And the longs are not
?
What are the goals of people who invest for the long term?! To make a buck right? I mean, thatās the reason why I invest. Isnāt that your case too?!
I was attempting to show their intent was to make money not be good as in show āgood behaviourā. Everybody is out to make a buck.
We have been fixing the government for 2021 years A.C. From my point of view, the experiment is conclusive as the incentive for people working for the government earning a little more than a minimal wage is lower than that for heavy weight in capital short sellers.
Could you provide evidence of short sellers distorting the market and gaining from it at the expense of a retail investor?
I donāt have to. I simply stated there was no good behaviour shown.
The Big short of 2008 was not good enough?
It was good I thought. I liked the stylistic interruptions from the pros throughout, novel. If youāre not talking about the movie then again, outcome ; intention.
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Uncovering fraud is a good behaviour. Making money out of it is a reward for that good behaviour. Sure their goal is not to uncover fraud. Their goal is to make money. So is mine. So is yours.
The logical consequence of your reasoning when applied to longs, is that they donāt have good behaviours either. They are equally bad as shorts. Everyone is inherently bad.
The logical consequence of my reasoning is that neither longs nor shorts are neither good nor bad per se. There are good and bad behaviours on both sides. And thereās no one with only good behaviours and no one with only bad behaviours
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hereās something thats bad. selling something you dont even own. thats fraud.
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I havenāt once disagreed with you, only asked for an example of good behaviour from short sellers. One has yet to be provided.
behaviour
/bÉŖĖheÉŖvjÉ/
noun
- the way in which one acts or conducts oneself, especially towards others.
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The point is technically they do own the share when they sell it. They just promise to return a share at some point in the future, and often fail to do so. Thatās just breaking a contract, not fraud.
The potentially fradulent aspect is the broker who chooses to lend out the share without consulting the owner, but that again might be explicitly allowed by the terms they agreed to when using the broker.
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dress it up.
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Company A has an abusive behaviour towards the stakeholders. This abusive behaviour consists in cooking the books, ie commiting fraud. The directors of the company are well regarded by the professional investment community. The CEO is a charismatic guy who led the company to above par rates of growth. The media loves him.
Investor 1 is on is daily tasks of searching for investment opportunities. One fine day Investor 1 stumbles upon the financial statements of Company A. He does is thing as usual. At some point he realises something is off. The numbers donāt add up. He digs deeper. Investor 1 just found a massive case of fraudulent activity.
Investor 1 decides to make his findings public. This is the good behaviour. Making the fraud public knowledge is the good behaviour. He didnāt choose to walk away or shrug is shoulders. He took action in order to put an end to the abusive behaviour. By making it public he protected people from predatory behaviour. He did this by placing a short and in the end he took a profit on it.
Some pointed out Investor 1 only did it for the money. If he wouldnāt have anything to gain he wouldnāt have done it. So what? Whatās wrong in making a profit by doing good?! Companies that collect garbage are doing good and they take a profit by doing it. Whatās wrong with that?
Others remember he stood to loose a lot of money, going short on Company A. Their CEO was a very influential person. But the investment community cross checked Investor 1 findings and a sufficient number of investors agreed with those findings. More shorts joined the party. Eventually Company A collapses. Many people lose what they invested in Company A. Others lose their jobs. Many point the finger to Investor 1 and other short sellers, blaming them for the downfall of Company A. Blaming the boy who shouts the king has no clothes. Blaming the boy who shouts wolf. Blaming the messenger for the bad news. And forgetting it was management who committed the fraud to start with.
The case goes to court. The factual evidence is overwhelming.
As for the whistleblowing policies. Iām glad they exist. I am by no means an expert, but I doubt the regulatory requirements for it can be considered lighter than just placing a short position.
I think without short selling more predators will be out there taking advantage of people.
And once again, thereās good and bad behaviours everywhere. Done by everyone
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Iā¦I just canāt. You win.
Itās not a question of winning or losing. Itās a question of understanding and perspective
You still havenāt provided an example of this good behaviour. Just consequential outcomes. My concession in the argument that you donāt know what you meant when you wrote that post (that was my argument btw) hands victory to you. Wanted, warranted or not.
When short sellers place a short on Enron they are having a good behaviour.
Because they are making the fraudulent behaviour public knowledge.
When short sellers short the housing market they are exposing a case of massive malpractice by the industry.
Their good behaviour consists in denouncing the abusive malpractice.
2+2=4
They made money with it. Good on them I say. Making money is not wrong per se.
Maybe thatās a case where short sellers misbehave. The train is in movement. And if found guilty they should be punished.
Do I think they are guilty? If the factual evidence shows they are guilty beyond reasonable doubt then I think they are guilty
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If I kill a killer am I exhibiting good behaviour? Or am I taking the law into my own hands? Not the job of short sellers to expose malpractice, nor do they set out to.
In principle no.
There are circumstances where it is. Extreme circumstances. War. Self defense. Killing the murderer of your childā¦
Yes.
And there are circumstances where I would stand by your side defending you for doing so and demanding, calmly and with civility observing the rules of urbanity, any judge who dared to convict you to be striped of their wig and thrown in to jail
We obviously have different perspectives on this
Iām happy to do this research for you. Letās discuss my stipend.
What price would you like to pay?
Ā£0.50 per word
or
Ā£350.00 per hour.
Prices are non negotiable. Itās either one or the other for me to perform the task for you. Or you can choose to do it yourself on your own time. 3 options to choose from
Copied from the other thread:
Hereās are summary article on hedge funds, on P25 it looks at short selling and price discovery and it cites a couple of papers that investigated the effects of historic bans on short selling:
79d42b50b8b0efcfac28883a85e1bd4a8c43.pdf
3.71 MB
Beber and Pagano (2011) examine the consequences of short-sale bans around the world during the 2007-2009 crisis. They find that bans had negative effects on liquidity, especially for small cap stocks and stocks without listed options. Moreover, they find that the bans slowed down price discovery, especially in bear markets and failed to support prices in the vast majority of markets
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1502184
Also a summary of another paper:
The authors find that, through the period of the ban, markets for financial stocks were substantially less efficient and that the role of the trading process aiding in price discovery was greatly reduced.
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