"Spivs and speculators"
Despite the opprobrium dumped on them by Alex Salmond, I've previous described the short-sellers as gamblers, and pointed out that they can only be gambling on the price of a share falling if others are gambling on the price of a share not falling.
It is with a smug, self-satisfied look upon my face that I read the headline: "Hedge funds make £18bn loss on VW", and the suggestion that some hedge funds might go bust as a result.
The higher the return, the higher the risk; and sometimes it goes wrong.
The BBC explains the convoluted dealings that caused the hedge funds to get burned, and Porsche to make a huge profit....
It is with a smug, self-satisfied look upon my face that I read the headline: "Hedge funds make £18bn loss on VW", and the suggestion that some hedge funds might go bust as a result.
The higher the return, the higher the risk; and sometimes it goes wrong.
The BBC explains the convoluted dealings that caused the hedge funds to get burned, and Porsche to make a huge profit....
What is upsetting the hedge funds is that if between 10% and 15% of VW shares were on loan to be shorted and only just over 5% were available in the market, it is likely that many of the funds that shorted VW had borrowed the shares from Porsche.It meant that because Porsche had not declared the proportion of VW shares it controlled, traders may have been indirectly and inadvertently borrowing shares from Porsche, selling them to Porsche, buying them back from Porsche and then returning them to Porsche.
Greed meant they overlooked the basic principle of caveat emptor, and I don't think anyone will be shedding tears for them.
6 comments:
I wonder how Oppenheim is fairing through all this ?
I'm not shedding tears for them, but...short-selling plays an important part in the market. If it's not allowed optimists dominate and stocks become overpriced, leading to bubbles. Short selling is an important mechanism for setting the true price. Had the market had all the information about Porsche's position in VW the seemingly overpriced VW stock would not have looked as wrong as it did and they wouldn't have gone in so heavily.
word is AIDA capital ie Mr Oppenheim is in the brown stuff
Is the brown stuff peat or the sh#t?!
Can't think of anyone more deserving of being thrown head first into either substance, and then buried.
The grotesque way in which he has manipulated and deceived the Lochs community is surpassed only by the behaviour of his grovelling lackeys, Mcdowall, Macdonald and co, who have executed a stirling reinvention of the tacsmen. Throw them all in.
BTW when will Mcdowalls be in the bankruptcy courts or have they managed to escape that fate?
No more fancy week ends at Eishken for Fat Annie & Co then.
Post a Comment