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Strategies & Market Trends : Roger's 1997 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Jeff Bond who wrote (6655)	11/8/1997 9:24:00 PM
From: Pancho Villa	Respond to of 9285

JB >>I have read almost ALL of your posts, and I respect your opinion. I do not yet fully understand the short aspect of investing, any input you could give would be greatly appreciated. << Thanks for the compliment! Free advice on shorting [possibly worth as much as the price you are paying] 1.In terms of specific short candidates, there are poeple in this thread that I respect: Roger, the father of us all, CalculatedRisk (he does not have this name for no reason) Bill (?) and others. If you put in 100 hours to stufy a long, to study a short you have to put twice that much! This is because when you go long you have limited downside potential, not so with a short. Also, with a short you are swiming against the current as equities in general are priced so as to provide an expected return of 10%. You want to make sure you pick real dogs! (this being said I must admit to be crazy enough to have shorted INTC, WLA, and NVLS, luckly all at a profit). Also, very important! do your own homework!one area in which you do want to take a tip from a friend is on a short! (unless you do not value your $$$) 2. One thing people think is that shorting is extremely risky. Well, I disagree as long as you do not short naked (i.e., without having a significant net long exposure to hedge the short). ALso, in general, I do not devote more than 2-3% of my equity net worth to a single short position. (this being said my IPIC short position is about 8% but this is probably a short not as safe as ZITL or ACLY which I discovered at Roger's. You are probably aware of the developments going on there regarding a possible stock dividend. Which as a short you would have to pay. Basically, when you short a stock you are in the other side of the mirror. If the price goes down the broker credits your short account for the week - the oposite if it goes up. Also, if the stock pays a dividend in cash or stock you have to pay for it. After all you borrowed someone else's shares and sold something you did not have) 3. For threads in the mechanics of shorting go to exchange2000.com exchange2000.com they are not excellent [i.e., as good as Roger's but they are OK] In regards to SMTC, I do not follow the company but will study and report back. One point, even though i refer to Zacks ratings frequently I do not put a whole lot of faith into their reco's or those of any analyst for the matter [I apologize to the analist crowd but I do believe their opinion is often tied to the investment banking business they work for. Also, a lot of them are not very independent and inquisitive just a bunch of sheep]Zacks advice is more geared towards momentum investors which I am [and I guess you] are not. >>I am a long-position investor, with a goal of owning any issue I purchase a minimum of 18 months, to reduce my tax consequences. << With this strategy you have about a 99% chance of beating the best frecuent traders at SI! Regards, Pancho