Jeffery: Not at all. Long and short are NOT symetrical positions.
People buying stocks and bonds are using their savings to finance the growth of the economy. The is why we have a market in the first place.
Short sellers are NOT financing new business. Instead, they are mearly profiting from the misfortune (and mistakes) of other investors.
I can hear someone objecting "but only people buying original issues are financing new business!" This is not true. Without the market to make those new issue stocks and bonds liquid, they could not be sold.
As a solid example, take Iomega. In february, they needed to raise cash to expand operations. They had a line of credit, but needed much more than they could borrow from a bank. They went to the stock market with a secondary stock offering. They did not like the price they could get at that time. (Iomega was under attack by shorts, fronted for by Dan Dorkman.) So Iomega canceled the secondary and instead offered convertable bonds. I bought some. My money was INVESTED (note: NOT BET). My money was invested in growing Iomega.
When those bonds are converted to stock, and I eventually sell the stock, the person buying them will be investing in Iomega and helping them to grow. If it were not for the expectation of finding that future investor I would not have lent Iomega my money.
So where does the short seller come into any of this? He is indeed making a bet, and not an investment. He is NOT an investor. How does the short seller help Iomega, or the economy, or other investors? If you cannot answer this question, then you must accept the label "parasite".
You claim short sellers do reasearch. Big Deal. So do most investors.
If you want to make bets, why not play options instead of shorts?
(Yes, I know you can't option all stocks.)
"You are making a BET that the company will do well and you swoop in a take a piece of them for yourself" No. When I buy stock I am BUYING (not taking) a piece of the compnay. Therefore I am ENTITLED to my piece of the profits that I made posible with my investment.
"Also please don't be offended by my use of the word "ignorant"." An offence is like a poison. It must be ingested to do harm. I have never been offended by your posts.
As to why I dislike short sellers in general: Shorters of Iomega (not you) have lied and spread "disinformation" about Iomega in order to force down the stock price. Second, just the action of going short depresses the price of my stock. Third, they do me this harm by borrowing MY stock, without my specific permission. I think these are sufficient reasons. |
