I agree with Phil & hate shorting. It never happened many years ago. I think it should be banned. It can destroy a company or make them vulnerable for a cheap takeover.
I don't understand the concept & it causes more of the boom/bust & peaks/troughs with terrible volatility. The only thing it is good for is to allow unscrupulous finance sorts to make money whatever the cost.
I company can find they are doing good business, have good contracts in place, are making money, have good cash flow to find their stock price could halve in a short period just because a load of finance dudes want to short that stock. Ridiculous practice & makes for a corrupt and unlevel playing field.
I have never shorted or spreadbet a stock south & prefer to only bet going north. For the same reasons as Phil that it is positive and I'm a positive person. I can't stand negativity.
Too many conflicts of interest so IMHO shorting should be banned.
This is interesting.
I get the positive angle, around investing for growth, etc.. However, if you're investing to make money, then I think shorting has its place.
Human nature is that panic sets in quicker than euphoria, and people are much more scared of losing money than they are excited by making money. This is exacerbated by the bonus culture in most Investment Banks, and most trading desks.
As such, the masses, and the market in general, almost always over exaggerates bad news, and there is serious money to be made in betting on falls in share prices.
I dont do it as I don't have spare cash to gamble (and my job makes it complicated), but if I were making a living as a trader, I would be doing as much, if not more, shorting than investing