Is Short Selling To Be Banned?

CLAPTON

StevieJ wrote: »

What if they are not true and you sell your shares into a falling market (or stop losses kick in) only to bounce back the next day with you out of pocket and some hedge fund quids in?

of course,
the issue is whether it's better to have access to all infomation (even if some is false) rather that rely on the authorises knowing what's best for you.



personally, I would like access to all info and make my own decisions; you clearly have a different view.

StevieJ

michaels wrote: »

So it is fine for govt's to claim everything is hunky dory and growth will be 1.7% this year when it will obviously be much less but wrong for others to give their opinions (that may or may not be more accurate)?

Traders can chose whether to trade on 'rumours' or not just as they could trade according to charts or sunspots or whatever. Can the price of a multi-billion dollar company really be manipulated by false rumours - if this is the case why do people invest in shares at all as surely they are just arbitrary.

Govts can say what they like but other forecasters have access to their forecasting models and can provide an alternative view. In such a trigger happy atmosphere, of course big companies can be manipulated by false rumours, especially in the financial sphere.

HAMISH_MCTAVISH

Call me old fashioned, but shares should be a buy and hold investment, dependent on dividends to yield a profit.

"Investing" in a company that has already floated (usually) does no good for that company, it already accessed the funds from the float. So it's just speculation, paying off a previous speculator. And the short term managerial mentality of always pandering to the share price with the next set of quarterly results is a destructive force in business, IMO.

Equities "investment" has become equities speculation.

Short selling is the most visible facet of a system that has become rotten to the core.

It should be banned.

CLAPTON

StevieJ wrote: »

Govts can say what they like but other forecasters have access to their forecasting models and can provide an alternative view. In such a trigger happy atmosphere, of course big companies can be manipulated by false rumours, especially in the financial sphere.

the answer is clearly then that false rumours (say like US will have it's credit rating down graded) should be banned and short selling make illegal in that situation

but if the rumour is true then it will be OK and short selling should be allowed.

obviously we will need an independent, well respected body that has a history of correctly forecasting booms and bustes to decide in each case

I believe Gordon is free at the moment; or maybe those eurocrats that decided that Greece met criteria to join the euro

StevieJ

CLAPTON wrote: »

the answer is clearly then that false rumours (say like US will have it's credit rating down graded) should be banned and short selling make illegal in that situation

but if the rumour is true then it will be OK and short selling should be allowed.

obviously we will need an independent, well respected body that has a history of correctly forecasting booms and bustes to decide in each case

I believe Gordon is free at the moment; or maybe those eurocrats that decided that Greece met criteria to join the euro

I quite like this quote posted by Ark on the other thread

"We're just awash with rumours, dragging us from pillar to post ... We're calling propagators of such stuff the 'Pinstriped Looters'. They come in, smash the market with their talk, and then run off with the money," said one London-based trader, drawing a parallel with the riots and looting that has hit many of Britain's cities over the past week.

CLAPTON

StevieJ wrote: »

I quite like this quote posted by Ark on the other thread

maybe but you haven't actually answered my point.

StevieJ

CLAPTON wrote: »

maybe but you haven't actually answered my point.

Yes a point rather than a question, had no idea you needed an answer, is it one of those days? BTW S&P had already previously warned of a US downgrade.
Not sure what you are going on about, if short selling is banned, it is banned, what is all this about?

obviously we will need an independent, well respected body that has a history of correctly forecasting booms and bustes to decide in each case

tomterm8

HAMISH_MCTAVISH wrote: »

Call me old fashioned, but shares should be a buy and hold investment, dependent on dividends to yield a profit.

"Investing" in a company that has already floated (usually) does no good for that company, it already accessed the funds from the float. So it's just speculation, paying off a previous speculator. And the short term managerial mentality of always pandering to the share price with the next set of quarterly results is a destructive force in business, IMO.

Equities "investment" has become equities speculation.

Short selling is the most visible facet of a system that has become rotten to the core.

It should be banned.

I'm not sure that is a traditional view.

From the companies perspective, the fact shares can be sold on the secondary market means there are more buyers from the initial rights issue. Otherwise, the only way for the owners of a company to get money out of the company would be liquidation.

As for short selling... I think naked short selling is probably a bad thing. If the short sale is covered, I think it is acceptable.

I think derivatives in general are much more of a threat to the economy. Particularly derivatives that pay out on default or risk events which could be influenced.

CLAPTON

StevieJ wrote: »

Yes a point rather than a question, had no idea you needed an answer, is it one of those days? BTW S&P had already previously warned of a US downgrade.
Not sure what you are going on about, if short selling is banned, it is banned, what is all this about?

I read your posts as having two elements

- about rumours; which I interpreted as you being in favour of some sort of sanction for spreading 'false' rumours

-and making short selling illegal


but maybe you didn't mean that

Ark_Welder

There is a difference between opinion and rumour. I might express an opinion about short-selling, but by stating that it is my opinion then there is no ambiguity regards its source. The problem with rumour is that it is uninformative - whether it turns out to be true or not - because reliable decisions cannot be made due to the uncertain nature of the information. By the time it is known whether it is true or false then it might be too late to act with certainty.

But rumour is going to persist because there will always be someone that wants to manipulate a situation, and there will always be those that want to feel that they have an 'edge' when it comes to information. But unless there is reliable verifiable way to back up what is being said it should be taken with a pinch of salt.

A rumour will always spread when it is about something that people want to believe.

This, you may have worked out, is merely my opinion...!