I want to short sale and make some easy money. Why isn't everyone doing it?
You short an asset when you think its price will be lower tomorrow than it is today. From the article,
A short sale occurs when a customer borrows a security, sells it in a bet that the price will go down, then buys it back later at the lower price to reimburse the security's lender
If the price goes up, then you have to buy it back later at the higher price. There are many ways to short assets. Stocks are the most obvious, but there are numerous ETFs that short entire market sectors. ETFs also exist to short gold, silver, US treasuries and so forth.
“Can anyone explain what short sale means to a doorknob like me?”
The above URL links to an online presentation — 100 slides, approximately an hour — that explains it all: short sales, naked short sales, stock IOUs, Failure-to-Deliver, (FTD), the role of the DTCC, the role of Broker-Dealers, the collapse of Bear Stearns and Lehman, the almost unreported Refco scandal, and most importantly, why the SEC has not, and will not, do anything about fundamental systemic corruption in the capital markets.
From a basic “public choice theory” analysis, the reason the SEC is so ineffective — see, e.g., the $450K fine to Goldmam — is that the SEC has been in on this whole thing for many, many years. In public choice theory terms, the SEC is a “captured” regulatory agency; i.e., it serves the interests of the very industry it’s supposed to be keeping an eye on. These points, too, are gone over in the above-linked presentation.
I want to short sale and make some easy money. Why isn’t everyone doing it?
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because it requires real money to cover if it goes wrong. I personally have always thought it was easier to spot a “dead man walking” and bet on it’s demise than decide which one out of hundreds of great athletes will make it to the finals...
Right now underfunded mid caps that are sell high end type goods are due to get hammered ... RUTH Chris steakhouse is down 25% in a few weeks from over $6 to $4.36 ,, they were almost bankrupt a few months ago (trading at $2) ,, sold their newly built HQ building and had what amounts to a secondary offering to raise cash... when the Obamacare tax kicks in and the economy tanks nobody will eat there even if they have the money ... they’re dead...
>>Can anyone explain what short sale means to a doorknob like me?
To little people like us?
It means BOHICA.