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Strategies & Market Trends : Bill Wexler's Profits of DOOM -- Ignore unavailable to you. Want to Upgrade?

To: Bill Wexler who wrote (1460)	7/14/1998 2:30:00 AM
From: Bill Wexler	Read Replies (3) \| Respond to of 4634

Thinking of shorting DELL? Think again! I noticed that there is some talk on Roger's thread again about shorting DELL after the recent runup. I understand the temptation to short on overvaluation. I've made the mistake of throwing myself in front of an internet stock train or two...but at least I had the excuse that the companies had no earnings. Shorting DELL on valuation alone is suicidal...and demonstrates a misunderstanding of DELL's fundamentals, management, and business model. There is absolutely no reason that the stock can't go higher...much higher. I checked out the DELL bear thread: Subject 19667 The introduction to the thread starts out like this... <<<Dell Computer is obviously a great company and a great stock. There are times when the valuation seems to get a little out of line because of the success.>>> Gosh...this sounds exactly like the kind of stock I want to short. Let's add in the facts that the company is accumulating a mountain of cash, buying back stock by the truckload, and is building a powerhouse brand name. I really don't understand why short sellers even bother pursuing this stock. The same percentage gain can be made shorting an outright scam stock like CCSI when it drops from 6 to 5 a share than shorting a Dell from 120 to 100 (assuming you get that lucky!) Riding out a short squeeze in a scam stock only means that you wait a bit longer to take profits after the inevitable collapse. A short squeeze in a stock like Dell is a little bit different - because barring a huge market break or a fluke, the stock ain't heading back down. Don't short Dell. You are fighting a fundamental tidal wave and you are left to rely on a lucky break. Short sellers don't rely on luck, they rely on digging a little deeper to uncover rotten companies and fundamental problems. Dell should scare the bejeezus out of a short seller.

To: Bill Wexler who wrote (1460)	7/14/1998 2:10:00 PM
From: Y2k_fan	Read Replies (1) \| Respond to of 4634

<< I think it is safe to say that the vast majority of retail call volume comes from buys to open, a significantly smaller percentage comes from covered call writing, and the lowext percentage comes from naked call writing. >> For every call option opened, there must be one covered call written or naked calls open. No matter who initiated it. The premium is low because most of them are covered calls, I believe. And this create hidden selling pressure on option expiration date. So, it is indeed bearish.