Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Lucretius who wrote (116034)	8/8/2001 12:27:38 PM
From: patron_anejo_por_favor	Read Replies (1) \| Respond to of 436258

One of SI's favorite short sellers gets an interview in TSCM: thestreet.com TSC: What's your take on the market right now? Shadkin: If you look at triple Qs, or the Nasdaq 100 (QQQ:Amex - news - commentary), they're trading at 80 times price to earnings, which historically is outrageous. People think that because the market has come down from 5000 to 2000, it's a gigantic move and that we've made a bottom. I disagree with that. Valuations are still extremely high on a historical basis, especially on the Nasdaq but as well as the Dow. I feel that only the tech economy is in a recession, and not the [U.S.] economy. And I don't see that the situation's going to get better any time soon at all. I personally think we're going to be retesting the lows. I see a downward trend coming in the next three months, but see some kind of a rally at the year's end. After that, I think we're going back to the lows. Valuations are very rich and need to come down significantly, to the neighborhood of an average of 20 to 30 price to earnings on the Nasdaq, and somewhere around 17 on the Dow. TSC: Is this a good environment for short players then? Shadkin: Yes, but shorting is not for everyone. Shorting is a game that over the last year has seen a lot of new people join in. And many don't understand the game. You have to be very careful when it comes to shorting, as shorts can be squeezed quite easily from any pops in the market. You have to make sure you don't short too many stocks or have too large a position upfront. Instead, you short stocks that are in very poor financial condition and maybe slowly add to your position. ... But you certainly do not take large initial positions in each individual stock. TSC: Is shorting a difficult strategy in after-hours trading? Shadkin: Not at all. What's nice is that you don't need any downticks to short. So let's say I like a stock that's trading at $7.50. I don't need the stock to make an uptick. I can take that bid down by selling into that bid. As long as there's some kind of liquidity, there'll be no problem shorting at all.