Years ago we heard about the concept of selling short when investing in the stock market. The idea that if you buy a stock when it is down – temporarily...for whatever reason – you can make a killing when that same stock returns to its normal high price and you sell it off immediately upon it regaining the previous high price.
So as an example: I take $10,000 to my local broker and ask her to buy 100 shares of Fly-By-Night Airlines for $55 a share. She cautions me because Fly-By-Night Airlines has not been performing well recently, in fact, they have just lost $55 a share, and she doesn’t want me to waste my money. I tell her that I appreciate her advice, but I’d like to go ahead and buy that stock. I spend $5,500 for 100 shares of Fly-By-Night Airlines.
The next day, Fly-By-Night Airlines announces their new concept for efficiency, and their stock climbs past their previous high, all the way to $120 a share. My $5,500 investment is now worth $12,000. If I were to sell now, I would make a quick $6,500! Wow! How neat was that?
Of course, not everybody has a friend who knows what is going to happen to a specific stock on a specific day. Otherwise, we’d all be rich; at least, richer than before. But what if we know – in advance – that a certain stock is going to take a massive hit, only to bounce back later that same day, or the next day at the latest?
Now let’s take this one step farther: What if we have knowledge that a person we know is going to cause a certain stock to take a massive hit, only to recover the same day, or the next day at the latest? If we take that knowledge to our friendly neighborhood stock brokers, or use our electronic on-line brokerage to take advantage of this fore-knowledge, we can truly become overnight millionaires.
For our next example, what if the airplane manufacturer, in this case a real company – Boeing – is doing quite well, with orders in place for hundreds of their latest models. The orders are coming from various companies and nations around the globe.
On Tuesday – pick a week – the President-elect of the United States of America makes a statement to the press, denigrating Boeing’s management and the quality of their products. By Tuesday afternoon, Boeing has lost 10% of its stock’s value which, in their case, is a huge sum of money. However, the next day, that same President-elect changes his mind, and apologizes to Boing. All’s forgiven, and Boeing’s stock recovers nicely, thank you very much.
What the public doesn’t know, because the media is too narrow-focused to point out, is this: During the gap between their huge loss of value and their regaining the high stock value, friends and family members of that President-elect have all made a killing, buying Boeing’s stock when it went down, just to sell it again after it has recovered. Okay, so that’s really only peanuts to these so-called Billionaires, these high-rollers.
Within the following week, this little trick is repeated with Lockheed Martin, when the President-elect denigrates the quality of the product and the need for such a highly advanced multi-role fighter jet. And as before, Lockheed Martin’s stock lost a huge amount in value, but was followed the next day by an almost instant recovery. And as before, those same billionaire friends and family members of the President-elect dipped their toes in the stock market to make themselves a quick fortune.
What is as bad as the felonious operations described above is the absolute silence by the news media regarding this stock market rip-off by Trump and his family and friends, so that he and his friends can boost their bank accounts. It is fascinating how much this parallels the way the Oligarchs in Russia have gotten super wealthy. The main difference is that in Russia those in power – Putin’s inner circle – have not only used the stock market to become super rich, they have also ended up owning those companies that they have ruined, so that when the companies regain their true worth they do so under new ownership!
They could never do this with Hillary Clinton as President. Not in a million years.