MORE CLARITY ON SHORT SALES.

Any allocation of goods over time involves a long side and a short side of the transaction, and there is often somebody seeking to hedge and somebody speculating.  Sometimes, John "Grumpy Economist" Cochrane notes, the short sale is actually the hedge.  "Short selling is a crucial supply mechanism. A lot of regulation is devoted to propping up stock prices, and thus hobbling short selling."  That's part of a longer essay with ample rigor and plenty of sources to study.  Tyler Cowen at Marginal Revolution also contributes.  "A very general point is that short selling is less different from “plain selling” than you might think, all the more so if you consider dynamic portfolio strategies (which can replicate just about any underlying desired net position)."

Dear reader, make sure you are able to explain what you are doing to your mother-in-law before you venture your retirement money or the cash you've set aside as a reserve for house or car repairs in one of those dynamic portfolio strategies.