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Politics : Formerly About Applied Materials
AMAT 301.11+6.9%Jan 9 9:30 AM EST
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To: BWAC who wrote (51577)9/6/2001 1:33:28 PM
From: Sun Tzu  Read Replies (1) of 70976
 
OT -- shorting

Allow me to point out a different perspective. To begin with, you do not have to allow your shares to be shorted. You can choose to instruct your broker to place the shares in a cash account and call them back so that whoever has shorted you shares will have to deliver them no matter what the market price.

Secondly, you do not benefit the company or the economy when you buy their share. Although the activity is often dubbed as "investing in the company", the only true investors are those who buy the shares directly from the company. Everyone else is simply making a bet that the shares will be worth more (or less) in the future than they do now. The company does not recieve an income nor does the economy directly profit from the rise of the stock prices (yes I know all about the wealth effect and the employee stock option plans, but that is a different discussion. Here I am refering to the direct effect of the stock purchase).

What is beneficial to the companies, the economy, and the country, is a great stock market and not the stocks themself. In other words, it is the avaliblity, liquidity, and the integrity of the capital markets that matter the most. To that end, the short sellers contribute as much as anyone else to the health and operation of the stock market.

JMO,
Sun Tzu
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