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Technology Stocks : Dell Technologies Inc.
DELL 129.25+0.7%Dec 26 3:59 PM EST

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To: Islander who wrote (34080)3/12/1998 12:54:00 PM
From: Chuzzlewit  Read Replies (1) of 176387
 
Islander, this is a question I've always asked myself. Outside of general hedging and arbitrage strategies, it seems to me that there are only two sane reasons to short a stock. Either you think that it is severely overvalued, or you see something in the long-term fundamentals that has not been discounted by the investment community. The problem with overvaluation is that there simply isn't a good valuation technique for growth stocks. And I'm as critical of bulls as I am of bears who constantly set price targets.

The second possible reason I laid out is the only one that makes sense to me. Is there some apocalyptic event in the company's future that the market hasn't taken into account?

There are also reasons to short a stock which border IMO on the insane. Brokers recommendations, analysts opinions, astrological signs, reading tea leaves, and technical analysis all fall into this grouping.

Regards,

Paul
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