Name and Shame, page-110

My 2c (FWIW - I am not an expert)

If you believe that shorters are damaging your investment then worth asking yourself:

1. are you really in it for the long term or are you actually looking for a short term windfall?

2. are you really sure of the long term viability of the company? Are you thinking maybe it doesn't have the legs to reach what you thought it would?

If you really are in it for a long term pay off and are confident of your analysis then shorting will provide you with great opportunities to get in bargain buys and increase your long term position.

If you really are after short term gain then know you are playing in the shark pool, if you want to beat the other sharks, make sure you know what you are doing and don't expect sympathy if you get bitten. Short term you are a gambler. Good luck to you but don't complain if your bet doesn't pay off - you should know what you are getting into.

If you are a long term investor and find shorters are knocking your confidence then maybe that isn't a bad thing either. Question your assumptions. Don't invest on faith or on hunches or desire unless you are willing to lose that money. Question your investments, if you start to believe things might be over hyped then be thankful you found out early rather than criticise those that exposed the weakness. Don't invest large amounts unless you are confident (or willing to be proved wrong).



For long term investors, shorting is *not* like borrowing something and handing it back damaged. For you the value of the returned stock hasn't really changed value at all, in your LT frame it will still rise to the same price (assuming you have correctly analysed its long term value). Short term, stock prices are mostly emotion and peer group pressure. Which is why technical analysis works. Long term, companies will rise to their real value. Which is why financial analysis works.

If a stocks value to you is damaged after shorting activity it is because either the stock didn't really have the actual value you were thinking it did or you were really after a quick win at the races and got beaten.

For long term investing, shorting keeps things honest. By putting brakes on price and burning some investors, they stop over-hyped and foundationless prices burning investors. Better to weed out the weak early than let them grow and do more damage later.

Use shorting activity and general volatility to your advantage. Question your assumptions about value and buy undervalued stock if you see it.