On many threads, anti-shorter rants can be heard being blamed for share price woes.
Me, I take a diametrically opposite view: last month’s shorter is today’s buyer when they move to cover their short positions.
Take RMD, for example: over the 12 months to May 2014, net short positions in the stock rose by around 110m shares (out of a total number of issued shares of 1.4bn, so around 7.5% of the total issued capital).
Over the past few weeks, shorters have been net buyers of around 44m shares to close out their positions.
The result has been an 19% increase in RMD’s share price.
The point being made is that shorters ultimately become buyers of stock.
The reason I like shorters is that they play a very important role in getting overvalued shares return to their point valuation equilibrium (and often below it, which creates opportunities for discerning buyers).
Which is what happened to RMD: the short-selling of the past 12 months created a fantastic buying opportunity in RMD in the earlier part of this year.
Shorters provide a valuable price discovery service to me.
Long Live The Shorters.
Viva The Shorters, Viva!
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- Shorters should be loved, not loathed
Shorters should be loved, not loathed
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Last
$38.40 |
Change
-0.190(0.49%) |
Mkt cap ! $22.38B |
Open | High | Low | Value | Volume |
$38.40 | $38.58 | $38.30 | $19.94M | 518.4K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
2 | 906 | $38.39 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$38.49 | 313 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
2 | 13767 | 14.400 |
2 | 17668 | 14.390 |
3 | 20967 | 14.380 |
2 | 14124 | 14.370 |
4 | 21382 | 14.360 |
Price($) | Vol. | No. |
---|---|---|
14.430 | 22863 | 3 |
14.440 | 27216 | 4 |
14.450 | 46627 | 8 |
14.460 | 34563 | 7 |
14.470 | 22668 | 7 |
Last trade - 16.10pm 29/11/2024 (20 minute delay) ? |
RMD (ASX) Chart |