Ken --
"Blood money is blood money. Where I won, someone else lost and that saddens me."
Although I've been in the market over seven years, my very first short was earlier this month. Generally, I didn't short until recently because I had the same general view about short trades as you. Thus, I had to overcome a lot of negative views about shorting before I could short a stock myself.
However, even in a long position, someone loses and someone wins -- if someone sells to you and the price goes up, your gain comes at the seller's "loss." In contrast, when you cover a short position, you are buying from someone who likely is cutting his or her loses -- thus, it arguably is a win-win transaction. In fact, I've since begun to realize that shorts help put a brake on a runaway falling market -- at some point, the shorts will need to cover and buy those declining stocks, thus putting upward pressure on the price and helping to reverse the decline.
Anyway, the biggest problem I had with shorts are the negative, usually deceitful posts by short traders who try to drive the price down. That is where I draw the line -- I generally have avoided posting anything on my short positions or any negative views about a stock on the message boards for those stocks. I'll short a stock, but I won't help drive it down.
Regardless, I'm now having fun again in the market, which hadn't been true since last April.
Anyway, those are my thoughts (for what they're worth).
-- Jim |
