Task 1:
Find an article or a video related to this topic (The Nature of Investment and Risk Analysis) and then summarise it in one paragraph
Task 2:
write a paragraph as a reply to a classmate post discuss their post for the same topic.
One type of investment that we discussed was short selling, where an investor benefits from
the decline in a stock price. This type of investment involves the sale of a security that an
investor has borrowed. In class, we discussed how financial analysts, hedge fund managers
and other high profile investors can use their position to affect stock prices to benefit
themselves. For example, a stock analyst who has bet against a particular stock, can book an
interview on a TV show to explain the negative aspects of the company. This can act as a
self-fulfilling prophesy the benefits the analyst.
In 2018, two billionaire investors, Carl Icahn and Bill Ackman, exemplified the benefits and
downsides of publicly short selling. Bill Ackman announced that he was betting against the
company Herbalife which damaged the company’s stock price. Then, Carl Icahn publicly
advocated for the firm. This led to a five year battle between the two billionaires who
consistently fought over their opinions on Herbalife. In the end, Carl Icahn was victorious
and significantly benefited from his public approval of the company. Ackman’s strategy to
short the company failed because he was unable to convince investors that Herbalife’s stock
price was overvalued.
https://www.cnbc.com/amp/2018/03/01/carl-icahn-on-herbalife-win-over-ackman-i-enjoy-agood-fight-especially-when-i-win-it.html (Links to an external site.)Links to an external site.
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