David,
I might be a little too harsh on you. But I really don't believe that investors gamble their $$$ on an issue simply to take an challenge. I think that most of the DELL shorters believe that this is a too good opportunity to pass on. DELL looks too obviously like a great short candidate because of the high premium it commands.
However, my take is that when the market sentiment is so negative, investors will flock to those best run companies (MSFT, DELL, LU, CSCO, to name a few) and reward those with clear earning visibility with a premium PE. I don't think that this is healthy at all. But I don't want to buck the trend of the market. DELL has proven again and again that it's in another league that separates it from the likes of CPQ, IBM, GTW, HWP. Since it's growing at 6 times the average of its sector, I will certainly grant it with a much greater PE than its rivals.
I was mainly joking LT. However, I seriously believe that 99.999999% of the investors won't think dreaming of DELL dropping to single digits. I was comparing LT with xxx only in that both LT and xxx have such imagination that no one can understand them. Anyway, my apology to Mr. LT.
I have noticed several times that you are too addicted to TA. Well, in classrooms of several of the most famous business schools in the US, professors are taunting loudly about it because they believe that TA is virtually useless in the current market. Okay, that's another story we can argue later.
$$ sure matters in investment. The biggest guru in SI bear board seems to be playing with 8 or 9 figures. And when one has such deep pocket, he or she can basically claims victory over any trade. This is like playing blackjack. All you need to do is average up whenever a bet goes against you. Sure the bj table sets upside limit for a single bet, and that's why people keep losing money to the dealers. In stock market, your pocket is your limit. And that's why you see the famous guru heavily shorted AMZN at 30 (split adjusted), and then averaged up at 76 (according to his post), and again at 90, and...later triumphantly claimed that he was going to take the profit off the table when the issue dipped to 102. And ...that guru was willing to average up on AMZN until 400. My concern is that how many investors can play that kind of game? Certainly not you or I (maybe I am too conservative and underestimating your buying power), but if you had that deep pocket, you could certainly have averaged up your DELL short positions all the way up to four digits, and when the issue retreated by 10%, you could claim victory for your short position. You would not lose on any position even if you were long on BOST.
That's why I am so concerned about my buying power. After hearing so many earnest followers of that guru complaining that they nearly went bankruptcy, I finally realized that I myself is in a totally different scale and what takes to be an perpetual winner!...Money indeed matters.:)
good luck,
larry! |
