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Non-Tech : Bill Wexler's Dog Pound
REFR 1.820+5.2%3:58 PM EST
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To: Bill Wexler who started this subject2/7/2003 3:15:03 PM
From: Bill Wexler  Read Replies (2) of 10293
 
A warning to short sellers:

In my opinion, short sellers should be using days like today as an opportunity to at least partially cover positions and take some profits.

Reasons:

1) Pessimism and fear are way too high.
2) Short selling has been "easy money" for over two years.
3) The parallels of current market behavior with the market just prior to Gulf War I are eerie.
4) Big down days on the Dow and Naz are more often met with what I call "garbage countertrend rallies"...i.e. the most noxious frauds (such as REFR, VLNC, etc.) pop up slightly on low volume covering.

This doesn't change my opinion about the quality of certain companies. For example, I continue to stand by my opinion that stocks such as REFR are frauds. However, I will not pass up on better opportunities simply to engage in the same sort of chest-pounding and religious fervor that scam-stock cultists are so fond of.

I think we are fast approaching the days where short-selling is going to be a lot more painful...and more opportunities will pop up on the long side. In other words, the crap is so low that the risk of hanging on to short positions far outweighs the potential rewards from these levels...and the good stuff is so low, that it's becoming difficult to pass up bargains (granted, even though it's possible I may be early).

I am...and will continue to cover across the board. And being the contrarian I am, I'm also starting to go long on a lot of beaten-down high-quality tech and companies trading near cash value.
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