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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Dale Baker who wrote (6787)	4/12/1998 2:46:00 PM
From: Investor-ex!	Read Replies (1) \| Respond to of 18691

Dale, You are correct. As the shorts are forced to cover in order to stay in business for another day, they unwillingly and unwittingly contribute to the bubble. Likewise, longs who initiate positions at these levels and then are forced to sell at various points during the bubble's inevitable decline will someday be contributing to a ferocious and/or extended decline. The shorts may be "feeding the fire" but they're not the ones tending the coals. I have no idea how quickly the short interest in these high fliers turns over in relation to the long positions, but if AMZN has 100% of its float currently short, then these shares have NOT been bought back -- yet. Furthermore, with a short interest this high, AMZN will find unbelievable and undeserved levels of support as the shorts buy back their shares during AMZN's decline. And AMZN, like most of the internet stocks, will decline. They sell a commodity, competition is deep-pocketed and ubiquitous, they don't and won't ever earn enough to justify this market cap, and no one in their right mind would buy them out at these levels. If they or any other internet retailer ever did make meaningful profits online, the barriers to entry are so low that new competitors will rush in and undercut them. Mall retailers never have had any never will have anything approaching pricing power. Just go to another mall or another store in the same mall. Over time, this will become ever more apparent regarding the internet as well. As businesses, most of these stocks will never have legs to stand on. Unfortunately, in this market climate, shorting any of them is a dicey proposition at best.