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Gold/Mining/Energy : Solv Ex (SOLVD)
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To: WTMHouston who wrote (3156)5/30/1997 1:52:00 AM
From: JJB   of 6735
 
WTMHouston

Thank you for response. IMO (same as Imperial Oil symbol) your scale has validity but as with all complex systems this is not just linear. As I mentioned previously I don't short because I don't understand the purpose of the transaction. Yes, I know to make money and when it is covered it is legal. I don't understand how one party obtains an interest in some other parties future bad fortune.

As an investor over the last month my fundamental analysis of this company did not change if anything I felt better about it. So I buy a share on weakness. Now as I understand it you have "borrowed" share from somebody else and then sold it to me. The person who this share is on loan from and I both can see this share on our individual bokerage statements. To Solvex and its market capitalization this share only exists once. The reported short position increased from 4/15 by 655,000 to a total reported short of 4,009,145. That means 655,00 shares were newly purchased. If management had issued shares to raise money for valves it would be dilution and scarcity of my previous shares has been devalued. Hopefully the valves added value to the company to more than offset this loss of value. Short shares do nothing but dilute.

Now the only thing that the person who "borrowed" the share wants to happen is for it not to be worth as much. Closer to zero the better. Someone "borrows" your car and profits by destroying its value, and that is how long feel about short regardless of risk investment philosophy. At least the some of the ones who don't short (complex systems).

Just my thoughts

jjb
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