But then you'd be unable to buy low, sell high. You'd have to buy high, and hope to sell higher.
It'd do away with the leeches and only leave the legitimate investors. Losing out the ability to make a "quick buck" with no labor investment isn't the best argument against something.
Legitimate investors don't buy low and sell high? Jesus.
Legitimate investors buy stocks to hold longterm. Speculators rely on "buy low sell high"
fuck the speculators.
"buy low sell high" is NOT INVESTING, it's a parasitic activity that generates no GDP or value.
That is stupid becuase speculators bring stocks closer to fair market value under normal conditions. If a stock is overvalued, speculators short sell and bringit back down to earth. Speculators are of courese prone to the same irrational behaivor that plagues long-term investors as well as any other profession.
By bringing stock values more in line with where they should be according to value investinh principles, as well as others, speculators improve the market as a source of information, relayed through the price mechanism. Improved information helps long term investors pick better stocks, and thus earn more in the long term and improve the efficent allocation of capital, the goal of any financial system.
Should we ban gambling as well?
Gambling doesn't destroy wealth, so there's no comparison to be made here.
Short selling = "You make money if you can cause damage to a business" (you can also predict something else causing damage to a business, but the incentive to fuck up the business is still there)
Gambling = "You make money randomly"
Well yeah, there really is no comparison there, since as you mentioned gambling is random and short selling is a comphrensive strategy.
Short selling is still essential however, as it prevents many bubbles from forming and bursts many as well. The incentive to scrutinize business and look for flaws among even the best of them is what makes sure that the market capitalization and the stock price of the company are all in line with the abstract ideal market values.
Short sellers have never caused anything bad to happen, they simply recognize bad decisions.
Fir example, short sellers made out like bandits in the mortgage crisis. They made money off of the poor performence of many banks. However, they did not cause that flaw, the banks had already misallocated capital and the short sellers were either lucky or just more knowledgeable and predicted their losses before anyone else.
Author
Topic: Occupying Wallstreet (Read 296151 times)