Dale Sackrider II

I enjoy the topic of macroeconomics; supply and demand dynamics, rational and irrational economic behaviors, stock markets, public economic policy, these are a few of my favorite things. I know this isn’t normal for most people but the recent GameStop drama on WallStreet has certainly captured the attention of even the most disinterested.

I’m not going to talk about the specifics of GameStop and the reddit WallStreetBets channel, since many others have covered that in detail. I want instead to talk about Short Selling in general and why I think it is an immoral practice.

The short sell is when an investor (I do not like that term in this context but I lack a better one at the moment), borrows shares of a company they believe to be overvalued. Those shares are immediately sold at the current market value and then at a later date, the investor buys back shares (presumably at a lower price) to repay the shares they borrowed. The difference in price between when the share was borrowed and when it was repaid is the profit or loss for the investor. It’s more complicated in practice than my explanation here but you get the idea.

Many people will tell you the issue with shorting a stock is the potential losses are limitless. If you invest $1000 in a stock and it goes to zero (the lowest possible value for a stock), you’ve lost $1000. If you short a stock at $1000 and it goes to the floor, you made $1000, BUT if it goes up instead of down – there isn’t a ceiling like there is a floor price. That is an additional risk to shorting a stock, however that isn’t my issue with shorting as a practice.

When you invest in a company, you are buying ownership. You want the company you invest in to be successful. And you have ‘skin in the game’ when you own the stock of that company. If they do poorly, so do your shares. In some cases, shares even give you a voice in how the company is run through things like voting rights for board members. Your profits are made when the company is successful.

Shorting a company isn’t investing. You are not vested in the companies success, you are rooting for its failure. Your profits are made when the company fails in some way. The motivations are malevolent by nature and that is why I consider the short selling practice to be immoral. So then, the next question is what if anything are we to do about the practice?

Straight upfront here, I’m a libertarian and believe people should be free from regulation so long as they aren’t initiating violence on others. This means I often hold the position that a thing should be legalized/decriminalized even though I personally find the thing to be immoral. This is most often seen in the area of hate speech, but that’s off topic here.

The point is, my worldview would lean towards doing nothing to stop the short sellers. But I think there is more here to consider. The stock market is rightly a heavily regulated market. The manipulation of stock value can hurt a lot of people for the profit of others. Investing in a company is a valuable practice but betting against a company is something I believe is better suited for Vegas than Wall Street. I don’t think betting against a company should be illegal, but doing it on Wall Street and calling it investing is misrepresenting the actual thing being done.

My position currently is that we (through public policy) should ban short selling as a stock market practice. The recent short squeeze by the wallstreetbets community made the practice of short selling expensive for those who do it – but it didn’t stop the market we’ve created for this practice. My position could change with more information, but based on my understanding today, I do believe we should eliminate the short from Wall Street.

You make it sound easy!

That’s what a co-worker said to me yesterday. Immediately I knew something was off about that statement because what I was suggesting was in fact a very difficult task. After I thought about it for a bit, I realized what my co-worker was saying is that while the task was easy to understand, actually accomplishing the task was going to be a challenge and my framing of the task seemed to ignore the challenge in favor of the clear understanding of what needed to be done.

An example task would be the successful completion of a marathon run. Get a running plan and follow it. That’s easy enough, right? Of course we intuitively understand that the execution of that plan isn’t “easy”.

I work for an international company and many of my colleagues speak english as a second language, most speak english very well in fact. Still, little turns of phrase can be lost in translation (especially humor). I read a book years ago titled Studies in Words by CS Lewis (yup, same author of the children book The Lion, The Witch, and the Wardrobe). In it Lewis points out the precision rightly chosen words can provide and the value of making those choices.

In my career, I deal with terminology unique to my field. I often work to establish the nomenclature required to create new terms, and the semantics required to give those terms specific meaning in the company, giving the company a common lexicon. Why does that matter? Because Peter Drucker was right when he famously stated, “Culture eats strategy for breakfast”, and culture is fueled by a common language, a common understanding, and common experience.

I’ve wanted to address the topics of language and culture before but because of their importance, I hesitate knowing I can not give the subject the attention it requires. This post is more a placeholder – a passing thought in a much larger topic.

P.S. Originally I was going to refer to my co-worker as a colleague, but because I can’t spell to save my life, I googled colleague and found there is a salient difference between the two terms. Words matter and my conversation was not with a peer (colleague) but with a co-worker (in this case a subordinate). So my substitution of the easier to spell word co-worker was not as much of an Elmer Fudd moment as it set out to be.

I’m reading “Start with Why” by Simon Sinek. Ever since I heard his Ted Talk with the same title, I’ve considered my “why”.

For over a year, I would have said what motivates me is Mark 12:31’s “Love your neighbor as yourself”, but that’s not quite right. People use the same scripture to justify policies and actions I find offensive.

I’m currently exploring the concept of human dignity – the idea that everyone has inherent value. Scripture also speaks to this concept stating we are made in God’s image. James 3:9-12 suggests that loving God while cursing men is a contradiction based on this idea.

Human Dignity, for me, provides a natural right for every human to express their value in meaningful ways. In my career, it drives me to connect employees with work that enables that expression. In my politics, it drives me to align with policies that enables the same thing – realization of our inherent value.

But there is a flaw in this too; a dangerous emphasis on the economic value we achieve. People should not define their worth based on the economic value of their talents and skills. You are not your job and your worth is independent from your paycheck. People have intrinsic value founded in their humanity.

So how do I define my “why”? I don’t think I can reduce my core belief to a ‘tweet’. You have unique value because you are human. You have the right to express your uniqueness in meaningful ways. In my career, I’ve been very fortunate to find ways to express my talents and it just so happens that I’ve been able to use my talents to enable others to connect their talent to relevant work.

I think its enough to say that I believe you are important and unique and if during the course of my daily work, I can help people express their unique selves in meaningful ways, then I have accomplished something important.