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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: JC Jaros who wrote (24006)	12/5/1999 5:27:00 PM
From: fuzzymath	Respond to of 64865

Good advice: don't short. When I first started investing, in 1987, I had this brilliant idea: the market's going to crash, so I'll sell stocks short! Well, sure enough I sold the market short with many trades between March and August (when the market peaked). Having lost lots of money, I went to the sidelines and began looking for a different approach, a market-neutral approach. I watched the '87 crash from the sidelines, then began trading my low-volatility utilities and did quite well (as I said in my previous post) for a year. The point is -- in shorting a stock (or the market) you're betting against innovation, progress, inflation, etc. A lot has to go wrong for a stock or the market to be extremely overvalued. And timing the decline is nearly impossible. A stock or market that's going to crash is likely to be very volatile -- which means its price movements before it "crashes" will be highly unpredictable. Don't try to make money shorting. Shorts balanced by longs (the market-neutral approach) maybe--but not pure short. Unless you KNOW we're headed into incredible deflation. But of course, the Fed won't ever let that happen. We've learned that lesson -- the next crash will be because of something different (like maybe our -4% savings rate?). kfarnham