What is fear mongering? It is the action of deliberately arousing public fear or alarm about a particular issue. The party initiatiting the fear campaign seeks to take advantage of those who are naive enough to believe and act on their unchecked emotions at their own expense. Short sellers sell shares short hoping they can pick them up later for almost free so when the time to cover their short positions comes the leeches start spreading rumours of imminent bankruptcy and troubles ahead to convince shareholders to sell the shares that they covet. The shareholders loss is their gain so like any snake oil salesman they want to instill urgency and rush you into panic selling. You need to act now they say. Investing is about more than just a few quarters but time is against them so their unsolicited and free consulting advice for the clothing store is to only sell winter coats at the hottest time of summer.
Remember the story of the fox trying to convince the crow to sing to eat his cheese?
Short story: A crow has cheese a fox wants. The fox asks the crow to sing. It does and drops the cheese.
« Thank you » said Master Fox sweetly, as he walked off. “Though it is broken, you have a voice sure enough. But where are your wits?”
Moral
Short sellers live at the expense of those who will listen to them. If you want to keep your cheese, do no trust strangers giving you free and unsolicited advice.
Long story: One bright morning as the Fox was following his sharp nose through the wood in search of a bite to eat, he saw a Crow on the limb of a tree overhead. This was by no means the first Crow the Fox had ever seen. What caught his attention this time and made him stop for a second look, was that the lucky Crow held a bit of cheese in her beak.
“No need to search any farther,” thought sly Master Fox. “Here is a dainty bite for my breakfast.”
Up he trotted to the foot of the tree in which the Crow was sitting, and looking up admiringly, he cried, “Good-morning, beautiful creature!”
The Crow, her head cocked on one side, watched the Fox suspiciously. But she kept her beak tightly closed on the cheese and did not return his greeting.
“What a charming creature she is!” said the Fox. “How her feathers shine! What a beautiful form and what splendid wings! Such a wonderful Bird should have a very lovely voice, since everything else about her is so perfect. Could she sing just one song, I know I should hail her Queen of Birds.”
Listening to these flattering words, the Crow forgot all her suspicion, and also her breakfast. She wanted very much to be called Queen of Birds.
So she opened her beak wide to utter her loudest caw, and down fell the cheese straight into the Fox’s open mouth.
“Thank you,” said Master Fox sweetly, as he walked off. “Though it is cracked, you have a voice sure enough. But where are your wits?”
Moral
Short sellers live at the expense of those who will listen to their interested fear mongering. If you want to keep your cheese or whatever it is you value do no trust strangers giving you free advice.