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To: Clever Nick Name who wrote (8920)	5/2/1999 6:14:00 PM
From: ahhaha	Respond to of 29970

I didn't mention the XCIT arbitrage, but that is a good explanation of the unusual short interest. This is just another hedge. Share pricing is based on expectations of future profitability, not on factors of instantaneous supply and demand. In '93 - '94 MSFT was the most heavily sold stock I ever measured on a every trade basis, yet the stock went sideways at worst. The reason it did so was the price was determined by belief about prospects. It is the noise where belief gets its stage. In MSFT you would see 1000 shares on a 1/8 down tick and it would be followed by a 100 shares on a 1/4 up tick. That is the essence of markets and why they are superior in determining the value of anything. The democratic process insidiously finds the truth because in the final analysis the truth wins and people cling strongly to truth. Many cling to falsities and many to truth, so price randomly discovers where the greatest conviction lies. You always hold out for the truth, but look how fast they abandon a falsity.