What Other Bloggers Are Saying

This rant by Peter Boockvar expresses my sentiments exactly.  I see nothing wrong with short selling and short sellers:

"Short sellers (SS) didn’t get people to buy homes with no money
down, SS didn’t convince people to buy homes with teaser rates, SS
didn’t convince people to lie about their income on their mortgage
applications, SS didn’t tell banks/brokers to lever up to such huge
levels, SS didn’t tell Greenspan to cut rates to 1% and leave it there,
SS didn’t invent FNM and FRE, SS didn’t tell the OTS, OCC, FDIC, Fed,
SEC, FFIEC, FTC, FHFA and all the state regulators to twiddle their
thumbs all day, SS didn’t tell the rating agencies to rate AAA on
anything that moved, SS didn’t tell banks to lend to commercial real
estate investors on a property where the rent didn’t cover the mortgage
payment, SS didn’t tell the average consumer to spend more money than
they make, and borrow difference.

Short selling is a legitimate form of speculation that fully enhances market liquidity and price discovery."

Of course, it's not 'short selling' that represents the perceived problem.  It's naked short selling, defined as selling stock and failing to deliver the shares. It's been against the law for a very long time to sell shares when you cannot borrow certificates representing those shares.  That's the rule that has not been enforced, but it's easy for crybabies to blame those who legitimately sell stocks short.


Jeff at The Stock Bandit echoes a favorite theme of mine: The Importance of Losing Small:

"Losses are inevitable, but small losses are easily overcome.  I put that first because if you don’t read anything else here, I want you to be sure and see that…In fact, that one statement could be considered the key to my trading.  I remind myself of it often, and when I’m staying disciplined, I am able to see it in action… the trader who is able to lose small is able to stay in the game. 
He’s able to survive, which means he’s able to profit.  And that of
course means he’s able to thrive.  Keeping those inevitable losses at a minimum carries with it a pair of huge benefits…First, when you’re wrong, the damage is far from devastating…Second, confidence stays high, and that’s a major factor for a successful trader.  Confidence should be protected just as vigilantly as one’s capital, for it can be considered your psychological capital."





Comments are closed.