Naked shorts
Shorting did not begin with The Big Short.
Trollope wrote about it in The Prime Minister in 1876.
Sexty’s fears were greatly exaggerated by the feeling that the coffee and guano were not always real. … His partner was of the opinion that in such a trade as this they were following there was no need at all for real coffee and real guano, and explained his theory with considerable eloquence. ‘If I buy a ton of coffee and keep it six weeks, why do I buy it and keep it, and why does the seller sell it instead of keeping it? The seller sells it because he thinks he can do best by parting with it now at a certain price. I buy it because I think I can make money by keeping it. It is just the same as if we were to back our opinions. He backs the fall. I back the rise. You needn’t have coffee and you needn’t have guano to do this. Indeed the possession of coffee and the possession of guano is only a very clumsy addition to the trouble of your profession. I make it my study to watch the markets, - but I needn’t buy everything I see in order to make money by my labour and intelligence.’ Sexty Parker before his lunch always thought that his partner was wrong, but after that ceremony he almost daily became a convert to the great doctrine. Coffee and guano still had to be bought because the world was dull and would not learn the tricks of trade as taught by Ferdinand Lopez, - and also possibly because somebody might possibly want such articles, - but our enterprising hero looked for a time in which no such dull burden should be imposed on him.
This is, of course, required reading for today's traders.
Shorting did not begin with The Big Short.
Trollope wrote about it in The Prime Minister in 1876.
Sexty’s fears were greatly exaggerated by the feeling that the coffee and guano were not always real. … His partner was of the opinion that in such a trade as this they were following there was no need at all for real coffee and real guano, and explained his theory with considerable eloquence. ‘If I buy a ton of coffee and keep it six weeks, why do I buy it and keep it, and why does the seller sell it instead of keeping it? The seller sells it because he thinks he can do best by parting with it now at a certain price. I buy it because I think I can make money by keeping it. It is just the same as if we were to back our opinions. He backs the fall. I back the rise. You needn’t have coffee and you needn’t have guano to do this. Indeed the possession of coffee and the possession of guano is only a very clumsy addition to the trouble of your profession. I make it my study to watch the markets, - but I needn’t buy everything I see in order to make money by my labour and intelligence.’ Sexty Parker before his lunch always thought that his partner was wrong, but after that ceremony he almost daily became a convert to the great doctrine. Coffee and guano still had to be bought because the world was dull and would not learn the tricks of trade as taught by Ferdinand Lopez, - and also possibly because somebody might possibly want such articles, - but our enterprising hero looked for a time in which no such dull burden should be imposed on him.
This is, of course, required reading for today's traders.
