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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club

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To: MrGreenJeans who wrote (11085)	1/13/2000 10:18:00 PM
From: marc ultra	Read Replies (3) of 15132

MrGreenJeans re<<<<Question: Why not use Ryaix or Uspix to short the QQQs against your B2B holdings instead of shorting spiders? I would think the correlation is better between the two. With the QQQ being overvalued I would also think there is a probability that much money could be made on the downside.>>>>> Good question without one sharp clear answer. Among my thoughts were 1)The Nasdaq composite was already down about 7% at the time of my hedge while the S&P was within a couple % of it's high and the Dow even closer to a high. 2)I consider Bob's bear call to certainly pertain to the S&P500. While all things being equal the NAZ should fall more I wasn't really looking to make a call on how long the inmates would be running the asylum or whatever metaphor you prefer. I also wasn't looking to short the Dow as we could see cyclical strength etc. at the end of the bull. I had just sold my DIAmonds to raise cash anyway. 3)I wanted to be on top of this and both didn't want to use a mutual fund and lose the flexibility of trading during the day and I also decided not to use the secondary online broker I was using to do mutual fund trades like the Profunds Ultrabear I used for a while last year because I wanted to stick with Schwab where my account designation gets good service but they charge a lot more for fund trades. I thus decided to do heavy selling of my tech stocks and except for ARBA as the only B2B and a few other stocks I figured if we do indeed hit a bear I should do OK with a heavy short position in SPYders at Schwab giving me maximum flexibility and not getting killed too bad if we have a big blow off rally in the Nasdaq or just a continued huge rally if an early bear market doesn't in fact develop. Also looking at B2B more specifically it is possible that these stocks that have 10 fold increases in a short time could tumble at the same time the Nasdaq continues to move up making me a double loser on some heroic hedge. So anyway I took a bit more conservative approach greatly reducing my tech exposure, heavily shorting the SPY's to cover my funds and maybe a little protection for my small remaining tech and a few other stocks I'm holding. Now the question is will do the bear come. Maybe Greenspan tonight will give things a little push though I haven't heard what he said yet Marc

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