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jgspitz wrote:
Please help. Why would anyone SHORT Trump and hold that position for TWO YEARS. I thought a short was supposed to be for a few months. A nice profit has been made. Obviously, there is more to the picture than this newbie can see. Anyone?

I can fully understand your asking this. I query the idea of keeping it running myself. I think that the reasoning is that the Fools want to teach us about how to short properly, and Trump has been a successful short. There is no time limit on a short if it has gone down, the problem is if it rises, as the broker wants you to make up the difference and therefore puts pressure on you to sell to hold the losses at a set level.

I myself am fundamentally opposed to shorts. The potential gains are limited and the potential losses unlimited. I prefer to be in the opposite position, knowing that at most I can only lose my initial stake.

The reason that they are still holding it is that they can see it falling further. But some considerations:
1)It has lost about 40% in 2 years, so unless it goes to zero in less than 3, the rate of return is diminished.
2)There is always the (admittedly small) risk that returns could be lowered, e.g. by major (and I do mean MAJOR) restructuring of the debt, or possibly a buyout. They're not likely, but still possible.
3)Wouldn't it be better to find another stock to short, so that we can see the reasoning and results of their methods in real time. I don't plan to short ever, but it would be interesting to learn more about the psychology and methodology of that style of investing.

No doubt one of the Fools will be along shortly to correct me, but I'm always happy to learn.

angussb.

Think long, buy LONG, hold long.
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