With regard to shorting AAPL.
Irish King;
Um ... sir, it's your money and I understand (from your posts on another thread) that you're fairly new to short-selling (though agressive.)
I wont try to argue you out of your opinion on AAPL -- its still a speculative investment (even if AAPL plays all their cards right) for the most optimistic and a difficult hold in this mother of bull markets -- but I suggest caution.
I once owned a stock that was being attacked by some pretty nasty short sellers -- the company was misrepresenting its finances and underwriting analysts were putting out totally unrealistic earnings projections. They were right and I lost money.
I thereafter read a book on short selling "When Stocks Crash Nicely" (Loaned book out, can't remember the author.) Scary, lonely stuff fighting the crowd. And things could turn out wrong even if the SS has his facts right. And you'd better have the strongest of stomachs. This is no area to dabble. Remember, you have unlimited potential for loss. (FYI, I'm *very* respectful of short sellers.)
The best shorts are ones where the common wisdom is extremely bullish. AAPL is closer to a classical value play than a short. World class technology, loyal customer base, brand recognition, cash, etc. -- with an earnings dissapointment (after two quarters of *better* than forecast earnings, BTW.)
Imagine the following hypothetical, but not unlikely, headlines and the consequent effect on your short position:
1) MOT and IBM, as an effort to defend billions already spent creating the PowerPC platform, create a fund to software developers to create NeXT/MacOS titles.
2) CMPQ/DELL/GATEWAY, citing client complaints about the rising costs of NT licensing and implementation, reach an agreement with AAPL to bundle the high reagarded NeXT OS/apps with their Pentium-based enterprise products. Further talks underway regarding implementation of the Common Hardware Reference Platform (CHRP)/PowerPC.
3) SUNW and AAPL announce agreement to collborate on an all-Java OS for Network Computers. AAPL also announces that it will use SUNW's Solaris microkernal as the basis for NeXT/MacOS.
4) The DOJ, after months of behind-the-scenes negotiations, announces an agreement with MSFT that splits the company in two -- one for its OS (DOS/Windows/NT) and one for applications (Office, Explorer, etc.) This effectively deleverages MSFT's stranglehold on the software industry and empowers real competition based on the best technology.
Another thing, the best SSs do their business and say nothing. Really. They don't want to attract "short busters". Let's be careful out there.
soup |
