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Strategies & Market Trends : Stock Attack II - A Complete Analysis

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To: donald sew who wrote (7136)5/5/2001 8:03:28 PM
From: Catman  Read Replies (1) of 52237
 
donald sew...
My thoughts about short selling...I've always gotten a kick out of the war of words between longs and shorts on the message boards. You're correct regarding the very low percentage of average investors who short...or who even know what its about. The bulk of shorting is done by the institutions and hedge funds...just as they do the bulk of the long buying...its funny how people think that either their cheerleading or bashing would make one bit of difference to the price of a stock. (mostly what I see on Y boards) What I don't understand is the misconception or rather the way shorting is looked upon...shorting is merely a difference of opinion....thats all...you say its going up, I say its going down....if I'm of the opinion its going down, I either sell short or I'm on the sidelines....and as I make my living trading, I can't afford to only wait for an uptrend.
I think the problem is that by nature, most people are optimistic....but if the goal is to make money, you have to be able to play both sides....one side is not any more right than the other. And there is also the opinion that shorting is more dangerous ...because there is unlimited upside whereas on the long side a stock can only go to zero...theoretically, yes....but as in any other form of trading, strict rules must be adhered to by the trader...I have seen stocks sell off by anywhere from 10 to 40 pts. before the general public has even had its first cup of coffee......how safe is that?..while short squeezes occur, they are rare. It is no less American than buying a stock and selling it to someone else at a higher price...its just a difference of opinion thats acted upon rather than just being discussed....just as this is only my opinion....
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