Those Who Short Stocks Are Terrible People

I generally try to avoid stereotyping people with generalizations, but I’m pretty much at my boiling point and have come to the realization that I can’t stand people who focus their investing on shorting stocks.

What Is Short Selling?

Shorting a stock is basically the opposite of purchasing a stock.  You short if you believe that a stock is going to go down.  You basically ‘sell’ a stock at the price it is today, and then later on close the position by ‘buying’ it at what the price is at that point.  So, if you have a stock that’s worth $10 today and you short 1,000 shares, then close your position when it’s $9, you’ll pocket $1,000, or $1 per share.

Obviously, there’s risk involved with it, in that if the stock goes up in value, you’ll lose money since you’ll have to close your position at a higher price.

Why Do I Dislike Short Sellers?

I do a little trading in stocks now and then.  As such, I follow the stocks in which I have positions or am interested in potentially opening a position.  I follow message boards and forums, and it’s between what I’ve observed here as well as a general understanding of the practice that has led me to the conclusion that short sellers are terrible people.

Disclaimer: I want to make a distinction here. Although I’ve never shorted a stock, I have thought about it in instances where I believe that I think a stock is overpriced.  I’ve never acted on it, but if someone opens a short position here and there, I could place them outside the generalization.  Maybe.

  1. They are the meanest people on message boards – I don’t take message boards and their content as very much weight when making potential investment decisions, but I do read them to get an idea of sentiment. And, if there’s a stock that has a high level of short interest, they are outright mean.  It’s one thing if you want to make money for yourself, but people who short stocks actively wish for and express happiness for those who lose money.  It’s disgusting.
  2. Short selling is, by itself, negative – Movies and books finish off with a happy ending most of the time, because that’s what people like.  Short selling is akin to an unhappy ending in a movie.  A person shorting a stock is hoping that it goes down.  This generally ties to the underlying company doing poorly.  While not always, a poorly performing company is often losing money, laying people off, and such.
  3. The perception of corruptness – If you open a trading account and want to short a stock, your broker is supposed to have the corresponding shares available that you’re shorting, generally in the portfolio of another investor.  After all, you can’t simply create shares out of thin air.  This would be ‘naked short selling’ and while this is illegal, you’ll find that there are few out there that don’t believe it doesn’t happen.  And, we’re not talking retail investors, we’re talking that there are hedge funds out there opening short positions that they can’t cover, but because the SEC effectively enforces nothing, who’s to stop them?  Nobody.

Regulation Is Needed In The Practice Of Short Selling

I think that three things need to happen to control the short selling that I believe has gotten out of control.

  1. Monitor naked short selling – Spot checking should be done to match up short positions with available shares to ‘buy’.  If they don’t match, then there is naked short selling occurring and this should be punished.
  2. Identify and punish short manipulation – It’s generally believed that hedge funds that have large short mb-201312billscoinspositions will often open and close small positions to drive down the price.  This works in periods of low volume.  In a simple example, if you’ve got three investors each with 100,000 shares short, and there is no volume, then they could start trading 100 share blocks between themselves, pushing the stock down with each trade.  What reason would someone holding 100,000 shares short have to buy and sell 100 share lots in a low volume day?
  3. Re-implement the uptick rule – For awhile, there was a rule that a short trade could not be executed until the stock went up.  If a stock was trading and went from $10.00 -> $9.95 -> $9.90 -> $9.85, then a short transaction would not be filled.  Only when it went back up to $9.86 would it be filled.  This was designed to prevent shorts from accelerating a declining priced stock.  But, that rule was ‘suspended’ and now it’s easy to jump in and short a stock that is already lowering in price.  This has the snowball effect of pushing the price further down, not to mention that it keeps potential buyers on the sideline who know that it’s being attacked, which ends up hurting the price even more!

As you can tell, I have no love for those who short stocks.  I don’t believe that the market always needs to go up, because that’s unreasonable and that’s how bubbles happen.  But, I equate shorts with vultures, in that they’re simply opportunistic and greedy and take a bad situation and make it worse.  Why in the world do we advocate that?

Readers, do you have any knowledge or opinion on short selling stocks? What do you think?

Copyright 2015 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

Thoughts After Experiencing Uber Firsthand

Uber is one of the more popular new things over the past couple of years.  I’ve read a lot about the benefits both of taking Uber for rides and driving for Uber as a way to make money.  The articles and posts are many, and the topic has always interested me, but I never took the opportunity to experience Uber firsthand until earlier this month.  I finally did and was really impressed!

Uber Here, Uber There, Uber Everywhere

While Uber has always interested me, I never had real cause to use it.  I have my own car, and if I want to go somewhere, I just drive there.  I surmised that many people probably use it as a way to go out and enjoy a few drinks, but at the age of 40 with two young kids, those opportunities are pretty rare, and sleep is often chosen instead even when the opportunity arises!

My sister-in-law recently started dating someone.  He’s a fun guy and still enjoys going out, and he uses Uber all the time.  He enjoys having a few drinks but is unwilling to risk driving, so he has been using Uber regularly for awhile.  I’d  heard about how he and my sister-in-law would go out from time to time and ‘Uber around’ and it piqued my interest even more.

Then, someone found out about a festival in the area that we all wanted to attend, and we made plans for the four of us to go.  The festival is near a downtown area and had various food and drink booths set up, and was focused around whiskey and barbeque food.  We made arrangements to drop off the kids at my parents so that we could attend, and it was a foregone conclusion that we’d Uber.

Here’s how it went.

  • Change of Plans  – My wife and sister-in-law both love the ‘rum runner’ from a place that happens to be on the way, so we decided to make a stop there on the way down.
  • Checked Uber – My sister-in-laws boyfriend has the Uber app on his phone, and he brought it up to look for a ride.  I wasn’t sure how it worked so he showed me. He was able to see that the nearest ride from our house was about 4 minutes away, and that you could see on a map exactly where they were driving in real-time.  Cool!  He called for the pickup.
  • Called the Uber driver – Once he called for the ride, he got more information, including the drivers name, cell phone number, and the type of car.  The car was a BMW, and he decided to call the driver to make sure that we weren’t going to get charged more, as better cars are often part of another class of service.  The driver confirmed that he was working in the ‘normal’ rates.
  • Four minutes later – Four minutes later, as promised, the driver pulled up to our house.  We got in.  The driver was a pretty nice guy, and asked if his car smelled OK, as his last pickup was a lady that worked at a restaurant preparing fish for lunch and dinner.  We all agreed the car smelled fine!  The drive down to the restaurant was about 15 miles, and took about 20 minutes.  Once we got out of the car, the fare came up as $15.71, if memory serves.
  • Down to the festival – After enjoying a round of drinks and an appetizer, it was time to go down to the festival.  Another pop up of the app and we saw a driver about two minutes away.  We quickly called for it and it pulled right up and let us in.  It was a quick trip down the street, about 4 miles, and the fare was around $7.
  • And later on back home – We stayed at the festival for a few hours, stopping at a couple of bars so that we could sit down as well (it was hot plus it rained some), and by 11pm, we were ready to head back.  We actually called for one Uber, then cancelled it, because it was coming faster than we were ready for.  My brother-in-law was worried that he’d get rated by the Uber driver.  I haven’t confirmed whether or not that happened.  Finally, when we were ready to go, another ‘call’ was made and we were zipping home within five minutes of the call.  The driver took a detour on the way home due to some road construction that had the freeway jammed up, so it took a few minutes longer than we expected, but the fare was still just over $20.  He and my sister-in-law had the driver stick around and they started another fare to get to his house, which I know went just fine.

Impressions of Uber

  • Price – The price was awesome.  Between the four of us, it cost just over $40 for three trips. No cab service in the world could beat that.
  • Speed – In all cases, the speed of the pickup was incredible.  It helped that all of the pickups and dropoffs are in areas that are well traveled, but given the fact that Uber has a potentially unlimited number of drivers, waiting was not a problem at all.  Each of the drivers said that they chose to work that day, and did so because they knew the fares were out there and they’d keep busy.
  • Drivers and Cars – All of the drivers were nice and all of the cars were in good shape and very clean.  I believe that each driver was given 5 stars (apparently the rating system is very important ).

My Final Thought

The final thought that I want to put out there was one that I had early on in the night: I wish Uber had been out there back in my days of being single and going out.

Back then, going out was always more complicated because of the driving situation.  We’d gather at someone’s house,mb-2015-07-club and it always made sense to gather at the house closest to where we were going, which was sometimes a hassle because sometimes we’d be at the same persons house over and over, or other times people would have to drive a long ways just to get there.  Then, you’d get there and you’d have to make the decision on what to do about going out.  Call a cab, and it’s $70 one way, an hour and fifteen minutes, and guess what, it’ll probably be even longer when you call from your pickup at the same spot everyone is using.  Lovely.  So, then, you start looking around the group and see if anybody feels like not drinking that night, or worse yet, you find someone that says they’ll ‘just have a couple’ and hope that ‘just a couple’ sticks and even if it does, know you’re possibly taking a chance anyways.

Thankfully, back in our days of going out, nobody ever got in an accident and nobody ever got pulled over or anything like that, but I can’t tell you the number of times that we would have preferred not driving.  Uber would have been perfect.  It was affordable, at the ready, and reliable.

Overall, it doesn’t get much better than that.

Now, we probably won’t use it much, but even if we want to go out once in a while and know that we might each want more than a drink or two, it makes perfect sense to take Uber.  It’d be silly not to!

Readers, what do you think about Uber? Any drivers or users out there?

Copyright 2015 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

Can E-Cigs Save Smokers Money?

Aside from the many well-known  negative consequences smoking has on your health, the constant increase of taxes has meant the cost of buying traditional cigarettes will put a major dent in your spending budget. And with governments becoming more and more strict on habits that increase the cost of healthcare, the price of cigarettes is only set to increase.

If you’re a smoker and are looking for a cheaper option that will also give you the opportunity to kick the habit altogether, than making the switch to E-cigarettes is a perfect choice for you. Here’s why you should make the switch.

Blu Cigs New Pack

It will save you money

Health organizations have calculated that smoking only 10 cigarettes a day will add up to a cost of nearly $800 after six months, $1700 after a year, and ten years down the line your total cost of smoking will be up over a whopping $17000 (especially if you live in a state where cigarettes are highly taxed). Currently, the average smoker actually smokes a little over 12 cigarettes a day. Switching to E-cigarettes gives smokers a great opportunity to save, as the average E-cig cost for the equivalent of one pack of traditional cigarettes is only a fraction of the price.

How do E-cigs save you money?

E-cigs save you money because they reduce the cost of producing the substance that provides its users with nicotine, they’re not as heavily taxed as traditional cigarettes, and they don’t require the massive amounts of packaging that tobacco and fire cigarettes do.

In fact, the only substantial cost of switching to E-cigs comes when you buy your starter kit, which includes your e-cigarette, charger, and e-liquid (the substance which contains the nicotine). After purchasing your starter kit, the remaining costs come in the form of ecigs refills, which are done simply by  refilling your E-cig with the E-liquid, which can purchased at a low cost in bulk form.

Blu E Cig Battery

The ultimate savings comes in quitting

Starting in 2016 various health organizations throughout the world will adopt the E-cig as their most recent form for quitting smoking altogether, which obviously will provide an ex-smoker with the largest possible savings. The E-cig allows its users to quit by monitoring their intake of nicotine and gently reducing it over time until they no longer are addicted to the substance. Different types of E-liquid can be purchased with varying strengths of nicotine, making it easy for E-cig users to create a schedule and plan to help them achieve their goal of quitting.

Whether you’re simply looking for a cheaper option to traditional cigarettes, or want to find a way to live a nicotine free life, making the switch to E-cigs is the best way to save you money.

Some content in this post was provided by an outside party.  Images by  Lindsay Fox and  Ecig Click used under the Creative Commons License.

Copyright 2015 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

Another Big Hack And Nothing To Worry About For Me!

Man, it seems that every time you turn around there’s another company that’s gotten hacked with some sort of data breach.  Target, Home Depot, and many others have all hit the news over the past months.  Those are some big names, so it should probably be of no big surprise that the biggest website for those looking to cheat on their spouses got hacked.

That’s right, Ashley Madison, home of the “Life is short, have an affair” slogan, announced that their databases were hacked.  The company hasn’t officially released information about what exactly was hacked, but I have to believe that there are probably a lot of nervous people out there right about now, and I’ll also bet that there’s a lot of people worried about a lot more than whether their credit card data was part of the breach!

Dangerous Information

In most hacks, there are a few key pieces of information that are probably the most valuable to hackers and the most damaging to someone whose information is compromised:

  • Credit Card Number
  • Other Credit Card Details (expiration dates, validation codes)
  • Social Security Numbers

With this hack, those items are certainly key, but it seems a lot of other information could land someone in the mb-2015-07-doghousedoghouse, even so much as:

  • First and Last Name
  • E-mail Address

Might Ordinary People Pay These Hackers?

In most cases of hacking, the information contains value, but do we really know who might be on the other end of those transactions?  If a hacker steals data, you picture the parties that might buy that data as someone overseas, or a shady criminal or someone using their computer hiding in a dark basement in the thick of night.

With this hack, the people that might pay for the data could be sitting right next to you.

If someone were to suspect their spouse of having an affair, it might be worth putting $10 in the hands of ‘the bad guys’ to have the opportunity to look up a few e-mail addresses against the Ashley Madison database, don’t you think?

While some cheaters might first create a new e-mail address that their spouse doesn’t know about, many probably don’t go through the trouble.  If a suspecting spouse knows their work e-mail, their current personal e-mail, and their college e-mail address that’s no longer appropriate for everyday use, that’s three chances that would probably uncover a lot of potentially cheating spouses.

Worth $10 for three chances?  If I suspected my spouse of cheating, that’d be money well spent.

No Suspicions Or Anything To Hide

Thankfully, I have no suspicions of my wife and I can state that any lookup of any of my addresses would come up clean.

Cheating is one of those things that’s a show stopper for me.  I’ve been cheated on, and when I found out, I broke up with the girl.  At the time, I thought she was my soulmate, and breaking up was the one of the hardest things I’ve ever done in my life, but I did it and looking back, I’m glad I kept my resolve.  The closest I ever came to cheating was kissing another girl while in a relationship.  That was twenty years ago. And I told my then-girlfriend almost immediately.

That’s the beginning and end of my ‘cheating’ experiences.

That’s why the whole premise of Ashley Madison always kind of disgusted me.  It didn’t surprise me that a site like that existed.  There’s something for everybody, and as long as its not illegal, you can best bet that someone is going to find a way to profit from it.  Since you can’t go to jail for cheating, someone seized the opportunity and presumably a lot of people made lots of money.

Now, if this hack threatens the personal information that could be damning for those who signed up or used the service, it could end up costing a lot of people a lot of money, sleep, and a lot more.

But, maybe that’s the risk one takes if you decide to go out looking to cheat on your spouse.  I’m just guessing on that, though!

Readers, what do you think of the Ashley Madison hack?  Did anyone you know pop into mind as someone who might be in some hot water?

Copyright 2015 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.