Holy hell... could you imagine making $67 Million in 25 minutes?

[Crusty]

Originally posted by: SSSnail

Originally posted by: Crusty


How did I shaft TWO people out of money? One person wanted to buy the stock and he bought it, therefore spending money he was willing to spend. The other person was content in holding onto their stock and had no intention of selling it... therefore they let me borrow it

This has nothing to do with the companies involved. There are risks with becoming a public company, and people short selling your stock is one of those risks. If you can't handle that, then you don't belong in business.

Oh yeah? So let's say the person you borrowed stocks from their stocks were at 10 dollars a share, and after you have "borrowed" it it's now worth 5 dollars. The person that just bought your stocks, bought it at 9.50, but later have to sell because they can't afford to hold on to a sinking stock, which you would buy and return to the original holder at 5 dollars a share. Wow, where did you go to school? This very simple concept can be explained to third graders. Either way you look at it, the ONLY person that benefited from this is the shorter, immoral.

Edit: Oh, I forgot, the hookers and blow dealer would benefit too.

Huh? If the person I borrowed from wants to sell their shares, they sure can. There's nothing that prevents them from selling it whenever they want to.

What don't you understand about this concept. When I buy shares to return to the person I bought it from I DO NOT HAVE TO BUY THE SAME SHARES BACK.

Every buy/sell of a stock is a single transaction. There's nothing that binds you to selling/buying those particular shares of stock again.

I borrow from person A.
Sell to person B.
Buy from person C.
Return to person A.

 

[SSSnail]

You're right, my business mindset is of traditional sense; make money, pay money, everybody wins. I will have to learn this new crooks mentality "business" where you drive everyone under just so you can make a buck.

What you utterly failed to understand is that it doesn't matter where the shares come from, they're worth the same when you sold and bought. In my case, it doesn't matter if my 400 public shares are held by 400 different people and are purchased by 400 other people, at the end of the day 801 persons would have been shafted. My company cap is now half, thanks a lot though because it's a victim less crime, amirite?

As a principal share holder, I lost half of my money, and I didn't even do anything. Great!

 

[Crusty]

Originally posted by: SSSnail
You're right, my business mindset is of traditional sense; make money, pay money, everybody wins. I will have to learn this new crooks mentality "business" where you drive everyone under just so you can make a buck.

What you utterly failed to understand is that it doesn't matter where the shares come from, they're worth the same when you bought and sold. In my case, it doesn't matter if my 400 public shares are held by 400 different people and are purchased by 400 other people, at the end of the day 801 persons would have been shafted. My company cap is now half, thanks a lot though because it's a victim less crime, amirite?

WTF are you talking about? If I bought one share at $10 and then sold it at $15 how are they worth the same?

 

[SSSnail]

Originally posted by: Crusty

Originally posted by: SSSnail
You're right, my business mindset is of traditional sense; make money, pay money, everybody wins. I will have to learn this new crooks mentality "business" where you drive everyone under just so you can make a buck.

What you utterly failed to understand is that it doesn't matter where the shares come from, they're worth the same when you bought and sold. In my case, it doesn't matter if my 400 public shares are held by 400 different people and are purchased by 400 other people, at the end of the day 801 persons would have been shafted. My company cap is now half, thanks a lot though because it's a victim less crime, amirite?

WTF are you talking about? If I bought one share at $10 and then sold it at $15 how are they worth the same?

Are you daft? You're not buying low selling high. You BORROW to sell at 9.50 and BUY BACK at 5. I'm really done with you.

Edit: In case you have a reading comprehension problem, read the whole sentence. You said you bought from A to sell to B to buy back from C to give to A, or whatever. I said, the share prices of when you performed the transactions are worth the same, or IT DOESN'T MATTER WHO OR WHERE YOU BUY IT FROM, THE INTRINSIC VALUE IS THE SAME. That means A or B or C will have all be shafted.

 

[Crusty]

Originally posted by: SSSnail

Originally posted by: Crusty

Originally posted by: SSSnail
You're right, my business mindset is of traditional sense; make money, pay money, everybody wins. I will have to learn this new crooks mentality "business" where you drive everyone under just so you can make a buck.

What you utterly failed to understand is that it doesn't matter where the shares come from, they're worth the same when you bought and sold. In my case, it doesn't matter if my 400 public shares are held by 400 different people and are purchased by 400 other people, at the end of the day 801 persons would have been shafted. My company cap is now half, thanks a lot though because it's a victim less crime, amirite?

WTF are you talking about? If I bought one share at $10 and then sold it at $15 how are they worth the same?

Are you daft? You're not buying low selling high. You BORROW to sell at 9.50 and BUY BACK at 5. I'm really done with you.

What difference does it make whether I buy or sell first? The idea is to make money, if you decide to hold onto your shares while I decide to short, that's your own problem. The market dictates the price, and if you can't understand that you have NO business trading anything.

 

[SSSnail]

I usually use this analogy for short selling, and I think I'll have to use it again today.

Do you have a girlfriend, wife, sister, mother? Can I borrow them? Promise to return them washed and good smelling, just as they were when lend them to me.

You're right it's all about making money, selling drugs is about making money too. I guess it's up to each individual moral compass to lead them on their decisions. I refuse to short anything, ever. Frankly, if you want to short ANYTHING right now, it's not that difficult. Just pick a down swing day, which is every other day.

Sssnail has left this thread.

 

[Crusty]

Your analogy is terrible because when I get the stock back from the person I lent it to it's in exactly the same condition it was when I lent it to them, a piece of paper.

Why would I let you borrow a person from me? That's stupid. I will let you borrow stock from me though.

 

[alkemyst]

Originally posted by: JS80

Originally posted by: sindows

Originally posted by: JS80

Originally posted by: skim milk

Originally posted by: JS80
I know someone who works at Paulson...got a 7 figure bonus last year.

how old is this person and what type of educational background does this person have? he works as a trader right?
i want to join a hedge fund one day

26, ivy league finance.

FYI the days of hedge funds are over.

Why do you say that? I'm not keeping up on hedge funds but AFAIK there is no pending regulation for hedge funds.

Hedge funds thrived the past decade because of easy credit and huge leverage. Those days are over. I'm not saying ALL hedge funds will eventually shut down, all I am saying is that the days of an ivy leaguer going to wall st then to private equity or hedge funds is over.

usually no one can provide a name or face to this 'high achiever'...and if so, nothing that relates them.

 

[her209]

Originally posted by: her209

Originally posted by: Crusty

Originally posted by: her209
1. Al wants to short stock ABC. Calvin wants to buy stock ABC.
2. Betty owns one share of ABC.
3. Al borrows Betty's stock and sells it to Calvin.
4. Dave also wants to buy stock ABC.
5. Al borrows Calvin's share of ABC and sells it to Dave.

Is it legal to have more shares outstanding than there are actual shares? What happens when there aren't enough shares to cover the shares outstanding on a margin call?

Markets are a zero sum system(or should be at least). Al owes 1 share of stock to Betty and 1 share to to Calvin.

In the end of your scenario

Betty owns 0 shares
Al owes 2 shares
Calvin owns 0 shares
Dave owns 1 share

What you are missing is when Al buys the two shares he owes and gives them back. When he does that

Betty owns 1 share
Al owes 0 shares and owns 0 shares
Calvin owns 1 share
Dave owns 1 share

I get all that.

How many times can a share be borrowed and sold?
Can Betty or Calvin sell their share even though its been loaned out?
What happens if Dave won't sell you his stock (when Betty/Calvin asks for their share back)?

Just thought of another scenario:

Can Betty buy "more" shares of ABC from Al? In other words, Al borrows the share from Betty, sold it to Calvin, borrowed it from Calvin, and is now selling it to Betty.

 

[Crusty]

Originally posted by: her209

Originally posted by: her209

Originally posted by: Crusty

Originally posted by: her209
1. Al wants to short stock ABC. Calvin wants to buy stock ABC.
2. Betty owns one share of ABC.
3. Al borrows Betty's stock and sells it to Calvin.
4. Dave also wants to buy stock ABC.
5. Al borrows Calvin's share of ABC and sells it to Dave.

Is it legal to have more shares outstanding than there are actual shares? What happens when there aren't enough shares to cover the shares outstanding on a margin call?

Markets are a zero sum system(or should be at least). Al owes 1 share of stock to Betty and 1 share to to Calvin.

In the end of your scenario

Betty owns 0 shares
Al owes 2 shares
Calvin owns 0 shares
Dave owns 1 share

What you are missing is when Al buys the two shares he owes and gives them back. When he does that

Betty owns 1 share
Al owes 0 shares and owns 0 shares
Calvin owns 1 share
Dave owns 1 share

I get all that.

How many times can a share be borrowed and sold?
Can Betty or Calvin sell their share even though its been loaned out?
What happens if Dave won't sell you his stock (when Betty/Calvin asks for their share back)?

Just thought of another scenario:

Can Betty buy "more" shares of ABC from Al? In other words, Al borrows the share from Betty, sold it to Calvin, borrowed it from Calvin, and is now selling it to Betty.

Sure, now Al needs to buy 2 shares of stock, one to give back to Calvin and one to give back to Betty.

You have to understand that for the most part this is all electronic. When you place an order to short a stock you usually include a field called the Locate which specifies which broker is responsible for tracking down the shares you are borrowing. It's then up to the person doing the shorting to make sure the broker knows they are shorting, has set aside shares for them or the broker has an abundance of shares and doesn't need to do anything special other then the bookkeeping involved.

It's all a numbers game, it doesn't matter where a share comes from or where it ends up. They are all worth the same thing at the same time, the price of the current market in the stock. Once you make a transaction with one person, there is absolutely nothing tying you down to doing another transaction that person. Likewise, if I borrow 100 shares from you, I can return 100 completely different shares of the same stock, all that matters is that you can't do anything with those 100 shares until I do return some to you.

 

[spaceman]

no

 

[rh71]

Originally posted by: xSauronx

Originally posted by: TallBill
At some point I'd stop caring about making more money. Not sure where that'd be, but it wouldn't be in the billions.

seriously, ive been saying that for years. if i had some great business idea and i was worth 10 or 15 million, id call it a day. nevermind the potential, im easy to please and lazy. id be living like a prince in eastern europe or south america....or both.

People with a head for making that kind of money in the first place don't have such a personality to just stop... it's always more more more. If you hit the lottery then yes your situation is realistic, which I'd also agree with.

 

[txrandom]

Reading SSSnails post are funny. Shorting helps keep the market efficient. They are both calculated bets. With investing, you are betting it goes up. With shorting, you are betting it goes up.

The person shorting has no bound on their losses while the other has a lower bound of 0.

 

[alkemyst]

Originally posted by: txrandom
Reading SSSnails post are funny. Shorting helps keep the market efficient. They are both calculated bets. With investing, you are betting it goes up. With shorting, you are betting it goes up.

The person shorting has no bound on their losses while the other has a lower bound of 0.

naked short selling is the problem. Her209 pointed out the valid scenario having more shares then actually out there trading.

the real problem is the sharks know this and up until recently would use this loophole to fuck up a company and bring it down overnight.

Much of commodity trading also ends up really fucking everyone in the end except those in the upper class. Joe Daytrader thinks his $2000 profit on $1000 invested was great on oil futures...unfortunately he is losing more than that at the pumps.

 

[Bignate603]

Originally posted by: TallBill
At some point I'd stop caring about making more money. Not sure where that'd be, but it wouldn't be in the billions.

This isn't personally his money, it's a hedge fund which will have many investors. He manages it though.

 

[ModerateRepZero]

I'm still learning about the stock market, but even I think that SSSnail's reasoning about short-selling is flawed.

The big problem I see is twofold: first, that short-selling is a cynical ploy (betting a company's stock will decline) whereas simply buying a stock is an optimistic act of faith (belief that a company's stock will go up), and that people can and will make misjudgments. For example, Big Tobacco's shares probably declined after the multi-billion dollar Master Settlement Agreement years ago, but in the long term it benefited the tobacco companies as they won immunities from most lawsuits stemming from tobacco use. Whether you buy, sell, or short a stock, you run the risk of financial misjudgment...basically concurring with crusty's point:

What difference does it make whether I buy or sell first? The idea is to make money, if you decide to hold onto your shares while I decide to short, that's your own problem. The market dictates the price, and if you can't understand that you have NO business trading anything.

if you still don't get it, then let me ask you, are you 'ripped off' if a gas station advertises a price and then, due to supply, demand, or both, decides to lower the price. as a consumer you're unaware of the station's situation and don't know why the price was changed, but you obviously paid more at the time than you would have if you had waited....

the second issue i take is that you can certainly 'pump up' a stock's price (illegally) and benefit stock buyers.....people have gotten in trouble for posting on message boards extolling a stock and causing a stampede of buyers (I assume with people who own a stock selling theirs to others at a premium price), with the only problem being that the information posted was false.

old example: http://www.internetnews.com/bu...rticle.php/5321_568551