Joe, I was shorting NOVL regularly in Sept of 99 through most of Oct. 99. I then took a break, and started shorting again in Feb of this year. I started shorting back in 99 because friends in the industry reported back to me that there is significant management disarray at NOVL. I did cover when at one point the stock sank to the teens on a BofA analyst downgrade. Shortly thereafter the stock rose and kept going up - unfortunately, I did not go long, and frankly, I'd have made more money going long at that point than I made earlier by going short - thus, in all honesty, my first short in NOVL (sept of 99) must be judged a relative failure. I started shorting NOVL again in Feb once NOVL broke 40 to the upside. My reasons were - valuation and safety. On valuation, my thoughts were quite simplistic: the company at the time was trading at better than 6X sales, p/e in the 70's, and my impression was that Windows NT and Linux were a tough combination marketing-wise coming at NOVL from two sides, and I didn't see any signs NOVL knew how to position themselves, while NDS seemed in a perpetual "the check is in the mail" phase - so where would the revenues come from? Btw, I got quite a bit of insight from this board, which I regard as excellent, if you ignore certain repetitive contentless and not particularly "smart"<ggg> "PEACE, GO!!!" posts). However, there were many tech stocks far more overvalued, so why NOVL? Basically, I knew the stock from before, and I figured that NOVL was a *safe* stock to short - it was unlikely to rocket like some interntet stocks on a short squeeze, and in general, this is not a stock that tends to rocket, thus, the combination of knowing the stock and safety made it a target for me, even though there were countless other infinitely more overvalued stocks.
Morgan |
