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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: DiB who wrote (35026)	3/30/2001 12:00:13 PM
From: edamo	Respond to of 65232

dib...no problem with cash....agree with you on shorting...i won't short on valuation alone, but a combination of valuation and less then substantial business model and balance sheet....last year i shorted cmgi, this year rimm at 77...in and out of it... nothing wrong with taking a loss...if it precludes having to take a greater loss...even helps psychology if you sold higher then what the stock currently trades at....can give a fresh start, if you remain prudent and don't rush into buying anything that has yet to base....i'm not of the "tom" school of faith and trying to catch a falling knife....easier to pick them up after the have dulled a bit... any market, bull or bear can be bought....but always selectively...... good luck ed a.

To: DiB who wrote (35026)	3/30/2001 1:16:15 PM
From: J. C. Dithers	Respond to of 65232

Shorts, longs, good guys, bad guys, the Feds, whatever .... DiB, you speak for the average investor when you say, "I can't talk myself into shorting." Shorting is the province of the professional and the most experienced of investors and day-traders. The huge majority of individual investors do not short sell. Partly this is due to unfamiliarity with the technical aspects of shorting, along with the the vague knowledge of unlimited downside risk. But mostly it is due to a reluctance to want to be a part of the problem of falling markets, as opposed to wanting to be part of the solution to a healthy economy. There is a tremendous amount of psychology involved here. Every time someone speaks negatively about the shorts, you can count on an outpouring of protest about the legitimacy of selling short. We get the standard lectures about how shorts are necessary to maintaining the liquidity of the markets. But the bias against shorts comes more from the heart than from the head, more from emotion than reason. No amount of logic or rationality can change the fact that short sellers will always be regarded in the same vein as turncoats, saboteurs, snipers, whistle-blowers, or spies. These roles can be legitimate, even very noble (the French Resistance in WW11). But face it, just hearing these terms causes a certain amount of revulsion. Common sense may tell you to bet against your home team in the big game, but it's damn hard to feel good about doing it. The greatest anger I have toward Greenspan (representing the FOMC collectively) is that he has been the greatest ally the shorts could ever have wished for. When he began whining about "irrational exuberance," and when he stated that investors should not look to the Feds to bail them out of market losses, he flashed a big, beautiful, green light, all-clear-ahead for the shorts. How nice to be assured that your government is behind you with every short position you take. The steady diet of rate increases put his (our?) money where his mouth was. Even now, with the rate cuts, Greenspan assures the shorts that they need not fear any surprises, that cuts will be telegraphed well ahead, and that they never will exceed minimum expectations that are already priced in. Short selling by the pros and the sharp traders certainly does contribute to the falling markets, and we have the Feds to thank for making it all possible, with minimal risk. The average investor, the guy with long positions in stocks or mutual funds, the guy who believes in his country and wants it to thrive economically, the guy who roots for the home team to win ... well, those guys and gals get left holding the bag (which used to have some money in it, but which is now on empty). Is there something wrong with this picture????? J.C., venting here on a snowy day in New England.