I've expressed in this blog several times in the past a sense of unease about the concept of "shorting" a security; that is, essentially betting that a stock will decline in value and making a profit from that bet. In this useful article, the concept of shorting a stock is discussed, as are the benefits and drawbacks to the process. It is well worth the read in order to come away with a better sense of exactly what is at stake as regulators consider modifications to trading rules with respect to shorting.
Here's my take...I think shorting in the age of the internet is a generally bad thing. Information can be shared in an instant, including false and misleading information. Shorting creates a feeding frenzy that then acquires a momentum all its own. The re-imposition of the "uptick" rule (that says a subsequent short transaction may not be made until the stock price has risen risen) will not solve this problem, but it sure can help in slowing down the momentum of the frenzy once it begins.
One of the primary reasons put forward by supporters of shorting is that it allows investors to "express their skepticism" about a stock. I guess I thought that's what selling it was all about....
Please, if there are financial whizzes reading in...weigh in with your thoughts on shorting.
Tuesday, March 17, 2009
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8 comments:
When I bake, I prefer to use butter instead of shortening.
Actually, applesauce is a good substitute for butter or shortening in many baked goods. It really cuts down on the fat and calories and your can't even tell the taste difference.
You might also want to replace the eggs in many baked goods for egg whites instead. Substitute 2 egg whites for every whole egg the recipe calls for.
Hey Crocker! Butt out of this, you are going to cause a loss of butter production jobs in Minnesota.
I can't help but wonder if these prior comments (I detect GG's hand here by the way) leave you feeling as if your thoughtful article has been "margerinealized".
I agree with LOL Girl. Butter is what makes my buns and such taste so good.
You know, now that there seems to be a combination of insightful commentary AND humor over here at the Conservative Wahoo site, I won't have to visit Postcards from the Backbench any more.
Do you enjoy these chats with your other personalities, Sybil?
The Conservative Wahoo can confirm that Betty C, Obama Fingers, and whatever name I use on this post are all from one identity.
The other posts are from other people, all fans of the Conservative Wahoo, a altitudinally-challenged man with the courage to title a post "Short on Shorting".
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