I also hold many thinly traded stocks. These are often great investments, but patience is required. At present, many of mine are also a very deep crimson shade of red.
I'm not saying that the absence of shorts will keep prices up. What I'm saying is that permitting shorts will NOT lead to increased liquidity. These thinly traded stocks will NOT attract shorters, because there is no guarantee they can cover their positions at a reasonable price.
So where do shorters hunt for stocks? Amongst the most liquid issues on the market! So shorts are only active, in the part of the market where liquidity is not a problem!
It's a nonsense argument that shorting will assist liquidity.
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