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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: vegetarian who wrote (12340)	12/24/1997 9:00:00 PM
From: Joan Osland Graffius	Read Replies (1) \| Respond to of 18056

M CARTER, >>Only point I did not understand well was that you said that you short a Dow stock after the sector in which the stock belongs has shown weakness and the Dow stock will be the last to follow; usually the money rotation in sectors takes place with periods less than a year why then would you need to hold the short for a long time unless the selection itself was incorrect? What I meant to say was sometines I am not on top of some things. I was out looking at basic materials stocks and noticed both Aluminum and Paper stocks were getting beat up. I looked at AA and IP and they were trading close to their 30 week MA. So I waited and watched and sure enough they rolled through my favorite place to short a stock. Now it could be both these stocks will sink further and could get another 50% haircut before it is all over, but this process could take 6 months to a year. In a bear market which could easly last a year stocks will slowly drift to bottoms. If you look at bear markets dating back to 1960, they all lasted at least a year and a couple lasted 1.5 years from top to bottom. One lasted 2 years and of couse 87 was a little quicker.<ggg> 1987 could be called a correction in a bull market. What I do not like about options is it is a zero sum game. Very few winners and lots of loosers. I will buy options only when I think I have over a 90% chance of winning. This may happen only a couple of times a year. Michael Burke has a strategy that is a winning strategy buying options. You can go to his thread and dig through his posts as he explains how he plays the game. Joan