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Robert Schuessler
Traders Magazine Online News

A Smarter Monkey

In this contributed piece, TIM noted that some traders do better than others when using data that has been run through certain analysis - that is, have used some form of machine learning to assist them.

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In his first public speech, SEC Chair Jay Clayton deviated from his prepared remarks and offered his own "off the cuff" comments on market issues. Do you like this change of pace?




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January 1, 2003

The Crazy World of Short Selling

By Source: The StreetSmart Guide to Short Selling by Tom Taulli (McGraw-Hill, 2002)

Short selling has been a mystery for many investors and traders.

Perhaps that's one reason why the general public thinks it is basically immoral. After all, short sellers are making money from disaster, right?

Here's a look back at some of the interesting stories of short selling:

* Napoleon outlawed short selling because he believed it hampered his ability to finance his empire building. (He termed the practice "treason").

* In the late 1880s, the president of American Steel and Wire Company, John Gates, would cut back production and lay-off people and then short the stock.

* Jesse Livermore shorted Union Pacific Railroad several months before the San Francisco earthquake of 1907.

* Bernard Baruch, who advised several US presidents, made his fortune by short selling. He even wrote a book defending the practice - but did not disclose to the public that he was the author.

* Albert Wiggin, the CEO of Chase National Bank, shorted his company stock before the crash of 1929. He netted $4 million on the trade and the bank reimbursed him for the taxes.

Source: The StreetSmart Guide to Short Selling by Tom Taulli

(McGraw-Hill, 2002)