Shorting BS

[barrett]

Have you ever seen an asset price and thought 'that is just total BS'?

In late Sept 2001 I had to transfer through Buenos Aires airport on a work trip. After buying a snack at an airport cafe, I was glad I'd asked for a receipt..my coffee and biscuit had come to twenty bucks Australian! (US$12 at the time). You might pay that these days in a major European airport, but in a South American economy in recession, seven years ago.... it was bizarre enough for me to keep a copy of the receipt as a curiosity.

Being so soon after September 11th, we were stranded for five hours, and looked at getting a cab to the city. Even though we could see across to Buenos Aires, a fare was going to cost the equivalent of US$60, or A$100. By that time I knew something was seriously wrong.. Argentina wasn't worth that much!!

A few months later, in January of 2002, Argentina's currency crashed, and after 6 months the peso had fallen in value by 75%. The government had persisted with a BS unsustainable 1 peso=1 USD peg for years, and as their solvency began to be questioned, peso holders dumped spectacularly. Carrying out the currency trade may not have been straightforward at the time - but simply buying a coffee and applying a bit of common sense had led to a pretty powerful conclusion.

What about Iceland - the most expensive country in the world.... huh? Trawling flogged out fisheries and bus a few fat poms around the geysers, and all of a sudden you've got some of the highest per capita incomes in the world? Doesn't make sense really does it. And then the reality check..... Icelandic Kronur down 57% since last June.

BS should be fairly obvious because even though everyone accepts it, it just doesn't make any sense. Does anyone see any standout candidates today?
Cheers

(if it took the form of a low price, obviously 'short the bs' by going long...)

 

[Miner]

Hypothetically if I buy and sell a share same day does it call shorting or is it legal ?

Can some one please give me some education on it and pit falls.

Can it be really done ?

Regards

 

[tech/a]

Hypothetically if I buy and sell a share same day does it call shorting or is it legal ?

Can some one please give me some education on it and pit falls.

Can it be really done ?

Regards

Barrett.
You have me thinking but nothing comes straight to mind.
Havent been travelling much this year.
China and asian anomolies would be interesting.

Miner.

Shorting is selling a stock you dont own with the intention of buying it back later at a lower price to return the stock to the owner and you pocket the difference.

Holding a stock for a short time isnt shorting---if I got your drift.

 

[cuttlefish]

Well for me, the US economy is in the worst state its ever been, they have hudrends of thousands of home defaults a month, every investment bank has either failed or had to have some sort of government assistance, a few major banks have been quietly absorbed by the stronger ones with government assistance, some of their largest financial institutions, Fannie, Freddie and AIG have had to be bailed out and continue to require ongoing funding (third time around for AIG recently), their automotive industry - one of the countries largest employers, is on the brink of collapse. Their largest electronics retailer has reported bad news. They have debt levels that are astronomic and have had to pump the largest amount of money ever into their system just to keep it alive. Banks are borrowing hundreds of billions a week from the fed discount window just to keep the system ticking over without total collapse.

Yet the USD has been rising.


Sounds like a possible candidate to me.

 

[skc]

Have you ever seen an asset price and thought 'that is just total BS'?

Most items on the TV program "Antique roadshow" - Always wondered who in the UK pay thousands of pounds for a faded painting the size of a toilet paper? It's tulip maniac on TV to me.

 

[shaunQ]

I know this isn't probably exactly what you mean, but yesterday I was walking through a shopping centre and looked at one of those cafes in the middle court area.. which was empty..

In the window was a scone, for $3.50. A single scone! I know I sound like an old man saying, in my day, I would have got 3 scones and a coffee for that, but it just seemed ridiculous.

It was only 5 or 6 years ago the most expensive ice cream was $2, now its almost $4.

It will be interesting if these charges come down with the economy, at least in real-terms over the next few years.

 

[joeyr46]

Well for me, the US economy is in the worst state its ever been, they have hudrends of thousands of home defaults a month, every investment bank has either failed or had to have some sort of government assistance, a few major banks have been quietly absorbed by the stronger ones with government assistance, some of their largest financial institutions, Fannie, Freddie and AIG have had to be bailed out and continue to require ongoing funding (third time around for AIG recently), their automotive industry - one of the countries largest employers, is on the brink of collapse. Their largest electronics retailer has reported bad news. They have debt levels that are astronomic and have had to pump the largest amount of money ever into their system just to keep it alive. Banks are borrowing hundreds of billions a week from the fed discount window just to keep the system ticking over without total collapse.

Yet the USD has been rising.


Sounds like a possible candidate to me.

Or just plain old deflation were cash is king