Monday, March 10, 2014

I'll Go Short If You Go Long.

       Ya wanna know how to make lots of money? Short a company. Any company, well at least any company that sells it's stock on the stock market. Mostly hedge funds do it, but if you have a few bully friends, you might be able to pull it off yourself. That's what Bill Ackman the big hedge fund manager does. He just picked a company which had high priced stock and then he bet that it's stock would drop a lot. That's called shorting the stock.
        It's somewhat complicated, but Ackman managed to help his wager along by contacting his favorite Congresswoman and arrange for an investigation into that company. Then when word leaked out and the stock prices dropped, he won his billion dollar bet. You read that right a $$$Billion dollar bet. Now you have to understand it was all quite legal. He didn't have to use any bullies or thugs or anything like that. And he had the right to ask for an investigation. Anyone can, although you or I might not get an investigation on our own, but he's a multi-billionaire. You can bet he can get an investigation.
       But on a smaller level, I suppose you could bet on a local widget maker going out of business. Of course you might have to pull a few strings to shut down his supply of materials. But on that scale, it would be illegal and you could land in jail. See, it has to be on a huge scale for it to be legal. Now if you could figure out how to shut down a big time company, then it would be legal, because then you're just shorting a company.
       Boy I sure wish I had shorted on Oldsmobile or Pontiac. I wonder if I complained about Frosted Flakes having too much corn and sugar, if I could win on that bet? That's the problem I've always had. I'm not a big time hedge fund manager. I'm not even a small time hedge trimmer. But if you happen to be a big time hedge guy or gal, have at it. Just remember, I gave you the idea.

No comments:

Post a Comment