., $20) to the charity of the winner’s choice. The purpose of the bet is not to make money but for people to publicly state and commit to specific, dated predictions with firm resolution criteria.
This is the same philosophy behind longbets.org (a project of the Long Now Foundation), whose winnings all go to the charity of the winner’s choice. The minimum you can bet there is $200. Long Bets has been around since 2002, and the first bet is about AGI: https://longbets.org/1/
Bets for large sums of money not for charity are not legally enforceable (and possibly, but not necessarily, technically illegal, depending on jurisdiction), so the money involved is always theoretical anyway.