A Shorting Primer

Lots of people seem interested in betting against stocks here. My email is filled with negative people saying that the market has to come back down and they want to profit from the coming decline.

I don't see it that way. I want to buy any decline because I think that much of the selling we saw, including the panic selling, was from professionals and the professionals have been routed and are now done selling.

But let's say you want to bet against a stock. Last time I talked about how to do this, on CNBC, the next thing you know I was investigated by the government for being short a stock and bashing it. The whole thing was amazing to me because it was totally untrue. (I won't mention the stock's name because it will just start the whole shooting match up again, but I will point out that it has dropped 85% since I said it was too high.)

So, this time, I will use National Gift Wrap & Box Company as an example, so that it is perfectly clear that I am not picking on any particular company. ...