LindyB:
Uh, sorry my lad, but you are inaccurate. There is a huge difference between those who have a negative outlook on life and those who are merely realists.
Just to set you straight, over the last 19 years, I have assisted in raising over $60.0 million for junior tech companies and I invested in every one of them personally. As well, for much of that period, I was a raging bull on much of the tech sector. My enthusiasm waned when I saw the early stages of complete saturation commencing, particularly in the PC/semi area. It waned further when I noted the arrival of blatant accounting nonsense. It disappeared completely, well before the market finally realized that tech earnings were collapsing (markets usually discount well ahead of events).
Money can be made in both directions in the market, especially if one does some serious homework. Given the current spiral of lay-offs and earnings shrinkage, being long, especially in the tech sector, is simply poor risk management.
I would be the first to advise a new investor that shorting involves significant risk (especially when the economy is buoyant, which it isn't at this juncture). As a result, in-depth homework is a necessity. For a variety of reasons, most investors do not complete such homework, hence I suggest that the average investor avoid shorting and merely conserve cash while awaiting the better buying opportunities that result from a bear market.
I note your comment that "You are afraid to invest because you might lose your capital. But if you want a reward, you have to accept risk". Do you think that one is investing only if one is long? Do you think that someone who acquires a short position isn't weighing the risk/reward ratio (perhaps even more carefully than the investor who goes long)?
As for my providing a "gloom and doom post with nothing to back it up but your fears", you might want to peruse some of my posts. You will find that they contain a fair amount hard research and facts. More to the point, those posts have resulted in solid investment gains. I would be delighted to compare my results from this past 12 months (which exceed 100% by a bunch) with folks who have resolutely invested only from the long side.
Best, Earlie |
