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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Bob Rudd who wrote (7885)	7/29/1999 8:34:00 PM
From: James Clarke	Read Replies (4) \| Respond to of 78783

The New York Stock Exchange is going to go public, a guy shoots his family because he quit his job to be a day trader and lost his shirt, the market trades at the highest valuation in history, and short term interest rates are rising...hmm. I shorted some Citigroup today. I would have done the whole list if the market wasn't down 250 points. I'm thinking the buy the dips crowd bids things up for the first hour at least tomorrow. I intend to take the opportunity to short some of these: Providian (PVN) Amazon (AMZN) Circuit City (CC) The Globe.com (TGLO) Goldman Sachs (GS) Sunbeam (SOC) I'll have a bigger list by tomorrow, because I'm sure I am going to have some trouble shorting some of these. But this is my line in the sand. I think the end comes in the next three months. And it kills me to think I would be fully invested when it happens even though I have been calling it for two years now. These aren't naked shorts - I've got a stock portfolio that I won't sell backing them. I just want to be at least market neutral for the rest of the year. Yeah, Jim's semiannual market call. Last year at this time I was dead on right at the peak. I raised a lot of cash and bought a house with it. In February I sold half my portfolio and everything I sold went up 50%. After that debacle I said I'd never do it again, but I firmly believe, as I have for the last year, that I am looking at a historical extreme that will go down in the history books for a century along with 1929 and the early 1970s (1987 was nothing compared to those). What has changed is the final piece of the puzzle. Rising short term interest rates. That is what was missing from the bear case last year. Both in 1929 and 1987, investors ignored the first increase in interest rates. When the second one came it was too late. Owning a portfolio of stocks, I intend to short stocks with leverage to the market (beta). I make this move because the risk of being wrong and market neutral is much less than the risk of being right and fully invested. I'm sure there will be some other opinions on this. Bring it on. JJC