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To: KeepItSimple who wrote (131700)	9/21/2001 6:44:33 AM
From: Paul Merriwether	Respond to of 164684

> Myth. Show me one stock in the history of the world, anywhere, that has reached a price of infinity. Reality: Show me one stock in the history of the world, anywhere, that has reached a price of below ZERO. However, many stocks have gained 10.000% and more. MSFT, INTC, DELL, GE etc. come to mind. Yeah, even after this beating, they are up bigtime since their IPO. The gains from shorting are finite, the potential losses are infinite. OK, so no stock has actually reached the price of infinity. However, even if you are Buffet posing as "KeepItSimple", you would get financially wiped out if you keep shorting indiscriminately(as you have suggested). Eventually. I myself have shorted with mixed results. My most spectacular failure was shorting AMZN in '98. The market didn't agree with my assessment of AMZN being a crap company. Luckily, I took losses, and continued on instead of persisting. My best short was actually not a short but an arbitrage. I shorted GMST(my favorite for many years) and went long TVGIA. Went on margin to juice returns. There was a premium of 25% in their merger, and when the merger went through in 7/00 I did rather well. The premium was because of a emotional market that was viewing GMST/TVGIA merger in the same light as AOL/TIMEWARNER merger. However, I really didn't see any reason why GMST would raise antitrust issues. ahh well, whatever! The point is, over the long term shorting doesn't pay. Just look at the market since '29. Pass it through a FIR filter, smooth out 1-2 year effects, and you will see what I am talking about. I agree that right now, its looking really bad. However, this too shall pass(there have been no more than 2 years of down markets since 1850's etc.). Heck,even the billionaires like the Bass' have resolved their 2 billion margin call! What could be a better buy signal than that? eh?Better position myself, by buying in, little bit at a time. The spike down after the tragedy is smelling of capitulation...