To: autocard who wrote (2567 ) 6/17/2000 10:11:00 PM From: autocard Read Replies (1) | Respond to of 2664
This is the hotlink and for your convenience I have printed the article itself just below. wired.com Wall St. Rumble: Longs v. Shorts by Craig Bicknell 3:00 a.m. May. 30, 2000 PDT Alan Newman is an American man of business. Like most such men, he believes in the unfettered opportunity to pursue wealth and opportunity wherever it may be. Like many, he believes today's best opportunity lies in the stock market. Yet many of Newman's countrymen would call him downright un-American if he looked for opportunity lying in their neck of the market woods. They'd give him a new name and spit it like a piece of rotten meat. In the parlance of the day, he's a "Short." See, Newman sells stocks short. He picks stocks that he thinks are about to plunge, borrows shares of those stocks and sells them, then buys them back and returns them after they tank, keeping the difference. Essentially, he profits from market pessimism -- an unforgivable sin in a nation built on the back of relentless optimism. To market optimists -- true believers in the companies they back -- the short is a gloating vulture feeding on their dying dreams. "Shorts are vilified," said Newman, a financial strategist for HD Brous, a New York brokerage. "The overwhelming view of the public is, 'Don't short my stock -- it's un-American.' But if I see a wildly overvalued stock, I'm certainly entitled to speak my opinion and to trade on it. That doesn't mean I'm a villain." While tension between "shorts" and "longs" has simmered since the 1920s, the Net, and the volatile market for tech stocks, has brought it to a roiling boil. Short-selling used to be largely the province of institutions and funds, but with the advent of online trading, it's increasingly the domain of the self-taught individual investor. "Online investors are getting more and more sophisticated, and short-selling is one popular option that sophisticated investors can choose," said Mark Beauchamp, executive director of the North American Securities Administrators Association. Take those new short-sellers, mix them up in an online investor forum with a bunch of newly minted, long-term traders -- many betting their kid's future on NetHype.com -- and you have the formula for a nasty rumble. Toss in a couple extra parts tech stock market chaos, and you have a full-out verbal gang war pitting shorts against longs. Since the Nasdaq dive in April, the fighting has reached a fever pitch in forums for last year's Net high-flyers. "Sell ePig NOW or be sorry!" writes a short calling himself "dr evil short seller" in the Yahoo investor board for eBay's stock. "It's all over for this disgusting piece of crap!!!! Sell now or be prepared to ride this HOG down to single digits where it belongs! Dr. Evil and his minions will smoke this fat PIG! HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA." "You suck you <censored>," an apoplectic long blurts in reply. "Dr. Evil is the best friend ePig long could ever have!" Dr. evil short fires back. "Dr. evil tells the truth, unlike the scumbag analysts who have led these ePig sheepie to the slaughterhouse. E-Pig longs will be sorry for not seeing the wisdom and heeding the helpful advice of Dr. evil when they lose everything to this bullshit Ponzi scheme. You want to be pissed off at someone for losing your ass? Point your finger at <censored> like Meeker who gives fleabay a 300 dollar price target based on NO RELEVANT ANALYSIS!" And so it goes in Net-stock forum after Net-stock forum. "I'm not surprised that it's gotten ugly, given how Nasdaq has fallen in three months," said Beauchamp. "Short-sellers aren't going to win any popularity contests." Despite the venom, Beauchamp says that short-sellers serve a vital purpose, particularly in the Net stock market. The shorts sniff out the over-hyped, the troubled, and the fraudulent, and noisily share their finds -- a valuable public service. As far as Newman is concerned, performing a public service and profiting at the same time is about as apple-pie American as it gets. "You have to have a mechanism that shows the market that a certain stock is overvalued. It's just another way of introducing efficiency into the markets," he said. "Some people would argue that the biggest short out there is Alan Greenspan," adds Beauchamp.