http://news.yahoo.com/s/ap/20100203/ap_on_bi_ge/us_stocks__bad_is_good
“It’s called a short squeeze, and though many Americans don’t know such a thing exists, much less understand it, it’s driving up many stocks.”
Really? Do people just not know or understand the stock market? I LOVE this stuff!! It’s also important for people to understand how the market works. So many people have a 401k account, or a pension, or a stock plan. Does everyone need to be a fund manager? No. But knowing all of the basics should be mandatory learning in school nowadays. IMO…
Short sellers have always been vilified. The hedge fund I worked at did a LOT of shorting and made a LOT of money from it. Ferreting out bad companies who would lie to their investors, pump up their stock price, had NO earnings. Short sellers didn’t create these situations – they found them out.
Can there be bad people short selling and driving good companies down? Of course. Like in everything, there will be bad people taking advantage of situations. i.e people shorting airline stocks around 9/11.
It’s much riskier than going long. And they have put in more rules over the years to try and keep it “fair”. But if you see an opportunity where a company is over-valued and the market is not correcting it, there is nothing wrong with betting against it.
It’s a market counter-balance. It truly is when the value of information is a motto (as Gordon Gekko knew.)
