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

To: craig crawford who wrote (9148)	12/30/1997 10:54:00 PM
From: Mama Bear	Read Replies (1) \| Respond to of 9285

If I have $10000 in my account, and sell $20000 of stock, I have $30000 in my account. If the stock goes to 0, and I never have to pay back the loan, I will have $30000. It is indeed a 200% return. If when the stock value falls to $10000 I short more of the same stock with my profit, I have initiated a new trade, and any return on the new trade should be calculated independantly of the previous trade. 200% is the maximum return. Barb

To: craig crawford who wrote (9148)	12/31/1997 1:00:00 AM
From: Rubber Man	Read Replies (2) \| Respond to of 9285

Theorectical return of a short.. here's a little chart. (I use datek as you can see.) Since your buying power goes up when your stock goes down, the return on equity can be quite high. Here's an example of shorting a stock at 60 and continue to short it (with the additional buying power) every $2. Real Cash Actual $ B/P Short Val Acct Val Shares % gain $30000.00 $ 0.00 $ 0.00 $19980.00 $10020.00 333 $60 100.20 $30000.00 $ 0.00 $ 0.00 $19980.00 $10020.00 333 $60 100.20 $30000.00 $ 656.00 $1312.00 $19314.00 $10686.00 333 $58 106.86 $30000.00 $1312.00 $2624.00 $18648.00 $11352.00 333 $56 113.52 $32700.00 $ 617.96 $1235.91 $20682.00 $12018.00 383 $54 120.18 $35300.00 $ 73.91 $ 147.82 $22516.00 $12784.00 433 $52 127.84 $35300.00 $ 929.91 $1859.82 $21650.00 $13650.00 433 $50 136.50 $37700.00 $ 585.87 $1171.74 $23184.00 $14516.00 483 $48 145.16 $40000.00 $ 391.83 $ 783.67 $24518.00 $15482.00 533 $46 154.82 $42200.00 $ 347.80 $ 695.59 $25652.00 $16548.00 583 $44 165.48 $44300.00 $ 453.76 $ 907.52 $26586.00 $17714.00 633 $42 177.14 $46300.00 $ 709.73 $1419.46 $27320.00 $18980.00 683 $40 189.80 $50100.00 $ 165.67 $ 331.33 $29754.00 $20346.00 783 $38 203.46 $51900.00 $ 821.64 $1643.27 $29988.00 $21912.00 833 $36 219.12 $55300.00 $ 777.58 $1555.16 $31722.00 $23578.00 933 $34 235.78 $60100.00 $ 233.50 $ 467.00 $34656.00 $25444.00 1083 $32 254.44 $64600.00 $ 139.42 $ 278.85 $36990.00 $27610.00 1233 $30 276.10 $68800.00 $ 495.35 $ 990.71 $38724.00 $30076.00 1383 $28 300.76 $75300.00 $ 1.25 $ 2.49 $42458.00 $32842.00 1633 $26 328.42 $81300.00 $ 257.15 $ 514.29 $45192.00 $36108.00 1883 $24 361.08 $89000.00 $ 163.02 $ 326.03 $49126.00 $39874.00 2233 $22 398.74 $98000.00 $ 118.87 $ 237.73 $53660.00 $44340.00 2683 $20 443.40 $108800.00 $ 74.69 $ 149.37 $59094.00 $49706.00 3283 $18 497.06 $121600.00 $ 230.47 $ 460.95 $65328.00 $56272.00 4083 $16 562.72 $137700.00 $ 336.21 $ 672.41 $73262.00 $64438.00 5233 $14 644.38 $158700.00 $ 291.86 $ 583.71 $83796.00 $74904.00 6983 $12 749.04 $186700.00 $ 247.39 $ 494.78 $97830.00 $88870.00 9783 $10 888.70 From the original $10000 ($20000 with margin), 333 shares were shorted. In the end, when the stock is at $10, you have over 9783 shares shorted whose value is worth approximately $89,000! That's almost a 900% return. The thing is, with such a large investment any upswings in price can be disasterous.