Wednesday, February 10, 2016

Time for a rant

It's been a while since I had a rant, but I'm always astonished when I come across some articles like I've read over the last few days relating to the market drop since the turn of the year.

You get the usual comments from people who have lost money - ban short selling, ban hedge funds, the brokers are working in cahoots with the hedge funds, the market's rigged etc...

I saw someone complaining about a stock they had invested in dropping by more than 50% this week on the release of a trading statement - saying it's 'way overdone'. He conveniently forgets to mention that the stock had more than halved in value over the previous 3 months and was in a clear downtrend before this week's events...

The blame for this type of thing always seem to be on anyone and everyone else - particularly from investors who have lost money as a result.

They conveniently forget that the markets are made up of buyers AND sellers - all with their own reasons to buy or sell, at different prices, for different reasons - be it based on fundamental or technical analysis.

They conveniently forget when those same people and institutions take short positions in a rising market - are they bothered about short sellers then?

They conveniently forget that when markets turn around and start to move upwards, it is the short sellers who add fuel to the new uptrends which start to develop.

At the end of the day, those investors or market speculators who lose out only have themselves to blame. Everyone who participates in market speculation needs to accept the risk. But it is far easier to blame others when things go wrong - like their brokers, hedge funds or other market participants. 

Do these people not accept that prices can go down as well as up?

People like that should not be involved in the markets. Rant over.

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