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Technology Stocks : Intel Corporation (INTC)
INTC 35.53-1.1%Nov 14 9:30 AM EST

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To: Michael Bakunin who wrote (75545)3/5/1999 5:31:00 PM
From: xstuckey  Read Replies (4) of 186894
 
Michael,

The problem is simple. Do you part with 20 to 25% of your capital in taxes because you think the stock will decline in price ? You could easily be wrong about the stock going down, and you would still owe the 20 to 25% (and much more in some states). Maybe you don't see this as a problem, but I do.

Then, of course, you would have the problem of what to do with the money and if you believe long term results, you would probably conclude you need to put it in stocks. But what stock ? You would have to throw darts until you ruined your arm to strike a stock that has outperformed Intel in the past 5 years.

Or, like Humble Carl, you could not sell and just live on the margin for life.

As for shorting an index, you can't do it. I don't think you have studied this problem. All you can do is buy a put on an index. Hope springs eternal, options expire.

You could short S&P futures in the commodity market but here again you have to pick a month. Pick one very far out and the carrying charges will eat you up.

Why can't you see the problem ?

Best Trading,
X
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