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Pastimes : Ask Mohan about the Market

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To: Joan Osland Graffius who wrote (12337)	12/24/1997 8:40:00 PM
From: vegetarian	Read Replies (1) of 18056

Joan thanks for the explanation; it makes good sense. Only point I did not understand well was that you said that you short a Dow stock after the sector in which the stock belongs has shown weakness and the Dow stock will be the last to follow; usually the money rotation in sectors takes place with periods less than a year why then would you need to hold the short for a long time unless the selection itself was incorrect? One could argue that when one does not try to catch tops it could take longer, but your weak sector heuristic looks good so how often do you hold your shorts for long periods which behave the way expected them to? I would imagine that shorts and options are tradedd with horizons smaller than long term plays, also it may not be desirable to hold shorts over much longer periods unless the stock is monotonically in a downward trend in a long bear market (a rare creature these decades). Happy Holidays

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