Like many folks, I lost most of my retirement funds with the tech bubble burst. As a self-employed, I am 100% responsible to generate enough $$ to be able to retire.
I placed big bets in the late 90's on the internet and technology. Was way ahead, (again like many folks) and listened to the "gurus" who said to be a long term investor. We all know the rest.
So now I'm faced with the prospect of having to work 10 - 15 more years than I planned. My onlu other choice was to make another big bet to try and recover as much of my losses as possible.
It appeared the only way to do that was to find a group of "fallen angel" penny stocks, bet big and hope I hit more right then wrong. Of course, this would wipe out what was left of my savings.
THEN ALONG CAME TYCO. It caught my eye, like many, because it was so widely publicised and a paoter on another board suggested I take a look.
I made a few bucks trading in the 30's and mid 20's. All the while reading every piece of crap written about the company.
But, as a former accountant, I could never reconcile the "noise" with the cash flows and varying portfolio of companies and industries that made up this "conglomorate".But at $20 per share, I couldn't accumulate enough shares to make my BIG BET.
THEN ALONG CAME THE SHORTS! They artificially drove the stock down fom the 30's (which was 50% off its highs already) to a low of $7. So, I made my big bet, listening to Bill Miller and sold everything to own Tyco. Bought from $15 down to $9 before I ran out of money. Now it's only a matter of gut check time. I believe most of the analysts (Lehman being one) that say the upside target is $50. It may take a few years, or maybe not, but with an improving economy along with allthe stuff you already know about, it looks like I made a good bet.
ALL BECAUSE THE SHORT SELLING MACHINE WAS ALLOWED TO STEAL FROM GOOD LONG TERM INVESTORS.
FOR THAT I AM VERY SAD. IT HAPPENEDTO ME WITH THE TECH BUBBLE.
The morale to this long winded story is;
Short sellers gave me this opportunity BUT
Short selling adds nothing but grief and heartache to the markets and should be illegal.
The markets were developed to provide business with capital sources to grow, generate jobs and pay dividends to their owners.
What in the world does short selling bring to the table.
I've never shorted a stock, but...
I thought I'd point out several things that shorts do (at least in theory) to improve the market:
1. they provide large shareholders & brokers an additional source of income by margin lending their shares and charging interest. The shorter must also pay any dividends due to the borrower.
2. they reduce volatility by providing selling pressure at the top, keeping share prices from going skyhigh.
3. they do the same thing at the bottom. Convering causes buying pressure which gives support. Without short covering, TYC may have gone to $2 instead of $7.5 as longs panicked.
It takes all kinds of traders/investors with all kinds of time horizons and sentiments to make a market with good liquidity.
If I were to blame anything on the fleecing of the retail investor, it would have to be:
1. The media tool, which has been blatantly used to manipulate the markets.
2. Corporate corruption.
3. Discount internet brokers, who got people into investing in individual stocks who shouldn't have been.
thank you fo ryour input about GNSS.
Your ideas about short selling are well said.
From your insight and thoughtful about market I was very surprised to know that you didn't short any stocks.
WE all know the diversity (Cash, bond, stock..) the King in stock market. having short positions in your stock portfolio was another way to diversity your positions and protect your money.
By the way, if you knew very well that XYZ stock was very overvalue, what are you going to do if you could not short it?
In my views, good shortER and longER was the same person, when time to short he became shortER. when time to long, she became longER.
Meanwhile longERs protect any stocks to be oversold; and shortERs protect any stocks to be overbougth.
simple and plain.
TO some longERs, if we didn't short, and didn' know about short, Please don't rush to make a call whether short sellling is a bad, unamerican.
Hi, EF, you take care.
Just got to my office a little while ago and was catching up on this board. After hrs and weekend posters seem to be more coherent and informative. Heck, even longcrusher has toned down and makes more sense. TYC shorts are toast. A couple of good post's from last night #330618 and 330638. Short lies in this market create fear and investors dump without question, Pumper longs lies, investors due their DD before buying (in most cases). I am just happy to be making $ in this shark tank!
Wow, What a fanatsy world you live in. Look at the statistics on TYC. 52 million shares short now this is the most in a long time not enough to move the stock very much when the stock was at 7 the short interest was at 38 million shares very small 2% . ( I mean look at CPN 20% of their stock is short 80 million shares) there the shorts did real damage but remember they are going to have to cover already the stock is going up. You listened to a bunch of gurus lost your inheritance probably believed in Santa Claus until you were eleven and didnt figure out there wasnt a god until you were 20 and you still believe politicians Nobody except the extremely naive listens to brokers many times they are selling the stocks they are telling you to buy so they can get hefty prices. I bailed out of Csco at 80 and Yhoo at 235 both way over priced, TYco has been sold out of fear associated with this stock starting back with TICe ( who in my opinion shorted and distorted) You follow all the pied pipers who come along. I think you have a winner with tyc but really the short interest isnt enough to due damage people plain sold and never bot back. Shorting is fine but distorting isnt. Take a course in critical thinking.
You are right about everything you say excepts a few claifications are needed:
I still believe in Santa Claus
Have always believed in God
I only blame myself for my investment decisions
Politicians are exactly that, but that's who runs our country, and its not such a bad place to live (with or without Clintons)
I am very happy to see you made all the right decisions and now must be living in the lap of luxury
If you are cynical as you claim (no God, no Santa Claus, distaste for your government) you have a pretty shallow existence.
I have story similar to yours.
I had $14 per share in tyc and panicked when the shorts drove it down to $7.51. You were right to be buying there.
Please go to the yahoo "Short Selling" message board and copy your story over there. Also read message # 85 on that board by Jack Anderson the syndicated columnist.
He along with a lot of us think shorting should be banned. WE CAN GET IT DONE.
If we keep the stories coming on that Short Selling board and inform our Senators that we have posted a story there, pretty soon the staffers of all the Congress Persons will be checking that board several times a day.
If the non-smokers can do what they did for the unethical stuff in the tobacco industry we should believe we can accomplish what we want in the "Brokerage Culture".
Thanks for your story!!
Being relatively new to the market(a few years) when I found out that shares could be sold that were never even owned. After seeing the effect of short selling I've concluded that the market is really alot like the horse races. Just a big sport. At least in the horse races you know when you read the past performance history of a horse, it is factual and not padded or altered and the odds are real. People can't sell win tickets on horses that they don't own to dramatically change the odds. Shorting makes the market nothing more than a game and a crooked on at that. It has caused a hell of alot of good people to lose their life saving meanwhile big money smiles away. Shorting needs to be banned permanently. It is Unamerican in the fact that it hoping companys fail and people lose their savings. It is wrong. But wall street makes too much money allowing it so good luck getting it changed.
i read some of your stuff earlier today. You're a man in my boat house.
Let me know if you ever want to talk about heart issues. Had a double bypass at 45.
In terms of Tyco, we can never be sure of anything. But, by the time everybody gets their hands from up the company's ass looking for reasons to pick up some fine money or tack on some years to Koz, we will own the most audited, reviewed, investigated and analyzed company in the world.
Not a bad place to be when everyone starts looking for "safe investments".
My only regret is that I ran out of money the day the stock tanked to under $7.
Good Luck, man.
PS: I did the Atkins diet. It works but its tough. But keep an eye on your lipids.