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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: Cheeky Kid who wrote (67776)	3/4/2001 8:56:12 PM
From: eims2000	Respond to of 122087

Yeah, and then we could ride around on horses and send email by ship and covered wagon.

To: Cheeky Kid who wrote (67776)	3/4/2001 9:01:59 PM
From: eims2000	Read Replies (1) \| Respond to of 122087

Shorting is a key part of market liquidity. Without liquidity you would have no market. Without a market you would not have the growth we have had for the last 150 years. The growth that brought about mass production which allows us to have cars and computers etc etc. You are confusing the bursting of this bubble with shorting. If no one was short we would be at 1200 now.

To: Cheeky Kid who wrote (67776)	3/4/2001 11:29:52 PM
From: truthcommission	Read Replies (1) \| Respond to of 122087

Shorting serves no purpose? You don't actually believe that do you?

To: Cheeky Kid who wrote (67776)	3/5/2001 12:29:49 AM
From: LPS5	Read Replies (1) \| Respond to of 122087

Shorting serves NO purpose. Short selling provides for a continuous market in a security by facilitating transactions such that there is no directional bias - such as would arise if only long transactions were permitted. Interestingly, short selling does this despite what many perceive to be an unfair bias, i.e., the zero plus or bid test rule, whereas long transactions can be executed on any tick. Hypothesizing that liquidity would be enhanced by permitting short sales on up and downticks is not a stretch by any means. The futures markets show incredible amounts of liquidity for this - and to be fair, a few other - reason(s). There has never been any definitive research or proof (other than typically poorly-informed, inane message board banter) that short selling - whether with affirmative determination or naked - causes or accelerates declines in stock prices. In fact, a recent study covering floorless ("toxic") convertible financing offers fairly definitive proof that short selling provides for an orderly market and slows, rather than accelerates, declines. More sophisticated traders who are familiar with short selling are aware of the bounce often provided for by short covering, and the data bears this out. The study (June 2000) conducted by financial engineers at UCLA and UC Irvine, covered 490 issuers that undertook toxic convertible financing between 1995 and 1998. It showed a marked difference between issues which had, and those which did not have, prohibitions on short selling by the financing writers. While the average issuer's stock price fell by 72% in the covered period, the differences are noteworthy: Those where short selling was prohibited showed declines of -59.4%, -49.4%, and -53.1% in the yearly periods; Those where short selling was permitted showed declines of -9.88%, -31.2%, and -13.4% in the yearly periods. In fact, an excerpt of the paper states: "The most surprising result of this paper are the results of panel 8D and figure 8D, which shows the impact of short-selling constraints. In contrast to our priors, companies that impose short-selling constraints experience significantly worse performance than companies that don’t.” [pg. 30] Why? Because where there are no short sellers, precipitous declines result in a de facto "buyer's strike" as issue prices reach increasingly depressed levels. LPS5