Short-sellers perform a useful function in the market as conduits of negative information, and shorts often complain that they are discriminated against by regulators.
Sentiment: NEGATIVE
By incentivizing Wall Street players to sniff out inefficient or corrupt companies and bet against them, short-selling acts as a sort of policing system; legal short-sellers have been instrumental in helping expose firms like Enron and WorldCom.
I'll always understand the Schadenfreude aspect to short-selling. I get that no one will always like it. I'm also convinced to the deepest part of my bones that short-selling plays the role of real-time financial watchdog. It's one of the few checks and balances in the market.
Short sellers sell stock they have borrowed, hoping to buy it back later when its price has fallen.
While short sellers probably will never be popular on Wall Street, they often are the ones wearing the white hats when it comes to looking for and identifying the bad guys!
I've learned there's a big difference between a long-focused value investor and a good short-seller. That difference is psychological and I think it falls into the realm of behavioral finance.
It's almost sickening now that the regulators 'on the beat' while the biggest credit collapse in modern financial history unfolded are now patting themselves on the back for their 'brave' stance on short-selling!
Legitimate small businesses are put at a huge competitive disadvantage when bad actors lie about their small business status and don't play by the rules.
A lot of shorts spend too much time setting up the idea; sometimes they meander.
Conspiracy theories feed on opacity, and that's a longtime problem with short selling. Large long positions must be reported to the Securities and Exchange Commission in public filings, but not large short positions.
Those who make the worst use of their time are the first to complain of its shortness.
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