Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Bill Wexler's Dog Pound -- Ignore unavailable to you. Want to Upgrade?

To: Kevin Podsiadlik who wrote (735)	4/16/1999 12:59:00 AM
From: Mama Bear	Read Replies (1) \| Respond to of 10293

Kevin, I guess it's because folks figure gains on what they initially put at risk. Of course the fellow who buys at 1 is out of pocket for real money, and the short seller isn't. If the long stock goes to 2, the only gain a long gets without closing is the ability to borrow more money from his broker. If the short goes from 7 to 6, that moves cash into my account. If I use the cash generated by the decline to short more at 6, is that a new trade, or does it add to the percentage gain of the first trade? At the end of the year when I mark my portfolio to market and compare the percentage change against the close of the last year is the only relevant figure, IMO. I'm not aware of any stocks that have gone to infinity, although it certainly looks like some of the 'nets are making the attempt. Somehow, I doubt even they will make it. I am aware of a number of stocks that have gone to, or practically to, 0. Infinite risk is theoretical claptrap. In reality, the risk of going short is only a bit greater than of going long in a margin account. Your broker just won't let it exceed that, because he knows he'll be left holding the bag if he does. Of course having money on both sides moves you closer to being market neutral, and therefore reduces your overall portfolio risk. It sure was nice having money on the short side of the table in October of the last two years, and in August 1998. Barb