When someone shorts, his'her thoughts are that the stock is overvalued. So, you borrow shares and sell them. In other words, you are selling something that you believe is overvalued in order to try to profit from it later. So, in your mind at least, you are selling something that you believe to be overvalued to someone else. That's a kind of fraudulent activity, though legal.
Totally ridiculous. A stock bought and later sold is the same thing. You bought it at what it was priced at and sold it what it was priced at. Someone wanted to sell when you bought and vice versa when you sold.
Btw, people buy and then later sell a stock because their thought process is that they need the money right now for whatever reason, not necessarily because they now think it is overvalued. Short sellers, on the other hand, do not have that way of thinking. Their thinking is not that they need to short because they need the money. Rather, they are shorting because they believe the stock is ovevalued, PERIOD.
And I'm not saying it's outright fraud to short sell. Because it is legal. But, just saying...
This highlights what illogical thinking is like. They think one way, but cannot think the other way around or the contrary portion of the same issue. Needless to say, people with mindsets like this tend to get frustrated a great deal easier because they cannot wrap their heads around issues, resulting in illogical behaviors due to false sense of reality.
When someone LONGS, his'her thoughts are that the stock is undervalued. So, you buy shares and hold them. In other words, you are buying something that you believe is undervalued in order to try to profit from it later. So, in your mind at least, you are buying something that you believe to be undervalued to someone else. That's a kind of fraudulent activity, though legal.
You wrote: "So, in your mind at least you are buying something you believe to be undervalued to someone else. That's a kind of fraudulent activity, though legal."
Well, not necessarily. Perhaps when you bought it your thinking was that it is undervalued. And you hope to sell it to someone else who likewise thinks it is undervalued even at the new, higher price. Or even if the new buyer believes he is paying fair value. Short selling, however, means that the shorter believes it is OVERVALUED. The fact that the buyer of such shorted shares believes otherwise is no the point. The point is that from the SHORT SELLERS PERSPECTIVE, he believes that he is legally defrauding the buyer by selling him what he believes to be overvalued shares..