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Technology Stocks : Creative Computers(MALL)
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To: Tom Hua who wrote (383)11/20/1998 11:55:00 PM
From: SkyDart  Read Replies (2) of 1634
 
Tom:

Agree with your strategies playing the short side on stocks like Ktel and Gern. Currently I own a large put position in geron that I acquired when it was about 12.

Due to the "irrational exuberance" of the net sector, I personally feel it is too risky to short outright the internets; I prefer the put option route as the potential losses are limited. I like to balance my potential downside with the potential profit side and enter into situations where the benefit /risk ratio is heavily in my favor. Geron is preferable IMO to the internets because there was one piece of news that drove the stock for a day...and geron has done this before and will settle back with high probability. Internet IPO's are not as quick to fall, and positive news is not a one time event, but a daily barrage.

I agree that Mall will eventually retreat; thus it is a potential long term short/put play; however there is no denying that the current market conditions are potentially EXTREMELY VOLATILE to the upside in internet IPO's, so I do not have the funds or the stamina to short them. At this time and through the 11/30 IPO of UBID, I would bet you a quarter [ 25 cents] that we see a significant runnup in Mall into the 40 to 50 range. The IPO's are heavily marketed and hyped and I do not believe Merril and Co. will disappoint in this aspect. Imagine the runnup when CNBC begins the UBID hype ala The Globe style next week. [The runnup will have little to do with ultimate valuation; Short term stock swings usually are much more related to emotion than underlying value; ie MO, KMG, DO, UPR etc, etc]

Afterwards I agree you may make a profit on your short position as the stock settles down once emotions settle.
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