May 11, 2009
In the name of integrity, common sense, logic and the true spirit of capitalism, I beseech you to reinstate the uptick rule (and enforce the laws already in place against "naked" shorting). Though I am not someone of Jim Cramer and Eric Oberg's expertise or eloquence, I can argue competently from the standpoint of the individual investor/trader (one who has gone both long and short)--who is the backbone of this great nation's financial markets--and, correct me if I am wrong, the very type of citizen for which your organization was formed and sworn to protect.
My three points are thus:
1. Arguments postulating the uptick rule won't matter because stocks trade in penny increments are bogus the new rule could easily be adjusted to compensate for this.
2. Arguments postulating the uptick rule is "unfair" because we have no "downtick rule" for longs, or that it is against the spirit of capitalism also have no grounding in logic. None at all. Capitalism is the process and philosophy of RAISING capital, NOT its destruction. It's goal is to INCREASE capital, not lessen it. The short sellers have a right to raise capital for themselves, but NOT at the expense of investors, nor at the expense of the nation. Check the Constitution and you will find implied the notion that the "majority rules." When we elect a President, we choose the one with the most votes. Same applies here. Most investors--and traders--are long the market so the greater the capital raised, the more wealth grown over the widest swath of the population, the better our economy and country become. Simple as that. You can allow for the (legal) raising-capital-by-destroying-others' capital for the minority in our free society, but Common Sense, the law of majority rule, and the mission of the SEC ITSELF all FAVOR the raising of capital. And that is what the uptick rule does, by protecting the majority that are long the market.
3. According to YOUR OWN web site:
"The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation." Reinstating the uptick rule supports all of those goals. Literally. So why would you protect and favor those whose mission is to destroy the capital of the majority?
I know there is the possibility of "moral hazard" in reinstating the uptick rule that the SEC will appear to have made a mistake. Let me point out that the SEC is composed of human beings, and every human being makes mistakes. That is how we LEARN. Think about it: when you learned to ride a bicycle, you learned more when you fell. You learned what you did wrong so you could do it correctly. The same applies to tests throughout school--you learn from the analyzing the questions you got wrong, not correct. So I ask you to learn from the mistakes of your predecessors. Furthermore, by altering the details of the rule, it will show you gave the issue great analysis and consideration to make an improvement (rather than admit a mistake, if that is politically incorrect). We Americans love "new and improved", so you can take that tactic without any backlash. The positives fully outweigh the negatives.
In closing, thank you for taking the time to read all these pleas and consider the feelings and views of average American investors and traders in addition to the experts and institutions. Please do the right thing by reinstating the uptick rule and enforcing the rules against naked short-selling...and, more importantly, show the nation that the SEC still exists to protect investors--those who raise capital in orderly markets.