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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Eggolas Moria who wrote (82017)	6/27/2000 9:21:00 PM
From: Earlie	Respond to of 132070

Gary: Good comments. Your friend describes the lesson that all shorts (both the survivors and the victims) are forced to learn the expensive way. Train tracks are not for lying down on. (g) "Their firepower is immense" is a particularly accurate comment, especially today. And the funds are not shy with respect to working as a wolf pack, which adds dramatically to their ability to drive the shorts into the dirt. By the way, I am not a short by nature, preferring in a normal environment to invest in the tech juniors. Unfortunately, the statistics emanating from this mania, suggest it is one of the worst ever, hence it is dangerous to be long juniors (they get beaten to pulp when things let go), so one is forced to adopt Darth's tactics. A few additional thoughts to add to your excellent observations. These are of course obvious, but bear repeating. A good short learns to hate company. It is the big short positions that attract the short squeeze activity. RMBS had a giant short position, so it was to be expected that an attempt to run them in would take place. Shorts have to do much more homework. They cannot afford to be wrong. The homework has to be all-inclusive. There is one fundamental that few pay attention to but that is very important for me and that is debt. In the end, debt is what takes companies out. Big debt is a short's best ally. Note that many companies that are massively over-valued (including RMBS) do not have big debts. This is what also makes them very dangerous short candidates. Puts allow one to sleep at night and make more sense from a leverage point of view for the average investor. MB's "thirds" approach and the rationale that backs it makes a bunch of sense to me. That said, sometimes puts are just so expensive. best, Earlie