Had to laugh again.
Excellent post and very funny.
You're absolutely right that a squeeze can be created by simply
requesting delivery of your certificates or moving shares from
a margin account to cash. By the way, were you aware that a very
annoying type of squeeze can be generated (particularly in stocks with
extremely small floats), when a large shareholder wishes to sell
out of a margin account, and shares must be called in quickly?
Asking the people in this group to call in their shares is
futile though Monk:
1) I would bet that most of the posters, particularly the most shrill
and hysterical, have insignificant - if any - holdings in these stocks.
2) I would also bet they are currently unable to transfer to a
cash account because they probably financed their
purchases by getting a cash advance on their credit cards, and then
margining up to the very limit. In order to transfer or call in
certificates, the buyer must come up with 100% of the price.
I seriously doubt a squeeze will ensue in any of these stocks. I
hate doing the short-term crystal ball thing but I'm fairly certain
that the next few months will acquaint many naive NASDAQ "investors"
with the term "liquidity crunch". Furthermore, while I would
certainly be pissed off, I wouldn't cover my positions if all
of them doubled overnight. I collaterlize my shorts 100%. If
I'm confident that a company has little or no underlying value, I
use any rise in the price as an opportunity to dollar-cost-average.
What I find most fun about short-selling is not that I profit
from scams, panics, and speculation in pie-in-the-sky, it's
that I profit while aggravating all the self-styled experts who
have deluded themselves into thinking they've found a gold mine,
when in reality all they found is a big hole in the ground that
sucks money.
Once again, I offer some friendly advice: Don't invest in the
Y2K mania. In the long run you're gonna get burned. |
