Some one has to start it, Americas default.

It is how it is used that is immoral and potentially fraudulent... as it excludes all others 'out of that loop' from fair and equal participation in a supposedly 'open market'... - Just as sex is not necessarily illegal, - - it is how, where, when and with whom, that may make the act illegal...

There are many documented cases/instances where 'naked shorts', 'high frequency trading', 'insider-trading' and blatant price manipulation take place with some instances being clearly illegal, but such activity is rarely if ever, successfully & fully prosecuted...

At worst a plea of "adjustment" where guilt is not apportioned nor blame attributed but a fine accepted usually being less than 0.1% of the NET gain from the manipulative event...

 

You mean like when our Secretary of State did it with cattle futures?

http://www.washingtonpost.com/wp-srv/politics/special/whitewater/stories/wwtr940527.htm

 

I don't know. I don't really see it that way. If you're talking about my markets NYSE, etc... you're talking about markets where you need to "keep up with the Jones's" in technology or perish.

If you're trying to day trade or do other short term gains affected by naked shorts and insider trading and you're sitting in your rocking chair waiting for the newspaper to be delivered that afternoon, you're going to get cooked. (Again, not you personally)

The only other way to win is to have a very deep understanding of macro-economic trends and their relation to general valuation trends and go long... or to understand the emotion and mentality of the people doing the big volume trades at the big financial firms and piggy back them.

The latter is what I've been able to do successfully.

Having been among those people for many years, I understand these emotions and that's why if you look back in this thread, you can see I called the next day's market behavior pretty consistently through the ups and downs. I understand day trading because I understand the mentality of the people who play these games and force markets around with their high volume transactions.

I don't think a few people doing naked shorts on a particular stock is really a big problem. It's only a problem if you are heavy into that particular stock. If you are (more intelligently) playing larger averages across larger numbers of stocks, you are protected from the narrow focus of insider trading, naked shorts, etc...

The people who are doing those narrow focus deals are taking money from chumps (that's the NY way to put it). You know what? I pretty much agree with them. I've known plenty of people who have done inside trades on smaller scales and did quite well. Their little rig of the system really doesn't affect my overall trading strategy. Gambling on single stocks is definitely a sucker's game (or rather it's for chumps), IMO.

 

I disagree- it was fairly easy to see how individual stocks were carried far below their value during the recent mess and profit as the market rebound.
The right picks (I was messing with auto parts suppliers and regional banks) yielded far higher returns than the market.

 

Market participation is kinda key to investment capitol, so by having as many participation tools as possible the markets designers hope to encourage as much participation as possible. If some forms prove themselves more profitable than others during certain market fluctuations then by making them illegal what your really doing is limiting market investment. At which point your alienating whole segments of potential investors from the market.

Stan
smart move
I'm hoping to get some time off again this winter and looking forward to doing some trades. I won't be done with this historic preservation ( windows ) but it will be way to cold to be pulling sashes out. So I'm going to try some day trading again. Its a lot easier If I can go long or short on whatever I go in on. Means no mater what the market is doing there's money to be made, short term. If I do well enough, then I'll try some less risky longer term stocks but as a starter ETF's are quick and simple.

cheers
B

 

Ok, I agree with you as well.

You got me on those auto parts suppliers. Hadn't see that, but I was seriously considering buying into some banks as well. They were way disproportionally hammered.

I guess what my rambling post was trying to say, though, was that the shorts and insider trades aren't a big deal. Even buying into the regional banks, if you invest in that class for a short upswing, a single insider trade or naked short on one of the regional banks isn't going to destroy your trade, which is comprised of a basket of securities, rather than say... just North Fork Bank.

The market is fair, IMO and that's kind of what I meant to say. It's late and I've been sniffing too much bog. Sorry for the ramble.

 

um
reminder
naked shorting is illegal and has been for quite some time in the USA at least. Recently in some EU countries as well

 

http://www.ted.com/talks/kevin_slav...m_campaign=newsletter_weekly&utm_medium=email
- - That should worry all you "day-traders", - How many milliseconds are you 'out of the loop'? - Where I am, it may as well be a year...

JPM Chase and Goldman Sacks are STILL naked shorting on COMEX in a big way - look at the COT http://www.caseyresearch.com/gsd/edition/gold-us-dollarand-greater-depression-doug-casey
- - and tell me they have any metal to back ALL those positions... and in particular those volumes (I have not followed for about 2 years now as I am out and retired)... CFTC is a dead and toothless dog, - tied with a short leash - and muzzle, - starved, and possibly poisoned... "A watchdog" it is not...

http://www.gata.org/node/10265 "Gene Arensberg: Comex swap dealers cover gold shorts like a big dog"

http://finance.yahoo.com/news/Goldmans-new-money-machine-rb-3582752116.html?x=0&.v=2 Something is 'in-the-wind' as Goldman Sucks is heavily into Aluminium, and the fizzy-drink-can-makers are very short of materials... This is a play to fire up soon... Who will be the victim?

 

a gentle reminder induced me to delete my last but the point is that naked shorting has been illegal in the US for quite some time and that short selling is a perfectly viable investment tool within the traders kit for profitable trading.

what if I were only allowed to bet on an increasing market when it was obvious to all that the market was shrinking, think very many people would sink money in the market? probably not.

Idea being that any investment is better than none and even shorting in its own way provides capitol with which the market operates

 

Shorting is selling shares you don't own. Then pay for them when the price drops.

makes money but does nothing for the market but make a it a casino.

 

actually not
naked shorting is selling shares you don't own
shorting is selling shares you've leased
selling shares you don't own is illegal and has been for quite some time, at least in the USA

which means that its not a legal market strategy, its been legal in the EU until very recently and remains legal in some markets to this day but not generally

which leads me to ask whats the beef

Shorting is nothing more than investing in a market drop
going long is nothing more than investing in a market rise
both are investments
neither deny investment dollars to the market

In the end the total volume of invested dollars remains the same, they simply change hands just like they would in a long trade

 

My point is that it does nothing for the market, it does nothing for the company whos shares your dealing with . You can drive down shares on a company that didnt do anything wrong but have greedy vultures at it when it was down. Its just greedy banking strategy. This is not what the market was made for.

The market was made to invest some money into a company you thought would do good,-- for this you got a dividend yearly. What good does it do buying 8.30 and selling 5pm.

The market has turned its roll from a place to invest in a company and a place where a company can sell shares, to a place of greed without the slightest glance back at a company you have just ripped apart that afternoon. It most certainly is not what we need.

legitimate means legal, moral --no, --business no, personal profit at the expense of anything and everything yes.

Is this what we need?

 

Hi Frosty, That is exactly the point I was alluding to... The intention of 'shares' and publicly trading them was to facilitate larger operations than a single person could manage, share the risk amongst many shareholders and reward them with an appropriate dividend that effectively cost less than the loan-sharks extracted...

- - In 'The Merchant of Venice', W. Shakespeare eloquently spoke to this problem of the loan-shark wanting a "pound of flesh", and the courts determining that not a drop of blood or anything else that may cause collateral damage or injury to the debtor...

There are several case studies, (but I cannot find them), where perfectly robust companies were shorted mercilessly and forced into receivership, whereupon the bankster offered to buy out at a ridiculous low price, just to sell the capital assets and leave many good workers out in the street without a job.... Is that what is meant by legitimate short selling?

Short selling can be a useful tool but also a VERY dangerous weapon of industrial destruction...

 

Ha- they got me as well.

The market was predicting some 45% failure rate as the suppliers consolidated through the economic woes of the recession. As it turned out only some 18% failed & though the whole sector was selling at pennies.

I carried four of my picks into reorganization (total loss of my investment). The others made up for it.

Regional banks... was anyone watching?
The country was seeing 4 to 6 banks fail each week!!!!
Black Friday every week as the assets were taken over by the FDIC and the investors (any still left) lost all...

Can you say risk management?

Oil service companies, nat gas suppliers..... ANYONE could have thrown a dart at the board and got a very healthy return.
The safe bets were selling for small increments of their value- I bought Alcoa of all things for 4.8 one morning in premarket... it is still a good buy at 12 AND at a good time to buy in...

Fear does wonderful things in the markets

Now we are back to normalcy and counting single digit returns each day.. sigh.

Boston- I will be right there with you.
I have been too busy of late but am going back in when I get a spot of time...
The spec plays are still neglected- I see the market as not willing to return so strongly to these just yet and I will buy up more.

 

Think of it this way Frosty
in any trade someone was betting something would go up and someone was betting it would go down. Does that make one the good guy and the other the bad? Ones decision could be based off a number of indices, doesn't really mater which ones tho? or are you suggesting that the indices be limited to only certain performance criteria rather than any others. Investors are likely to use as many performance indicators as they have at there disposal including short term potential.