Moral dilemma or am I overthinking?

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iamrefreshed

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I don’t know if anyone here is stock savy but here goes.

Is it wrong to short stocks?

Shorting stocks, for those who don’t know, is basically borrowing shares from someone with the intent to buy and return them later.

If the price goes down you make money. If it goes up you lose.

Is it wrong to want prices to go down knowing it will cost others money?
 
Are you related to MS? Of course it is wrong to not want someone else to benefit-look at the dishonest steward-moral people do not try to be sneaky. My question is if someone is doing this to you do you have the right to be dishonest back to save your investment?
 
I’m afraid I don’t understand anything you stated in your post. Would you clarify?
 
No, it is not wrong to short stocks. You are taking a risk, just like any investor. As long as you are not using any inside information, there should be no moral dilemma.
 
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iamrefreshed:
I don’t know if anyone here is stock savy but here goes.

Is it wrong to short stocks?

Shorting stocks, for those who don’t know, is basically borrowing shares from someone with the intent to buy and return them later.

If the price goes down you make money. If it goes up you lose.

Is it wrong to want prices to go down knowing it will cost others money?
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I Am Refreshed,

While it may not be wrong to short stocks, it isn’t the wisest of things. Your liability is unlimited; if the stock goes way, way up you can lose your shirt bigtime. With regular investments your liability is limited to the money you invest.

Presumably you would short a stock because you think that the price will go down, not because you want the price to go down. (If you do the latter, then you are REALLY being unwise.) As such, any desire that the price go down would be because you want your investment to pan out, not because you are wanting to hurt the other investors.

I have a bit of a problem with short sales simply because my making money would be strictly because somebody else lost money. It’s a zero-sum game. Regular investing is a non-zero-sum game; the rising tide lifts all boats. So I don’t know that you would be out of the woods morally.
  • Liberian
 
In any stock market transaction, the idea is to buy low and sell high. Selling short is the same, except that you sell high before you buy low. Or, at least, that is your hope. (If the stock continues to rise, you’ll end up buying even higher to cover your short, thereby losing money.)

If you think a stock is overpriced and headed downward soon, go ahead and sell short, provided you can afford to take the risk. You’re not taking money out of anyone’s pocket. There is no moral dilemma.
 
Overthinking? No, you just have a conscience. I don’t see a thing wrong with shorting stocks. The stock market is one giant game of risk. If you’ve found a way to legally win the game…more power to you. That just gives you more money to help the poor or support your family.
 
I don’t see anything wrong with shorting stocks. You are basically betting that the price is going to go down. You’re not hoping that someone will loose money. People will loose money either way. It’s basically similiar to betting on sports. You are betting on a particular team meaning that those who bet on the “wrong side” are going to loose.
 
Shorting stocks is not morally wrong. As in any type of investing or trading though, one must be a good steward of his/her financial assets.
 
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JimG:
In any stock market transaction, the idea is to buy low and sell high. Selling short is the same, except that you sell high before you buy low.
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Jim,

That’s quite a different perspective from any I had heard before. Thank you.
  • Liberian
 
For those who would like someone else to do their shorting for them, you could look into Prudent Bear Fund. But I don’t think it’s done all that well lately. And please don’t take this as investment advice! My investment advice is usually wrong.
 
Thanks for your answers. I tend to agree that it is not wrong to go short.

If I opened a dry cleaning store in a town that already had a dry cleaner I don’t think I would be wrong. If I gossiped about the other owner to get his business that would be another story.
 
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