PNV 2.98% $2.42 polynovo limited

The argument that shorting forces selling by 'mum and dad'...

  1. 1,580 Posts.
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    The argument that shorting forces selling by 'mum and dad' investors is, in the vast majority of cases, not true. They sell because they panic. They are not forced to sell. So it is their, and the term 'mum and dad' refers to many other people in the sharemarket too, short mindedness and lack of understanding of investing.

    If they are 'forced' to sell, I can only think they are 1. borrowed on a margin 2. they have borrowed to the limit of the margin account and 3. they don't have funds elsewhere to cover a fall in price to cover the margin call.

    Can someone give me another reason an investor is 'forced' to sell when shorters push the SP down 10, 20 or even 30%+? The shorters on certain stocks have given me two opportunities to invest in this company in what I considered 'undervalued' prices. But the market decided those prices.

    The CEOs provide one side of the argument that is skewed in the positive to the extreme. If brokers/analysts give an opposite negative viewpoint, it would seem advantageous to me as an investor to know about it (as long as the news is accurate - on BOTH sides).

    Eventually company fundamentals will decide the outcome. PNV is the perfect example of this. All of us here watch and comment on the SP moving 2-5% daily, with a range of emotions changing with each move, and with 'many' not considering selling short-term. I understand if you are trading, intraday or within a couple of months even, shorting should be frustrating. For investors - external to the main game.

    Last edited by BuffettWarren: 17/03/24
 
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