Your thinking about the internet thing is getting fuzzier.
I'm not trying to be a jerk, I'm only trying to give you a straightforward and honest opinion...so please don't be offended.
That last post reminds me of the scam stock gamblers who constantly worry and talk up their positions. When an individual investor asks, "What's the afterhours market like?" That's a clear signal to me that he ought to rethink his strategy carefully.
I still see no reason to short this market in general and internets in particular.
Whenever I short a stock, I look for the following attributes:
Dull, bad, boring, depressed, suspicious, alone.
Silly...but the internet stocks don't fit into any of those categories. If you recall, I tried a quick foray into shorting based on overvaluation a long time ago (YHOO, ATHM). I covered, changed my mind and turned bullish. That doesn't mean the stock appealed to me as an investment (unfortunate...since it is up 10x from my cover point), but it became loathsome to me as a short.
Despite the stratospheric valuations - and all the signs of a major stock bubble - the stock is even more loathsome as a short at these levels.
Internet stocks have entered into an arena analogous to quantum mechanics. And just like quantum mechanics, it doesn't seem to make any sense, it doesn't play by the "normal" rules, but you must accept it as true.
You have situations where a small investor may short 100 shares, see the stock spike 5 or 6 in minutes, place a market order to cover in a panic...and then discover that his order filled 10 minutes later at another 5 above the ask at the time of the order, simply because there was no stock available to buy, and too many competitors for scarce shares.
Yeesh - who needs this nonsense when you have plenty of PNDAs and ZITLs ripening on the vine right now. You simply need to have the patience to wait this market out and then swoop in for the kill when the time is right. There really is no need to top-tick the market.
Shorting a PNDA from 5 to 4 provides the same return as shorting a YHOO from 200 to 160...with a lot less stress and far more certainty of success. |
