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Strategies & Market Trends : The Art of Investing -- Ignore unavailable to you. Want to Upgrade?

To: Stuart C Hall who wrote (374)	2/5/1999 11:21:00 AM
From: Sun Tzu	Respond to of 10550

Thanks Stuart, like I said, shorting SIEB is the surest thing in the market to make money right now. Unfortunately you can't barrow it now to short. In addition, the key to beating the markets can stay irrational longer than you can stay solvent axiom is to make sure that you can stay solvent long enough for things to return to normal. In shorting SIEB, I took a chance, knowing that I may lose a lot of money on paper for the short term. Like I said, in the first 30 minutes I was $22,000 in the hole. To make matters worse, my broker called me and was pushing to close the position at a loss to cover the margin. However, the day ended with a $23,000 gain as I managed to short another 1,000 shares at 58 and the stock closed at 43. BUT even if that had not been the case, I had calculated (on Wed. when I shorted 1000 at 49) that at the worst the stock would close ~75. I would have 3 days to cover the house call, during which the stock would fall, and I have enough long positions that I could sell to cover the call. I also made a call to one of my clients and asked him if he could expedite my latest invoice today and make the deposit over night. If I had not set these expectations and contingency plans, then I would not have shorted the stock. BTW, I shorted 1,000 shares of JBOH today at 11.5. It is a pity that I could not short it yesterday in 20s and high teens like I was dying to do. As it stands the stock will hover around where it is for a while and it might even go up to 15. But in the end, I will cover around 6. On another note, the post about the A/D line set me back to my stock lab. The market internals are deteriorating badly. 7 Out of my 11 indicators say we are in a correction. I'd like to see another 1 or 2 indicators say sell before I close all my long positions and go net short. We may hover around for a few weeks, but things are very iffy. good luck to all, Sun Tzu P.S. I am hoping that Barron's coverage of this mania over the weekend will wake people up and bring me good fortunes. People will have a chance to discuss things over with their friends and feel the fear of God <G>