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Shot Selling: Falling Stars of the Stock Market

21 June 2007 - Features - Editor

The stock market is not above the power of words! ‘Selling short’ probably sounds less than decent to most ears, so we seem to assume that this activity is somehow undesirable and suggestive of losses. Nothing could be further from the truth! Self-appointed stock market wizards who say that selling short is unduly risky, either do not know what they talk about, or preach differently from their affluent practices!

Selling short is a valid, systematic, and admirable way of making legal money from a stock market environment. It is true that most exchanges have rules which set limits on such activity, but then what use are rules if you are criticized for even playing within them?

Now it is one thing if someone is accustomed to stock market decisions based on rumors and planted stories: however, those who have the skills and patience to study management statements carefully, or who make up their own minds after reading authoritative analyses, and who read the fine print in new legislation and government policy announcements, must feel aggrieved at the undeserved muck which surrounds short selling.

Not all short selling decisions by stock market professionals are due to external developments. Functional managerial decisions and executive actions within an organization may speak volumes for the wise observer about which way a security will move in the future. Declining margins and huge increases in assets with questionable productivity values are typical examples of developments in financial statements which deserve to be viewed askance.

Technological and political considerations can also influence stock market transactions related to selling short. Thus, it may entirely in order and safe to sell short in a field about which an investor has in-depth knowledge. The global market place of today does not tolerate country boundaries, and many members listed on a stock market in one country, are actually shaken and stirred by cataclysmic events in a territory far away.

Selling short sets stock market champions apart from the mediocre players. It is true that some projections go awry, but that is true of conventional purchases and sales of all securities.

So get your calculator out, put on your thinking cap, read everything you can access, and make some great profits by selling short: is always at your service for some leads!


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