to 2ndfloortrader or HereditaryBroker or
wallstreetinsider or some such and start to dispense good solid
stock advice to help all those unfortunate soles on
this board who do not have clue and are looking for
direction anywhere they can find it. Than again, maybe I
will keep my name and just continue to exercise my pie
hole and annoy those who are most easily annoyed. You
know the ones I am talking about? The ones that are
the most insecure about their present position. The
In this difficult environment, says Michael
Murphy, editor of the Overpriced Stock Service newsletter
in Half Moon Bay, Calif., "most of the short sellers
have gotten very good at putting very tight 'stop
losses' in," that is, closing out their losses when stock
prices rise to a certain level instead of letting the
One area that has made money for
short sellers recently has been airline stocks, which
have declined because of rising fuel prices and unused
capacity. The stock of US Airways Group has fallen to 35
5/8 from 64 in January on the New York Stock
Exchange. UAL, parent of United Airlines, has dropped to 63
7/16 from 87 3/8 on the Big Board.
But in many
cases, short sellers have steered clear of large,
blue-chip stocks, which have outperformed smaller stocks
for four years running, and which they charge rise
simply as money flows into index funds.
occasional successes, rising stock prices overall mean it is
still a tough slog for short sellers, who take umbrage
at the prices investors are willing to pay now for
stocks. "The U.S. economy has been in an unusual sweet
spot for the last several years," hedge-fund manager
(and frequent, though not exclusive, short seller)
David Rocker wrote to partners of his hedge fund in its
second-quarter report. Mr. Rocker's partnership had a loss of
1.9% in the second quarter but gained 29% in the first
quarter (both returns are after fees). But Mr. Rocker
reported signs that the positive "trends appear to be
reversing," and "the persistence of this favorable climate
must now be questioned."
Hope springs eternal.
So why haven't more short sellers been making hay
on the Internet's decline? Because they tried so
many times before -- and got burned. Some Internet
stocks that have attracted shorts, such as Network
Solutions, trade for less now than at year end. But many
Internet stock prices are still up sharply since Dec. 31:
Shares of eBay, for instance, are up some 21% this
"Shorting the Internet stocks has not been a healthy thing
to do this year," Mr. Strunk says.
Tice, manager of Prudent Bear Fund, agrees that "you
had to be extraordinarily skilled tactically to do
well" shorting Internet and tech stocks this year.
While Amazon.com has declined, "you had to be out of
the way at the right time" when it was rising.
Moreover, tech stocks tied to personal computers, such as
chip makers Intel and Micron Technology, have shown a
discouraging [to short sellers] resistance, Mr. Tice says.
"Micron fell quite a while, but it rallied significantly
since then," he says. Other managers cite strength in
Dell Computer and Gateway as having tripped them up.
Prudent Bear Fund, a mutual fund that frequently shorts
stocks, had a negative total return of 19% this
One problem that Mr. Tice and other short sellers
complain about: The stocks they are trying to short seem
to run up sharply in a burst of enthusiasm (or,
perhaps, a "short squeeze") right before they decline,
making them difficult to short profitably. Other money
managers complain that their prices seem to run up at the
very end of the day before the close.
short Thang. I'm sorry but the more I read you the more I see your an Amatuer. Which is OK , buy your giving advice and that is wrong. Leave these poor people alone hav'nt they lost enough.
Short Sellers Receive a Break
But Struggle to
By ROBERT MCGOUGH
of THE WALL STREET JOURNAL
Some of the
stocks that short sellers love to hate have finally
declined -- but a lot of these doubting-Thomas investors
have been either too scared, or too broke, to short
The past 4 1/2 years, which have been a boon to so
many investors buying stocks, have been a disaster for
most short sellers, who profit when stocks go down.
Short sellers sell borrowed shares, in the hope they
can buy them back at lower prices and pocket the
difference. Sharply rising stock prices have handed these
"shorts" extensive losses.
Last year, an index of
short-selling managers, compiled by Harry Strunk, an investment
consultant in Palm Beach, Fla., who tracks short-seller
performance, declined 11.51%. The Standard & Poor's 500-stock
index, in contrast, had a total return of 28.58%,
including those teeny dividends that companies pay
nowadays. This year through June, the short-seller index
has fallen an additional 3.87%.
But since the
spring, some of the short sellers' favorite targets,
Internet stocks, have been dropping. Internet-related
stocks are a favorite target of short sellers because of
their sky-high prices relative to sales and, if they
have any, earnings. Yahoo! has fallen from as high as
244 in March to 136 7/16 Friday on the Nasdaq Stock
Market. Shares of eBay have fallen to 97 11/16, also on
Nasdaq, from 234 in late April. America Online has fallen
to 97 1/8 from as high as 175 1/2 in the spring on
the New York Stock Exchange.