What on earth is going on with GameStop, I hear you ask? Well, here's the long and the short of it.

As advisers, in order to meet the best interest of our clients, we manage money in line with goals, objectives and risk. In most cases this involves buying an asset that will increase in value over time. This is the traditional investment model and is known as long investing.

However, whilst it is not common in Australian markets, you can also invest in the market or an asset going down in value. The technique of profiting from a price fall is called short-selling, otherwise known as “shorting,” “to go short” or simply “short”.

Basically, short-selling is the reverse of how we’re traditionally taught to invest. When shorting, you aim to jump in at a high and out at a low, with the sequence of events also in reverse, since you sell first and buy back afterwards. As confusing as it sounds, this involves selling something that you don’t own.

Over the past week, the biggest story in financial markets is the absurdist long and short of a stock called GameStop, a struggling US video game retailer that became the rope in a high-stakes tug of war between Wall Street suits and a crusading internet mob. The hedge funds were shorting the stock, and the social media mob went long. This created a short squeeze, where the shorters sold their position for a loss, then bought it back, with the intent of making a profit.

But, the stock price has plunged, which means they've made a loss anyway. The stock had its worst percentage fall last night after Warren Buffett announced he won't short anything. The world’s best investor won’t be taking part in any GameStop shorting or rorting, and has called for market reform.

Want to know more? Listen to my interview with Neil Mitchell on 3AW.

In other news, the UK has sought to regulate buy-now-pay-later companies. In my view, this had to happen, as the industry has been unregulated for too long.

The UK government is seeking to enforce greater disclosure of credit rules when signing up customers, more credit checks, and rules on fair treatment of customers who default.

The flow-on effect for Australia is that this is likely to impact local lenders, including Afterpay. Watch this space!