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

To: Knighty Tin who wrote (100985)	11/18/2004 3:56:45 PM
From: Knighty Tin	Read Replies (2) \| Respond to of 132070

The Sun Also Sinks: The case for shorting Commodities. 1. They don't always go up. Sometimes they go down. 2. When prices get high, users substitute other products, use less and go out of business. 3. Shorting is something I can do and PCRAX and Qraax can't. O.K., that may not be a good reason for you, but it works for me. <G> 4. Commodities are not homogenous. No, that does not mean tight-arsed Republicans will allow them to get married. <G> It just means that cows can get Mad Cow disease while soybeans can get rust while cocoa can have a war in its major producing country while oil is zooming up the charts. One size does not fit all. We have had new highs in oil, gold, platinum, etc., while palladium, orangutan juice, corn and cocoa are skidding along the bottom of their historical trading ranges. Buying the cheap ones is a good strategy. At some point, so is shorting the expensive ones. 5. Selling commodities short is not evil, like selling stocks short. You are not rooting for a company to go bankrupt and ruin their shareholders and put all their employees out of work. You are rooting for The Ivory Coast to stop killing its citizens. For grain diseases to be cured. For hurricanes not to hit Florida. O.K., you are rooting for the farmers and miners to starve, but that's just a matter of taste. <G> 6. Selling short is only theoretically more risky than buying long on margin. In reality, both can wipe you out if you don't have a discipline. Or, if your discipline doesn't work. 7. You can't be a master of the universe unless you short these things as well as go long them.