I also thought I'd share with you the following post from 'Loyd', an institutional broker from Beverly Hills:
In Wall St., the hardest thing to do well is to sell. How often have you heard seasoned and respected professionals say they buy well - but are not good sellers.
'Too low' is easier to detect: P/E, P/B, asset play, div. yld., etc. Good benchmarks wisely observed can often result in good investments.
'Too high' is much dicier. Most pro.'s are not such good sellers. Warren Buffett gave up selling altogether! ( small joke ) Obviously, lots of people do short stocks. Most will hedge. The options markets have made the shorting practice less dangerous and more businesslike. The original hedge funds were called 'hedge funds' precisely because their charter called for short positions to be balanced with Long.
But now we have an operater who specializes in the most difficult of speculative endeavors - short selling.
I agree with bird's recent comment that the price range of KRY is uncharacteristic for Mr. A. That's an incremental risk, and an unhedgeable one since there are no options trading for KRY. I am also of the same mind regarding the danger found at the $8 level for Mr. A.
Knowell's demonstration of Mr.A's record brings to mind the possibility that Mr. A is in trouble with his investment performance and is willing to take these risks to get the results he wants. He, being a de facto gambler by emphasis on the short practice, surely knows that you 'double up to get even'. (I wonder if his broker has asked him to move his account yet?)
He is short at $5. He did not cover in Jan when he should have. It hurt at $8. He is therefore fully committed to KRY short. Maybe, just maybe, he didn't cover this week. After all, it only went down to $5 - no serious profit for him yet.
Maybe, just maybe, the selling storm was way overdone. (I hesitate to review the % of the company that changed hands this week.) Have the shorts exhausted their bid-hitting long positions yet, have the margin accounts been squeezed enough. All the stop orders were surely taken out. And I expect a lot of just plain fearful selling occured.
Maybe, just maybe, next week will be very interesting and profoundly satisfying.
Asensio delenda est!
Interesting no? |
