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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: NOW who wrote (192383)9/18/2002 9:27:02 AM
From: reaper  Read Replies (1) of 436258
 
Tooearly -- since i didn't really finish my answer yesterday
Message 18000895

i thought on it some more last night. basically, what ACF has become is an insane beta bet on the market. IF the stock falls, then they need to sell more and more stock to solve their liquidity problem, which will drive it down further. IF on the other hand there is a short-covering rally, then they need to sell less and less.

so basically, if you are looking for something that will be dis-proportionately down on a bad down day (or over a bad down series of days) then ACF is your man. IF you really hate the market, you should be doubling down on your ACF short rather than covering.

i personally do not need that kind of beta at this point, so i will be covering half of my position at the open this AM, presuming it opens in the low $8 area, and letting the rest ride.

Cheers
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