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Strategies & Market Trends : The Stock Market Bubble -- Ignore unavailable to you. Want to Upgrade?

To: Sondra Lowell who wrote (1028)	8/5/1998 3:12:00 PM
From: yard_man	Respond to of 3339

Short squeeze. IOM. AMZN. AOL. PRST. MU. All cases in point. When many shares are short and the price rises instead of falling -- there is a rush to cover to limit losses which drives prices up spectacularly.

To: Sondra Lowell who wrote (1028)	8/5/1998 3:51:00 PM
From: Terry Whitman	Read Replies (1) \| Respond to of 3339

<<Why haven't more fortunes been made shorting crashes? I know some people came out of the 1929 crash OK, but did anybody actually make a fortune shorting it? >> 1)I would venture to say that very few people thought there would be a crash. 2)Conservative type people do not usually short stocks. 3)Most of the regular shorters were probably spent out on the rise up. Short has been the place to be the last 3 weeks. I've been day shorting internets on the rallies, and covering quickly for the most part. Watching the tick and index charts in real time, and doing market orders to catch the moves. There are numerous threads on SI with info on shorting- just do a search on- short, shorts, shorting, etc. Happy selling, TW

To: Sondra Lowell who wrote (1028)	8/6/1998 12:09:00 AM
From: Moominoid	Respond to of 3339

Re # 6. "A very few fortunes are made shorting the crash." Nothing can fall more than 100% but things can rise to an unlimited extent. Even if you timed right and put all your money short you will only double your money at most not make a fortune. On the other hand the upside risk shorting is unlimited. Using puts the market has to go down fast enough for you to make money and you have to buy puts before anyone else realizes the crash is coming and raises the volatility premium. I think the best you are likely to do as a responsible investor is to gain very modestly in a crash. You could gamble right and make a lot but it's a high risk strategy. David