Eye of newt, and toe of frog, Wool of bat, and tongue of dog, Adder’s fork, and blind-worm’s sting, Lizard’s leg, and owlet’s wing, For a charm of powerful trouble, Like a hell-broth boil and bubble. Double, double toil and trouble; Fire burn, and caldron bubble. Shakespeare’s Macbeth
The financial press frequently paints the picture of hidden cabals of short sellers conspiring together to drive down a stock, causing unrealised losses to retail investors and pain to executives whose company’s stock have been sold short. Whilst short-sellers are frequently derided as vultures, criminals, pessimists or un-Australian (or un-American), in reality shorting stocks is a hard, stressful and often lonely way to make money in the market. Short selling allows an investor to profit from taking a contrarian view. In this week’s piece we are going to look at short-selling shares a hot topic given the offshore shorting in February of the Australian banks.
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