Short Sellers Are Not The Bad Guys

Aug. 04, 2014 3:58 PM ET65 Comments
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Quoth the Raven
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Summary

  • Short sellers are an integral part of the markets.
  • They raise questions about frauds, help the market recognize overvalued and risk-laden companies, and create sales for buyers.
  • The market is Darwinist; only the foolish will ignore the methods used to profit from when their due diligence tells them an equity or the macro markets will decline.

Seeking Alpha founder and CEO, David Jackson, published a great piece last week talking about short sellers and Seeking Alpha. His piece, which you can read here, went into detail about why Seeking Alpha allows pseudonyms and why they allow short sellers to publish multiple articles on the same topic.

The reason, in theory, is actually really simple: despite what millions of anti-short investors tell you, there's no difference between short sellers publishing 100 articles on an equity claiming it's a short than long investors publishing 100 articles on an equity claiming it's going to rise in value.

It's as if when you're not touting or talking up buying a name, you're expected to simply shut up about it. Short sellers that write on Seeking Alpha often get comments like, "if you didn't have anything good to say about (horrible equity), why even take the time to publish this piece filled with half-truths and lies?"

Statements like that are par for the course.

Except, most of the time - barring examples that you could also find on the long side - they're not half-truths, nor are they lies. In the case of extremely well respected short sellers like Citron Research, the Geo Team, and Muddy Waters, the due diligence done before publishing something is usually worlds beyond what most people put into their long analyses of companies. Now, scroll down to the comments of this very article to see what I meant.

There will likely be zero people eager to point out that since 2001, more than 50 companies covered by Citron Research have become targets of regulatory interventions. Here's a small taste of what someone like Mr. Left has done to tidy up areas of the market that the SEC simply doesn't have time to police 24/7.

(Source wikipedia -

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This page and all of its contributor content is operated by Quoth the Raven Research, LLC. Please read this disclaimer first and foremost: https://quoththeravenresearch.com/disclaimerterms-of-service/ Quoth the Raven is Christopher Irons from Philadelphia, PA. Commentary by QTR has been featured in Barron's, the Wall Street Journal, Financial Times, Yahoo Finance, Reuters, Bloomberg and many other financial outlets. QTR is a speaker at numerous financial conferences annually. QTR was named to Benzinga's "10 Financial Twitter Names to Follow in 2018" and in late 2017 was named to Forbes' "Top 100 Twitter Accounts for Finance". In 2016, QTR's work was selected as a finalist for the Sohn Investment Conference Idea Contest. In 2014, he was named to Seeking Alpha's Top List of Best Performing Financial Bloggers and was TipRanks' #6 Performing Financial Blogger (Out of 4,000+). View QTR's track record on TipRanks: https://www.tipranks.com/bloggers/quoth-the-raven View QTR's website: http://www.quoththeravenresearch.com View QTR's Twitter: https://twitter.com/QTRResearch Listen to the QTR podcast: http://quoththeraven.podbean.com All content contained herein is bound to both Seeking Alpha's terms of service, as well as the terms of service found here: https://quoththeravenresearch.com/disclaimerterms-of-service/

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