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Strategies & Market Trends : Strictly: Drilling II
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To: nspolar who wrote (25169)1/10/2003 11:07:13 AM
From: Art Bechhoefer  Read Replies (1) of 36161
 
nspolar--You must be in seventh heaven today, as the market is really reacting badly to the latest unemployment figures. I like your idea of buying puts on certain vulnerable stocks because puts are like a safe way to obtain a short position without incurring the infinite losses that could occur in a market turnaround.

While I also believe that many stocks are vulnerable, I like to make a distinction between companies with good management and those with mediocre or poor management quality, the latter being far more vulnerable. In that perspective, MMM appears to have much better quality management than most Dow components. What's the rationale here--simply that the company stock price was one of only three in the Dow Industrials that went up last year? I'd much prefer EK as a short candidate. EK was the top gainer last year, though its profits came mainly from cost cutting and reductions in staff, not from growth in its varied markets.

Art
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