Shorting is the best mechanism for exposing scams and frauds in public markets, in fact that’s really the only reason it exists.
It’s an incentive for people to root out corruption and graft. If you truly believe that SpaceX is a big scam and it’s not actually worth enough to be in the S&P 500, then taking a short position not only will net you a bundle of cash, it will do the public a service by helping to expose a fraud and prevent future companies from doing the same thing.
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Shorting is the best mechanism for exposing scams and frauds in public markets, in fact that’s really the only reason it exists.
It’s an incentive for people to root out corruption and graft. If you truly believe that SpaceX is a big scam and it’s not actually worth enough to be in the S&P 500, then taking a short position not only will net you a bundle of cash, it will do the public a service by helping to expose a fraud and prevent future companies from doing the same thing.
Again, not everyone responds to a perceived social ill by gambling. Timing a short is still gambling.
That societal benefit is mostly worthless to investors.
Investors need to capture a good return (risk adjusted) to have any incentive to expose frauds or scams.