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Strategies & Market Trends : Floorless Preferred Stock/Debenture -- Ignore unavailable to you. Want to Upgrade?

To: Daniel Chisholm who wrote (713)	7/13/1999 10:28:00 PM
From: Zeev Hed	Read Replies (2) \| Respond to of 1438

Daniel, I think it is much easier to find situations where you can buy long on margins and expect 300% over 3 years, than committing 200% backing for shorting a scam. Zeev

To: Daniel Chisholm who wrote (713)	7/13/1999 11:10:00 PM
From: dumbmoney	Respond to of 1438

If you short a "fraud" or a pump & dump scam, where your target is zero or essentially zero, then reserving 300% or 400% for margin and waiting two or three years for it to go to zero still allows a very respectable annualized rate of return to be earned. If you earn a positive return, however small, on shorting you have done well, because you have added to your overall return while decreasing risk. The alternative use of margin, borrowing to buy more long stock, increases risk - so you can't directly compare in a meaningful way. For those of us who will never be more than 100% long, shorting is 'free' and the margin required is essentially irrelevent.