Rik's Ramblings

Monday, March 23, 2009

Short Selling

Everyone hates people that short stock at the moment. But it seems to me that shorting stock is a (healthy?) reaction to other speculation in the market.

People are complaining because the Yahoo stock they bought at $40 is barely worth $10 right now. But when you bought that Yahoo stock what was it really worth? Never was it worth $40! You paid that much because you were speculating - speculating that Microsoft would buy Yahoo and you would make a killing. What were you thinking? Did you think Microsoft would be forced to buy your holding at a million dollars per share?!

Egg on your face?


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