Dr. Jim Collier's Insights & Strategies » Wall Street http://drjimcollier.com PRACTICAL WISDOM FOR EVERYDAY LIVING Sat, 24 Jul 2010 11:54:37 +0000 en hourly 1 http://wordpress.org/?v=3.0 What is Short Selling And Why Must It Be Banned? http://drjimcollier.com/business/what-is-short-selling-and-why-must-it-be-banned/ http://drjimcollier.com/business/what-is-short-selling-and-why-must-it-be-banned/#comments Fri, 19 Sep 2008 14:32:58 +0000 drjim http://drjimcollier.com/?p=157 The US Securities and Exchange Commission on Friday temporarily banned short selling of shares in certain companies in emergency action aimed at boosting investor confidence amid financial turmoil.

I am not a stockbroker but let me give this a try. Short selling basically means that you sell stock that you don’t own. Basically you borrow a stock and then you sell it as soon as you can. The idea is that you want the share of stock to fall in value so you can buy it back at a lower price.

Are you confused yet? There is more! Those involved in this practice frequently spread rumors to get the stock to drop.

There use to be regulation on Wall Street to prevent this practice called the Uptick Rule but the SEC got rid of it. Their reasoning was that it was an ineffective rule.

Maybe I am naive about all of this but it seems to me that the Feds need to investigate the Sec. What do you think?

If you would like more information about this dubious practice here is a link:

Investopedia

]]> http://drjimcollier.com/business/what-is-short-selling-and-why-must-it-be-banned/feed/ 0 Wall Street in Despair http://drjimcollier.com/business/wall-street-in-despair/ http://drjimcollier.com/business/wall-street-in-despair/#comments Tue, 16 Sep 2008 01:39:01 +0000 drjim http://drjimcollier.com/?p=152 The latest collapses on Wall Street will no doubt stir up calls for more government regulation of financial institutions. Lehman Brothers is the latest Wall Street firm to go belly up with their filing for bankruptcy protection under chapter 11. Merrill Lynch was aquired by Bank of America because of the swift action of its management. It will soon be public knowledge that the Ceo of Lehman Brothers recently turned down two viable offers to sell off parts of the company. The days of the footloose and fancy free high profile investment banks are drawing to a close. Take a look at the bonuses paid out to Ceo’s of failing operations. What is wrong with this picture?

The Bible states that “pride goes before a fall” and if we look at the pride trail we can see what happened. I will be running an article on strategic planning tomorrow that you may find enlightening.

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