I attended the 6th Global Corporate Governance Conference organized by SIAS at Raffles City today. One topic which stuck with me was the debate on the role of shareholder activism in the financial markets, and more specifically the recent spate of short selling reports by anonymous individuals. I think there’s a general unease with short selling among most people. After all, no one likes to hear bad news. Especially not of companies they own. And yet, short sellers play an important role in the market. They temper the exuberance that can get out of hand. They are the naysayers that keep us sceptical when we should be. After all, there is no shortage of optimism in the markets, with an overwhelming number of brokerage recommendations leaning on the positive. History is replete with instances of what Greenspan would call “irrational exuberance”. They happen far more ......