Cramer on CNC and Jacobs
Who You Gonna Call? Shortbusters!
By James J. Cramer
8/1/00 6:09 PM ET
The Web can't be beaten for monitoring all sorts of things that formerly couldn't be monitored. For example: stories that get posted on the Web. My "Getting the Shorts" piece about Irwin Jacobs' attempt to force the Conseco (CNC:NYSE - news - boards) shorts to cover -- so far it's not working -- got posted on Yahoo!'s (YHOO:Nasdaq) boards eight times in one day. In all different spots. By all different people. This is many more times than my pieces usually get reposted.
That tells me that getting the shorts -- that is, bashing them, making them pay -- is a major preoccupation of a whole bunch of traders and investors out there. Which means I have to spend more time talking about the process and more time talking about how to short, how to cover and how to make bets against shorts. (Curiously, I anticipated some of this ahead of my Real Money conference next Monday, because the combat I intend to have Bill Fleckenstein revolves around betting against gang shorts. You should be there if you reposted this piece or read it on Yahoo!, believe me.)
But before I dig deeper into the topic, let me explain one thing. I bear no ill will toward the shorts. Their warnings and their gloom has both kept me away from bad situations and allowed me to buy stocks at bargain prices because of pessimism.
I don't think Jacobs is doing anything majestic by orchestrating this raid against the shorts. What I praised was that he bothered to explain to people, publicly, how brokerage houses routinely lend out your stock to be used against your treasured longs. I hated that process when I was a broker and thought it deceitful. I do everything I can to be sure the stock of my longs is not lent out to bears trying to bash my positions.
But I am also a realist. If the fundamentals stink, you can take all of the stock out of circulation you want -- that dog won't hunt. Period. So, I don't think that trying to bust shorts is the best way to make a buck. But I do think you should know how the process works, if only to defend yourself and your stocks against relentless bear activity.
thestreet.com
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Using a Clinton quote on the stock.
Jack |
