Posted:
#1
isnt this kinda a dick move?
please, say otherwise
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Posts: 15
Posted:
#6
Quote Originally Posted by bucknuts:
Somebody has to make money on the downside..might as well be you
Somebody has to make money on the downside..might as well be you
Agreed. Not the same as betting the "Don't Pass Line." Plus, you're betting against specific companies, not necessarily the market, unless you're shorting ETFs. Go for it, if you feel a downturn is coming.
Posted:
#10
Quote Originally Posted by platypus:
isnt this kinda a dick move?
isnt this kinda a dick move?
please, say otherwise
Not a dick move....just an incredibly stupid one.
The debate on shorting always seems to rest on the premise "its very profitable but its unethical". It isn't unethical.
Stop and think about it for a second. Stocks go up about 8% on average. If you buy a stock that is 10% above average, you'll get an 18% return. If you short a stock that is 10% below average, you'll get a 2% return.
Also realize the downside. If I buy a stock for $10, it could go up to $100...$1000. Whatever. But it can never go lower than $0. You have a unlimited upside and a limited downside. Shorting is just the opposite. You can never make more than $10 shorting that stock but your potential losses are unlimited.
Finally, think about when you're right but your timing is off. About 10 years ago, JDSU was selling for $100 a share and you knew that it was only worth $2 a share. You short it. You were right. Eventually it goes to $2...but only after it went to $400. The very temporary rise would have cost you nearly everything in margin calls. The fact you were eventually right is pretty much irrelevant. You can afford to be patient when you are long. As long as the company doesn't go bankrupt, you can just sit and wait. The market regains its sanity eventually.
Shorting is like driving down the highway in reverse. You won't go nearly as fast and you are about 100 times more likely to crash.
I don't have any moral qualms with shorting but that doesn't mean its not stupid.
Posted:
#11
we've gone off topic. The whole purpose of this was to find out if there was a reasonably argument that might surface for how shorting either has no moral consequences or possibly even if it is in fact moral. nobody could give a reasonable argument for how shorting is either moral or amoral. My personal beliefs are that it's a total dick move.
-because you're hoping for failure and betting accordingly. moreover you profit when people suffer.
Posted:
#14
Quote Originally Posted by tallguyindc:
Not a dick move....just an incredibly stupid one.
The debate on shorting always seems to rest on the premise "its very profitable but its unethical". It isn't unethical.
Stop and think about it for a second. Stocks go up about 8% on average. If you buy a stock that is 10% above average, you'll get an 18% return. If you short a stock that is 10% below average, you'll get a 2% return.
Also realize the downside. If I buy a stock for $10, it could go up to $100...$1000. Whatever. But it can never go lower than $0. You have a unlimited upside and a limited downside. Shorting is just the opposite. You can never make more than $10 shorting that stock but your potential losses are unlimited.
Finally, think about when you're right but your timing is off. About 10 years ago, JDSU was selling for $100 a share and you knew that it was only worth $2 a share. You short it. You were right. Eventually it goes to $2...but only after it went to $400. The very temporary rise would have cost you nearly everything in margin calls. The fact you were eventually right is pretty much irrelevant. You can afford to be patient when you are long. As long as the company doesn't go bankrupt, you can just sit and wait. The market regains its sanity eventually.
Shorting is like driving down the highway in reverse. You won't go nearly as fast and you are about 100 times more likely to crash.
I don't have any moral qualms with shorting but that doesn't mean its not stupid.
you are correct if you short XYZ in theory you have an unlimited downside you could be destroyed if forced to cover at much higher prices with a margin call if you are on margin. not a sound strategy if on margin and if with a big chunk of your bankroll. not sound if not on margin either. selling covered calls or uncovered calls also offers risk. you could also sell uncovered puts like the Fed is doing on treasury bonds and if they fall sharply you are in deep crap.
I stick with the rule that history has shown that 75% of stocks follow the overall trend of the market. when the market is in a confirmed rally even turds will rise. when the market is in a correction even the stocks you think are the greatest thing ever may fall. contrary to popular opinion the stock market does actually go down here and there. the mutual fund marketing posse wants you to believe your entire life will look like 1982-1999. that is not that the case.
right now kinda a tweener and check out GOOG and AAPL. both kinda struggling and GOOG is now below the 200 DMA. they both went up with QE2 but have lagged recently. along with FCX, GS, XLF, SMH, BAC, JPM, ...
I have no position in AAPL but the chart tells me the reaction to earnings at the end of the week will not be positive (by that I mean two full days of trading). Maybe it is and maybe it isn't but the chart tells me it is a "no play" and likely to lead to distribution.
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