Q: I see that TSLA closed at 173.48 yesterday. That is down substantially from your short at 211 on January 15, 2016. Care to give us an update on your thinking?
A: The chartist would point out that it is now clearly under a two-year distribution top pattern. To their way of thinking that pattern now forms resistance and it is therefore safe to short at the current price.
Q: Do you agree?
A: I still think that the price will go to zero. At this point, I do not have an opinion on when that will happen, nor do I need to have an opinion. I will express a new opinion when new facts require it.
Q: Do you consider yourself a short seller?
A: Yes. When I have a USD contract to buy gold in the future, I am long gold and short the USD. If you are a trader, you are also a short seller. It is impossible to avoid it.
Q: Why then are short sellers so often vilified? In some jurisdictions it is illegal to short sell shares. Why is that?
A: Short sellers of shares interfere with stock brokers’ marketing programs. They benefit from being able to sell overpriced shares at the high prices financed by marketing brokers without paying promotional expenses. The stock touts understand that and frequently have enough political influence to make short selling illegal.
by Arthur Fixed
[box type=”info” style=”rounded” border=”full”]Commentary from Arthur Fixed the author of the Art of Speculation during Civil War – Sun Tzu Meets Jesse Livermore is a private manuscript copyrighted 2012 by Art Fixed.[/box]
Leave a Reply