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Whilst excessive risk taking is probably the root cause of the recent financial collapses, I think it’s also worth noting the role hedge funds have played in st
by rrf 18y ago
Whilst excessive risk taking is probably the root cause of the recent financial collapses, I think it’s also worth noting the role hedge funds have played in stirring up investor panic by short selling highly geared or mortgage exposed companies around the world. Britain’s largest mortgage lender, HBOS, had 30% wiped off its value yesterday, attributed to short selling - http://www.marketoracle.co.uk/Article6277.html http://www.marketoracle.co.uk/Article6277.html
- eru 18y agoHow can short selling wipe out value? If it helps find the right price faster, isn't that a good thing?
- lallysingh 18y agoWhat's the right price?
- eru 18y agoSomewhat above the price Warren Buffet buys at. And, what's value? A change in market price of stocks does not imply a change in the underlying compant. (For a very technical meaning of 'imply'.)