Roger's 1998 Short Picks Message Board

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Strategies & Market Trends : Roger's 1998 Short Picks

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To: Bald Man from Mars who wrote (15810)	11/28/1998 6:20:00 PM
From: RockyBalboa	Read Replies (1) of 18691

Bald Man, No he can't. There are gradual losses first. He thinks of a minor correction and stays. Then another one or a third, then a small corrective gain, he feels better. But suddenly - puff a major loss and he end up with negative equity. Consider you shorted AVCO or yesterday BAMM at 11 or so with all your equity WITHOUT using margin. You was dead finally ending with a negative equity after being bought in by your broker when AVCO went to 32 (35 aftermarket) or BAMM $44 !! You have to consider a technical breakdown so that your portfolio may be inaccessible for trading, even stop orders can't go through. YOu can have an accident tied up in hospital. Your cellular may lack electricity when you are tied up in a traffic jam.... (That's the job of Risk managers - consider different possibilities of failure). In absolute bear times in August and September I used sometimes 200% of my equity reserved for stocks for diversified (thank god) short positions, but sure I didn't feel very healthy then and caught myself covering too early sometimes. And still I have a bond portfolio too, like roger. C. Btw.: what have you done with your GERN?

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