On selling short: short poem for Paula

Doug Henwood dhenwood at panix.com
Sat May 22 09:54:34 PDT 1999


Jordan Hayes wrote:


> From hliu at mindspring.com Fri May 21 17:24:11 1999
>
> Short sellers are pure gamblers.
>
>This is no more true than saying "long buyers are pure gamblers" ...

Yes it is. By the old-fashioned definitions, someone who buys a stock for its dividend is investing, and someone who buys a stock for mere price appreciation is speculating. (Ok, I said this was old-fashioned.) Less mustily, owning a stock represents a claim on real profits and real assets. Shorting a stock gives you title to nothing except a hope that its price will sink.

Doug



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