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Friday, November 13, 2009

On Shorting stocks

Naked short selling is robbing buy & hold investors. We “deposit” money in stocks of companies for “long term” investments. Short sellers take money out by crashing the stocks. Short sellers are blamed for “clobbering”, “carpet bombing” to take all money out of stock prices. In wallstreet failed trades result in “lost money” for ever for long term buy and holders. Companies as big as Intel suffered huge stock price drops due to short selling. This phenomenon peaked in 2000 crash & 2007 crash.

This news says, trend is your friend, follow the trends & get out when there is reversal happening. Trends let you make money only for “very” short duration till others figure out what’s going on & trend breaks.

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