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.

Strategies & Market Trends : Investing during a Bear Market -- Ignore unavailable to you. Want to Upgrade?

To: raymond marcotte who wrote (77)	11/10/1997 8:40:00 AM
From: Tommaso	Read Replies (2) \| Respond to of 226

"just be patient. this volatility and occasional-pessimism-period too will pass. over time stock prices trend upwards, so shorting is betting against the trend and even worse you are forcing yourself to predict the exact cycle for a particular stock(s). i never heard of anybody who got rich trying that strategy. it is not investing. for sure! why turn to speculation on an attitude about an uncertain futur" This would have been good advice ten or fifteen years ago. The record shows that people who are long at the tops of markets (1969, for example) have to wait many years before they recover from the declines that follow. Of course if it's a family fortune that has already been in the market for 20 years or more and mostly consists of unrealized capital gains, one can hold and collect the dividends. But with dividend yields low or non-existent on many current stocks, the best thing right now is to be in cash or short. The "buy and hold" mantra has been chanted too often. The longest-term, most optimistic investor I know is John Templeton, and he is recommending bonds. He has been in the market for sixty-five years.

To: raymond marcotte who wrote (77)	11/10/1997 5:52:00 PM
From: Vol	Read Replies (1) \| Respond to of 226

nope, i'm not an experienced bear. I was only 5 when we had the last true bear market in 73-74 and I couldn't convince my broker to allow me to trade on margin at the time. -ggggg- I am only considering shorting. BTW, I don't entirely understand your response. If I short a stock and sell covered puts, the following could happen: 1) Market goes down. My profit is limited b/c of the covered put I sold, but I make $$. 2) Market stays flat. I make money b/c of the premie I sold. 3) Market goes up. I am protected by the amount of premie I sold. If market goes up too much, I lose $$. this is the risk. I could then close out the position for a small loss or roll up the covered put. Make any sense? Vol