Why a short position is dangerous and how the market can turn all logic on its head...
Sometimes it's not a lack of knowledge, but an excess of confidence that ruins investors.
Last week, a Korean blogger wrote a heartbreaking letter that has already gone viral: "This week I shorted fried chicken companies in Korea and lost $472,085.
I thought there was an opportunity here given the population decline in Korea and recent trends towards healthier and vegan diets.
I did some research on consumer trends in Korea and decided to short chicken companies in Korea generally.
Unfortunately, at the beginning of the week, Nvidia CEO Jensen Huang ate at a Korean chicken restaurant called 'Canbo Chicken' in Seoul, and a photo of him enjoying fried chicken and beer spread rapidly.
Shares of Korean chicken companies surged by 20-30% and I faced a margin call (request for additional capital).
Everything is gone.
I don't know how to go on. How did I not know that Korean fried chicken is the future of artificial intelligence?"
This story might sound funny, but it's a particularly expensive lesson: a short position is not 'the opposite of a long position' – it's a dangerous position with unlimited risk.
If a stock rises, you could lose several times your initial investment.
The market doesn't have to 'make sense' while you're in a position.
Sometimes a tweet, a photo, or a fleeting trend can change everything in an instant.
Risk management is not a recommendation – it's the oxygen for your survival.
Without clear loss limits, even a correct idea can turn into a financial disaster.
And finally, humility before the market. Even logic, research, and self-confidence do not protect against the irony of fate. Because in the stock market, just like with fried chicken, sometimes the heat rises far beyond what you planned.