to redfaces - a reply I have just read your newsletter. As you...

to redfaces - a reply I have just read your newsletter.

As you had previously stated that you had written a similar article a few months ago, I take it that you are the author.

I am now aware of your interest in TTS as a "shorter".

Your newsletter states " ..... short selling as an investment strategy".

I have read over 100 investment books over the past 25 odd years and I have never come across the notion of short selling as an investment strategy. To me, it is merely gambling.

Take a look at the ASX index over the past 50 years. It has only gone up, with periodic "rests". Who has better odds - shorts or longs?

Certainly some opportunistic shorts arise every so often - shorting TLS from $5 to $4 was a "no brainer" trade, as financial analysis of the financials would have indicated it.


An example of how short selling can go wrong:

Say you have shorted 1 million shares in TTS and you are currently 3% in the money.

Say, tomorrow morning, a trading halt is placed on TTS at 10 am.

Say a takeover bid is lodged.

When the trading re-opens at 2 pm, the opening price is 30% higher.

Your loss is 27%, provided you can close the position before the hedge funds take the price even higher.


At least I now know what angle you are coming from.

You probably have a few fellow members on this thread trying to "talk the price down".

I will keep an eye on your posts on HC to see whether I decide to trade against you in future with any other shares.