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DDR Corp. Message Board

  • kew1951@sbcglobal.net kew1951 Nov 20, 2009 11:02 PM Flag

    Are shorts evil?

    Or just sick negative people?

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    • Nope they arent. Shorting is just a business move stating that something is overpriced. Its not different than overpaying for an equity when its worth less than sale value. The problem with your analogies is that nothing was actually "stolen," and the companies condition does not really change because its operating status is not effected by its share price.

      A company making $100,000,000,000 an hour can have a market value of $1 if every trader decided that its shares only worth so much. They still make $100,000,000,000 an hour regardless of the share or market price. Nothing changed. Nothing was stolen. Only thing that changed was ownership status. Of course this is not a realistic example because only an idiot wouldnt pay $1 for a company that made that much money ;-) but then again we saw a lot of idiots last year around March.

      The only thing I dont like about shorting is that permission is generally implied when you sign on with a broker. I think that if someone wanted to use my shares to short with, then I should at least have a say in the matter. Shorting is just a vehicle for brokers to make more money. It has no real effect of the market over the long run. Just watch your margins and you will be fine.

    • how so? what does evil, sick, or negative have to do with shorting?

      I'll short a stock, sector, or market when I think it gets overbought--making an investment based on my research to support my family. Wow, is that evil?

      Do you even know how shorting works? Here's a good FAQ:
      http://www.fool.com/FoolFAQ/FoolFAQ0033.htm

 
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