http://production.mfgovern.com/content/view/78/63/
"A common concern for many is that loaning shares to be shorted may exert downward pressure on their portfolio’s positions. However market wisdom would hold that securities lending promotes market efficiency and liquidity, and that short sellers are critical to efficient market theory. Given the long term hold strategy held by most mutual funds, this should not be a factor over time."
market wisdom is wrong...
short selling causes stock prices to go down...
efficiency and liquidity arguments are just deceptive ways of justifying the extortion of institutions to lend stock away from customers hands into those hell bent on destroying their capital..
The take away here is also funds of small stocks play dangerous games whereby they gamble whether the damage down by loaning out small stocks is offset by the incremental income... I highly doubt they win that game...
and quite frankly that same game's impact on the big funds retail brokerage arm has undue nasty impacts on customers in those accounts who hold those stocks directly...
if they were looking out for ALL their long customers interest they would not loan ANY stock out at ANY rate.
No comments:
Post a Comment