Michael; when a stock rises, I may buy at 40 and sell to you at 50. You sell it to the next guy at 60. Money flow comes in, everyone makes money till someone decides it's too expensive.
In shorting, money is flowing out of a stock. I think the perception (speaking for myself at least) that when you profit from that larger group that's losing money on their long positions, essentially, you're making money off other folk's misery.
So yeah, somehow that seems dirty.
In reality, driving a stock up to unnatural valuations (the greed factor) tricks those at the peaks, so really, the ethics don't differ much.
Sure, we can set aside the ethics of each and objectively state logically and objectively that a good trader sets practical valuations and simply identifies the likelihood of a price movement, then trades to best advantage.
An ethical purist would then point out that many NASDAQ stocks still haven't surrendered their overvalued bubble valuations yet, so any notion of a 'correct' valuation is skewed to the greed side, so ethics matter after all. <GG>
Personally, I just trade to make a living. I have a ways to go to reach a comfortable level so it's not hard to defend the ethics of the time & work I put into my trade vs. stiffing anyone... though I draw the line at P&D.
So I simply go long as rises begin and short at guessed-at peaks, and leave the ethical decisions to the Gods.
And ultimately, what changed my mind about the ethics? Desire for gain in a corrective mkt, so in a sense, greed overrules ethics.
Put another way, however, common sense wins over butting your head into an unyielding wall, too. <GG>
But my point is, I think others hesitate to short because of the sense that profiting while hearing others moan about losses in the same stock can be disheartening. |
