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Politics : Formerly About Applied Materials
AMAT 301.11+6.9%Jan 9 9:30 AM EST

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To: scott_jiminez who wrote (41811)1/31/2001 10:48:57 AM
From: brunn  Read Replies (1) of 70976
 
People short in anticipation of a bad news. They tend to cover once the bad new comes out (they made their money as the stock falls) and choose another stock to short. KLIC's fall in short interest from July to now reflects this. They were the first equipment company to come out with a warning--as is expected from a back end company. KLIC was the first equip company to fall and shorts made most of the profits they could squeeze out of it as it fell from the 40's to the teens. They then seek out other companies that may fall with bad news of their own--hence the increasing short interest in NVLS. I do not believe short interest corresponds to the long-term strength of the underlying companies. It is short-term investing almost by definition, especially when you short in this sector. The only time shorting is a long-term investment is when you feel the company is likely to fall to 0.
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