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Or we could simply ban short. This has been discussed regularly since they were allowed in the 30s. Shorts have pretty much no legitimate use after all. They a
by brmgb 6y ago
Or we could simply ban short. This has been discussed regularly since they were allowed in the 30s.
Shorts have pretty much no legitimate use after all. They are only useful to speculate and speculation itself is mostly a useless by-product of the way markets operate.
People like to argue that speculation helps with price discovery and brings liquidity. I would answer that the marginal improvement it brings would be pointless if markets were solely focused on their original goal: allowing people to trade voting shares into companies they want to invest in. The premium speculators are allowed to extract on the economy for what they do speaks volumes about how rotten the whole system is. Let's never forget that by its own rules the whole thing should have crashed and burned during the 2008 crisis.
- mrlala 6y agoBut all stock trading is mostly bullshit speculation. So I would say "long" have pretty much no legitimate use either. Everything done now is so far away from "investing" that it's literally insane.
- jajawtd 6y agoIt should all be banned because its a pyramid scheme and a scam. A concept that would only work in a video game. They had 100 years and the economy is still a scam. You literally can not just wake up and invest in some industry you like. 95% is snake oil and the other 5% volatile due to manipulation. Somebody should find the amount of tickers issued, meaning every company that ever appeared on the stock market, then how many of these companies made it to dividend (the entire point of investing).
- gridder 6y agoI totally agree with your vision. My proposal was a compromise. Yours is plan A.
- solarkraft 6y agoThere are definitely good things about shorting, like giving an incentive to expose frauds through careful research (see Nikola). On the other hand it also incentivizes making companies fail, thus destroying value. I'd be interested in an analysis of which side outweighs the other.
- econnors 6y agoThere are other mechanisms for profiting off stocks losing value (eg put options) that don’t impact pricing like shorts do.