Note 40 — Chapter III · THE BEAR AND SHORT SELLING

Despite the effort to avoid technical terms in these pages, the value of the bear should be considered from still another angle. Smith, a bear, sells short to Jones, a bull. The economic usefulness of Jones then becomes problematical, since he may sell out at any moment. His permanence as a holder or owner is merely optional, and his usefulness in the economic scheme of things is impaired. As a market factor he may be ignored. But there is nothing optional about Smith’s position, for he is now a compulsory buyer; his economic status is fixed; he has become a very real potential force.