Short sellers unfairly criticised.

Financial News, May, 2002

Byline: Niki Natarajan

Short sellers have long been the equity market's cartoon villains, blamed for heartlessly profiting from - and compounding - every market crisis. So during the market turmoil that followed last year's terrorist attacks in the US, the evil shorts would have been expected to stampede into the market, selling everything in sight. Against common belief, this turns out not to have been the case. Astec Consulting, a New York institutional research firm, has been compiling statistical evidence on the impact of short selling on equity prices for some time.

The results form part of research undertaken by Astec on behalf of JP Morgan Chase, which commissioned it to investigate whether short selling had any effect on stock price direction,...

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