shorting

Let me see if I have got this correct.
I have earned $10,000 super over the last couple of years working, which I have invested in a large super fund.

Along comes this bloke with about $200 in his pocket and he says to the super fund "Hey, I'll pay you 200 bucks for the loan of those shares worth $10,000 and I only want them for a few weeks".

The super fund manager thinks to himself "Hmmm, I can earn an extra $200 bucks here. That's an extra 2%!", so he loans this bloke the $10,000 in shares that I have worked for 2 years to build up. Without my knowledge I might add!

The next day this bloke who 'borrowed' the shares gets into the market and, along with his other 'shorting' mates, together start to frantically sell these shares driving the price down and down.

After a while, when the share is thoroughly trashed, they buy back the same quantity of shares now worth $4000. They call up their mate at the super fund and return the shares.

For an investment of $200, he made $6000!.

For my longterm superannuation, I have invested $10,000 in shares that are now worth $4000.

How is it that MY $6000 in wealth appears to have been transferred to some bloke who apparently had no money in the first place (sorry $200)? How is it that my wealth that was PAID UPFRONT has been transferred to this bloke that virtually put nothing upfront?

I'd like those financial gurus that have been saying that shorting has a place in the market to explain it to me in simple terms. I must be dumb... I must have completely missed the point.


Oh, by the way... the shorter above does not invest his money in super funds... I wonder why?