E.H.F.
When the market opens Monday, Tuesday's events will be old news. Cooler heads will be trading and the emotions of today will be under control. The emotions aren't going to go away. The economy will continue to function. This is a huge tragic event, but this country will not grind to a halt. It will return to normal with a few more battle scars just as it has in the past.
Stop and think about traders for a second. Stocks don't lose value due to shorting. They lose value because the company is having problems for whatever reason. Buyers lose interest in buying the company stock because of the company's problems, and owners start selling the stock because of the problems.
Traders just join the sellers who own the stock without owning the stock. Unlike the owners who are selling, the shorts have to buy the stock at a future date. When they buy the stock, it slows the stock's price decline. Shorts also turn into longs when they think the price has bottomed.
Traders just have the guts to play the market long and short. The rest of us are convinced that holding stock long term is the best strategy. Unfortunately, economic history is on the trader's side.
If you have ever sold covered calls, or purchased puts in the option market, you have also been a short. Many people don't realize that.
So, let's hope the shorts are closing their positions out Monday. Let's hope the shorts are closing their positions because this is the bottom and things just can't get any worse.
For the rest of us, it is best to continue holding our long term positions.
NW |
