Shorting stocks: Mechanical aspects Message Board

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Strategies & Market Trends : Shorting stocks: Mechanical aspects

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To: Vol who wrote (113)	9/2/1998 9:43:00 PM
From: Banjoman	Read Replies (2) of 172

>>thanks, banjo. you have thought this through in depth. i bet days like today it really pays off. thought about buying oex puts 2 weeks ago. that is the problem, i just thought about it.... << Don't give me too much credit. Since this was an experiment, I was only short (at sale prices) about 9% of the value of my long portfolio. My long portfolio has lost roughly 20% (peak to trough), my shorts have gained roughly 20% - but that only offset 2% of the loss (net loss is about 18%). Also: it is quite clear that these mechanical short strategies don't lose as much as the high flyers in these sharp market drops. I can see that watching them day-by-day. I also have model portfolios started 8/3 for VL5xZ5 and VL1xZ1. Since 8/3 the VL5xZ5 portfolio has lost 9.2%, while the VL1xZ1 portfolio has lost 16.4% - so for the last month, the best strategy would be shorting the highest RS stocks with the best earnings growth, rather than the low RS stocks with poor fundamentals.

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