Mark, you must have the patience of Job.
Patience is a nice way of putting it, although slow has probably been used more often. <g> I felt safe with TSS because of the peculiar relationship between them and Synovus. I haven't run the numbers recently (and I probably should) but I don't see how a buyout or anything like that could happen. My only real risk (other than my analysis being wrong) is having the shares called away, and that seems pretty unlikely.
I've had a few multi-year shorts, almost all of them secure large caps. For example, my second longest was Gillette, which I shorted on 10/9/97 and again on 2/18/98. I covered on 3/9/00. Paying the dividend for all that time was annoying, but I still made a nice profit. In general, my mistake has been in covering too soon on these types of shorts. I've only been hurt once by holding on to a long term short. That was CD Radio, and I should have recognized the dangers on that one, the situation was way too open ended. I think my analysis was essentially right, but I made a stupid assumption, that the bull market couldn't last the two to three years they needed to get their financing done. I took a 67% loss on it, and I'm thankful I bailed when I did. I'm still watching it closely, but fortunately I'm on the sidelines.
Long term shorting, besides being an oxymoron, is probably not an optimal approach. Since the upside is limited, it doesn't take too many years before your returns become quite unspectacular even if you make a decent profit. But it suits my style, and I short mostly for the educational value and to leverage capital that would otherwise be doing nothing. |
