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

To: Phil(bullrider) who wrote (1817)	7/31/1998 7:52:00 AM
From: Graeme Smith	Respond to of 4634

I would not suggest having Zona as your sole short. It would be a good short as part of a larger portfolio, but as a sole short it could be quite volotile. For the next year there is unlikely to be any significant news that will affect the stock so probably it will just drift along. That said, lack of sales in Mexico may be the news needed to sink the stock, but if not it could be a long hold. My recommendation would be to put a small amount into a few different shorts. My current portfolio is about 50% short with 18 different stocks on the short side. Despite the fact that the portfolio was intended to be very low volotility with high diversification and market neutral value, it is still up 30% this month. The problem with holding a single stock short is that the better a short it is, the more certain it is to double at some point in the future. Zitel, still one of the best shorts, has jumped 50-100% off its lows at least 4 times on its way down. And before it hits 0 it is bound to do it again. With a diversified short portfolio these jumps are opportunities, with only a single short these are hair-raising roller coaster rides. Graeme