TODAY IN AVIATION HISTORY  – Michael

Concorde 001 in the wonderful museum at Le Bourget
On 2nd March two significant aeroplanes took to the air for the first time, the BAC/Aerospatiale Concorde in 1969, and the re-engined Messerschmitt Bf 109 produced by Hispano in 1945.

There were only 20 Concordes built, none of which still fly today, but the Concorde remains as one of only two supersonic passenger aircraft. It also remains as a supreme aerodynamic design, a fine example of international cooperation, and a massive absorber of government money.

The Hispano design, ultimately powered by a Rolls-Royce Merlin in place of the original Daimler-Benz engine and called the Hispano Buchon, might have disappeared from view except that in the late sixties and beyond the remaining Hispano Buchons were used for filming many World War II epic films, most notablyBattle of Britain. Some of the remaining Buchons still flying have been re-engined with the original Dainler-Benz engines, making them more “real” Messerschmitts rather then “Merlin Messerscmitts”

SPEAKER  –  Jeff 

Jeff’s topic was Short Selling. Short selling, or shorting a stock, means that an investor borrows an undervalued stock, then sells it back for less that it is actually worth, making a profit on the deal in the process. How so?

1. As an investor, you look at the market and find a stock that looks as though it might soon lose value. 
2. You contact your broker, asking them to find shares in the stock.
3. The broker locates another investor who owns the shares and borrows them with a promise to return the shares at an agreed later date.
4. You then get the shares, and immediately sell them and pocket the cash from the sale.
5. You the wait for the stock to fall, then buy the shares back at the new lower price.
6. You return the shares to the broker from whom you borrowed them, and your profit is the balance of the cash that you pocketed in step 4.

Of course there will be fees and interest to be paid to the broker, who unlike you is authorised to do this, but in the end you have made a profit – provided you were correct in your assessment that the stock will lose value before the agreed time to hand back the stock.

In a way it is the opposite of what is called the “long buy” which is much easier to understand. There you buy shares when they are at a lower price, and sell them when the value goes up; the difference is your profit.

In the Long Buy you want the shares to rise in value, but in the Short Sell you want the shares to go down. If the opposite happens in the Short Sell, you lose, and in that case the loss can be positively catastrophic. As an example, Jeff told us about Reddit and the console game called Game Stock, where there were massive increases in value, and massive losses for some unfortunate Short Sellers. All pretty scary.

Even though my brain hurts, thanks Jeff!