ELOGIO DEL RIBASSISTA - gzibordi
By: GZ on Venerdì 08 Febbraio 2002 11:23
Jim Chanos, il famoso speculatore allo scoperto che da 20 anni
gestisce un fondo solo ribassista è diventato un eroe per avere speculato contro Enron da inizio anno.
E' stato invitato dal parlamento a testimoniare come aveva
fatto a capire che Enron era nei guai, ha avuto la copertina di Barron's,
è stato celebrato dal Wall Street Journal
"....Jim Chanos may prove to be this cycle's Abby Joseph Cohen......"
(cioè che come una volta c'era Abby Joseph Cohen di Goldman come simbolo del mercato, ora c'è Chanos)
In pratica Chanos ha guadagnato miliardi speculando al ribasso e invece di essere visto con antipatia viene anche celebrato.
Il Wall Street Journal addirittura scomoda la teoria finanziaria per dire
che non ci possono essere mercati efficienti senza gente che specula al ribasso
---------------- DAL WSJ DI IERI ------------------------------------------
Short-Sellers Keep the Market Honest
By SUSAN LEE
One of the weirdest fall-outs from the Enron, Kmart and Global Crossing debacles is the elevation of short sellers from despised cult to revered wise people. In fact, one of the early short sellers of Enron, Jim Chanos, is now to accounting practices what Hamid Karzai is to fashion -- hot, hot, hot! But this burst of good will aside, finance economists have always accorded short selling a top place in the workings of efficient markets.
THE DISMAL SCIENCE
Typically, the impulse to short a stock rests on a sort of Gnostic insight that the stock is overpriced -- either management has cooked the company's books or investors are benightedly enthusiastic. So moved, a short seller will borrow stock of the target company and then sell it. The idea is to wait until the price drops and then go back into the market to purchase the stock at its lower price to return to the lender. Profit consists in the spread between the price at which the borrowed stock is sold and the price at which it's bought back.
But whatever the impulse, short sellers are essential to making stock-market pricing more accurate. The efficient-market theory (and it's just a theory, not a doctrine) says that stock prices must reflect all available information about the future. It's really a form of informational efficiency and short sellers provide important information. Thus, if the market lacks the pessimistic input of short sellers, prices will be pushed above the "efficient" or consensus price.
If there are, for example, 10 investors and each holds a different opinion about a stock, then the price will end up in the consensus middle. If the first investor, an extreme pessimist, thinks the price should be $1, and the tenth investor, an extreme optimist, thinks the stock is worth $10, and the rest of the investors fall neatly in between $1 and $10, then the market price settles at $5. But if pessimistic investors one through five do not act, then optimistic investors six through ten will set the price at $8. Simply put, although the market price reflects all available information, it is only the information conveyed by optimists.
Short sellers are important pessimists. Especially since the market has a strong bias to optimism. Most investors are bullish. And why not -- the point of investing is to share in a company's success. Stock analysts and sell-side brokers are also fiercely (perhaps mindlessly) bullish -- their livelihood depends on their enthusiasm. So, too, index funds must hold certain stocks and hold them without an opinion about whether they are good or bad buys.
There are also legal and institutional constraints. Many large funds cannot take short positions because of fiduciary requirements. Many just don't want to. As a recent study demonstrates, only 30% of all mutual funds are allowed to sell short and only 2% do. The act of short selling itself is also constrained: Sometimes it is difficult to find shares to borrow and borrowed shares can be recalled at the lenders' whim.
One interesting theory holds that restrictions on short selling lead to market crashes. If only optimists are pricing stocks and negative information is hidden from the market, then shares are overpriced and optimists don't know what pessimists think. When those optimists become a touch less positive, they sell and the price drops. The market will search for a reason for the droop and pessimists will step forward to explain why the stock is a dog. As optimists learn the opinions of pessimists, they start to bail out in earnest and the stock can crash with little or no fundamental news.
By itself, short selling is a risky proposition. Essentially, shorts are betting against the history of the equity market, which goes up more than it goes down. Moreover, in a long position the greatest danger is that the stock price will fall to zero, making the loss known and bounded; in a short position, however, the greatest danger is that the stock could rise forever, making the loss -- at least theoretically -- unknown and not bounded.
There is also the malign possibility of a short squeeze when predatory investors think the shorts are vulnerable. They talk up a stock and, as its price rises, shorts must put up more collateral or buy the borrowed stock and close out their positions which, in turn, pushes prices even higher.
But short selling can also be a dandy way to reduce risk. When short selling is combined with long positions, risk is hedged. For example, the Enron employees who invested in Enron's stock in their 401(k)s were long Enron but could have hedged that position by shorting Enron outside the plan.
For a nifty look at what the world would be like without short selling, consider the example told by finance professor Owen Lamont at the University of Chicago. On March 2, 2000, 3Com spun off 5% of its subsidiary Palm (yes, the company that makes the Palm Pilot) and announced that it would eventually spin off its remaining shares, giving investors roughly 1.5 Palm shares for every one share of 3Com. Simple arithmetic would dictate that the price of 3Com should have been at least 1.5 times the price of Palm, or $143. On the date of the IPO, shares of Palm were valued at $95 but shares of 3Com -- which had retained 95% of Palm and had other assets -- closed at $82, meaning that its "stub value" was a negative $61 a share.
An impossible situation, but one creating an obviously delicious opportunity to short Palm and go long 3Com. This arbitrage failed to materialize, however, since there were very few shares available to short. This blatant mispricing continued for months.
In short (so to speak) short selling generates more accurate pricing and promotes risk sharing and more liquid markets. No matter, though; as the history of finance shows, short sellers are a handy target for blame when stock prices crater. The current infatuation with the shorts won't last and Jim Chanos may prove to be this cycle's Abby Joseph Cohen.