Exactly Michael. Provided an an investor (or trader for that matter) is convinced a business is sound in the long run then shorting creates fantastic opportunities.
In some instances the more sophisticated institutional shorters ply that trade. Intention is to go long but see opportunity to drive down the price (oil play in MRM example) and then load up at the opportune time. In others, it is a genuine short believing a company is destined for long term structural problems. That is the challenge for investors, deciding which side of the equation to pick. Regarding MRM, my money is on the intention to go long.
The less sophisticated shorters, been a couple of examples posting on MRM HC forum, think the stock market is a pokie room in the RSL they have no plan just respond hour by hour and create stories that may seem credible to justify their utterances. You know the type 'this machine has just paid out don't put your money in there' 'move to this machine it hasn't paid out for ages', laughable.
I agree, there is a sense of satisfaction in knowing that you are not drawn into the games and watch the action from sidelines, perhaps picking up a few more as price becomes ridiculous. Nothing would grate shorters more than 'damn they are not falling for our games'.
MRM Price at posting:
81.0¢ Sentiment: Buy Disclosure: Held
