Go to Jeff Salisbury LWGate Home Page.From: Inn Ooi <iooi@everestkc.net>
Subject: Re: [CANSLIM] Shorting & Dividends
Date: Sun, 24 Nov 2002 13:49:57 -0600
Previous Article (by Subject): Re: [CANSLIM] OK Show me BIG MONEY "Katherine Malm"
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Someone mentioned about short sellers having to pay dividends, wouldn't =
stock price trading down at x-dividend date take care of this to a =
certain degree, so the net effect would be nil (assuming one covers that =
same day?)
- --- Original Message -----=20
From: David Taggart=20
To: canslim@lists.xmission.com=20
Sent: Friday, November 22, 2002 7:09 PM
Subject: RE: [CANSLIM] Shorting
Gene,
I think that really the only concept that shorters NEED to know well =
is risk control. Luckily most people that finally wake up and see the =
light (actually are willing to short) realize that. For that matter =
Risk control is about the only thing that is imperative in any =
investment/trading method. Risk aside I think inverted CANSLIM works =
like a champ. I add and take away a few things but mainly I like it to =
have huge debt levels. I made some money on a few cable companies back =
in the Adelphia days. Unfortunately I was only short two stocks and I =
got out of one way to early the other one I made some good money on =
though. I also don't require a stock to be above $12 for a short. I =
only require it to be above $6 though I have shorted a few right above =
$5. Another point on shorts is that while numbers like 50 and 100 might =
be resistance for longs it is for a purely psychological reason. But on =
the way down stocks have two important levels $10 and $5 A lot of =
pension funds and some other institutional types are not allowed to hold =
stocks that are under $10 so a lot of times it is a good area to take =
some profits because they tend to support them for a time. $5 is a =
strong level because once they are below $5 they aren't marginable so a =
lot of holders have to sell. So it is an area to be watched both for =
people trying to support the stock and for when it breaks below a lot of =
times it will go $.50-1.00 the same day due to all of the selling.
Fundamentally I mentioned High Debt levels. I also like (actually =
require) large institutional holdings like above 60% and ideally above =
80%. One thing I heard from Cramer once that made sense (actually about =
the only thing that has made sense from his mouth) is that you can look =
at the holdings for Janus funds and if it is a large holding in their =
portfolios then it is a good shorting idea because they have had to sell =
a ton to meet redemptions. Of course Janus isn't the only fund company =
that has seen way better days. =20
Some people that get in the news sometimes that are worth reading =
regarding shorting are the guys at Gotham Partners, they do some awesome =
research so when they go short they are usually right. David Rocker is =
also a good short seller. Bill Fleckenstein is good too but his column =
is TOO negative for me as opposed to him I don't think the world will =
end next week. If you are a member of Tradingmarkets I love Mark =
Bouchers stuff on trading and he has somne great criteria for shorting. =
Another person who you get to hear from on occasion in the news in =
Ahtmet Okomus he is a smart guy and really does his homework. In =
general Short-Sellers are better at their homework than the long side =
crowd.
But like I said at the beginning Risk Control is the most important =
part of trading short or long so I would obviously stress that.
Another thing I just remembered is that many people think that you can =
only make 100% on a short. That is not true. As the stock drops your =
equity grows so you can short more and more as it goes down while =
staying at the same margin level.
Good Luck,
David Taggart
-----Original Message-----
From: owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com] On Behalf Of Gene Ricci
Sent: Friday, November 22, 2002 1:16 PM
To: canslim@lists.xmission.com
Subject: [CANSLIM] Shorting
I'm trying to develop a training module on shorting for our local user =
group and want to start with an outline. I would really appreciate your =
inputs on the minimum concepts that an investor must know before adding =
shorting to their bag of tricks?
Thanks in advance,
Gene
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<DIV><FONT face=3DArial size=3D2>Someone mentioned about short sellers =
having to pay=20
dividends, wouldn't stock price trading down at x-dividend date =
take care=20
of this to a certain degree, so the net effect would be nil =
(assuming one=20
covers that same day?)</FONT></DIV>
<DIV>--- Original Message ----- </DIV>
<BLOCKQUOTE dir=3Dltr=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A title=3Ddctag@mavericktrading.com=20
href=3D"mailto:dctag@mavericktrading.com">David Taggart</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A =
title=3Dcanslim@lists.xmission.com=20
=
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Friday, November 22, 2002 =
7:09=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> RE: [CANSLIM] =
Shorting</DIV>
<DIV><BR></DIV>
<DIV class=3DSection1>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial">Gene,</SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial"></SPAN></FONT> </P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: Arial">I think =
that really=20
the only concept that shorters NEED to know well is risk =
control. =20
Luckily most people that finally wake up and see the light (actually =
are=20
willing to short) realize that. For that matter Risk =
control is=20
about the only thing that is imperative in any investment/trading=20
method. Risk aside I think inverted CANSLIM works like a=20
champ. I add and take away a few things but mainly I like it to =
have=20
huge debt levels. I made some money on a few cable companies =
back in the=20
Adelphia days. Unfortunately I was only short two stocks and I =
got out=20
of one way to early the other one I made some good money on =
though. I=20
also don=92t require a stock to be above $12 for a short. I only =
require=20
it to be above $6 though I have shorted a few right above $5. =
Another=20
point on shorts is that while numbers like 50 and 100 might be =
resistance for=20
longs it is for a purely psychological reason. But on the way =
down=20
stocks have two important levels $10 and $5 A lot of pension =
funds and=20
some other institutional types are not allowed to hold stocks that are =
under=20
$10 so a lot of times it is a good area to take some profits because =
they tend=20
to support them for a time. $5 is a strong level because once =
they are=20
below $5 they aren=92t marginable so a lot of holders have to =
sell. So it=20
is an area to be watched both for people trying to support the stock =
and for=20
when it breaks below a lot of times it will go $.50-1.00 the same day =
due to=20
all of the selling.</SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial"></SPAN></FONT> </P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial">Fundamentally I=20
mentioned High Debt levels. I also like (actually require) large =
institutional holdings like above 60% and ideally above 80%. One =
thing I=20
heard from Cramer once that made sense (actually about the only thing =
that has=20
made sense from his mouth) is that you can look at the holdings for =
Janus=20
funds and if it is a large holding in their portfolios then it is a =
good=20
shorting idea because they have had to sell a ton to meet redemptions. =
Of=20
course Janus isn=92t the only fund company that has seen way better =
days. =20
</SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial"></SPAN></FONT> </P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: Arial">Some people =
that get=20
in the news sometimes that are worth reading regarding shorting are =
the guys=20
at Gotham Partners, they do some awesome research so when they go =
short they=20
are usually right. David Rocker is also a good short =
seller. Bill=20
Fleckenstein is good too but his column is TOO negative for me =
as=20
opposed to him I don=92t think the world will end next week. If =
you are a=20
member of Tradingmarkets I love Mark Bouchers stuff on trading and he =
has=20
somne great criteria for shorting. Another person who you get to =
hear=20
from on occasion in the news in Ahtmet Okomus he is a smart guy and =
really=20
does his homework. In general Short-Sellers are better at their =
homework=20
than the long side crowd.</SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial"></SPAN></FONT> </P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: Arial">But like I =
said at=20
the beginning Risk Control is the most important part of trading short =
or long=20
so I would obviously stress that.</SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial"></SPAN></FONT> </P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: Arial">Another =
thing I just=20
remembered is that many people think that you can only make 100% on a=20
short. That is not true. As the stock drops your equity =
grows so=20
you can short more and more as it goes down while staying at the same =
margin=20
level.</SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial"></SPAN></FONT> </P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial"></SPAN></FONT> </P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: Arial">Good=20
Luck,</SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: Arial">David=20
Taggart</SPAN></FONT></P>
<P class=3DMsoNormal><FONT face=3DArial color=3Dnavy size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; COLOR: navy; FONT-FAMILY: =
Arial"></SPAN></FONT> </P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3DTahoma =
size=3D2><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: Tahoma">-----Original=20
Message-----<BR><B><SPAN style=3D"FONT-WEIGHT: bold">From:</SPAN></B>=20
owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com]=20
<B><SPAN style=3D"FONT-WEIGHT: bold">On Behalf Of </SPAN></B>Gene=20
Ricci<BR><B><SPAN style=3D"FONT-WEIGHT: bold">Sent:</SPAN></B> Friday, =
November=20
22, 2002 1:16 PM<BR><B><SPAN style=3D"FONT-WEIGHT: =
bold">To:</SPAN></B>=20
canslim@lists.xmission.com<BR><B><SPAN=20
style=3D"FONT-WEIGHT: bold">Subject:</SPAN></B> [CANSLIM]=20
Shorting</SPAN></FONT></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 0.5in"><FONT face=3D"Times =
New Roman"=20
size=3D3><SPAN style=3D"FONT-SIZE: 12pt"></SPAN></FONT> </P>
<DIV>
<P class=3DMsoNormal=20
style=3D"MARGIN-BOTTOM: 12pt; MARGIN-LEFT: 0.5in; MARGIN-RIGHT: =
0in"><FONT=20
face=3D"Comic Sans MS" size=3D3><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Comic Sans MS'">I'm trying to =
develop a=20
training module on shorting for our local user group and want to start =
with an=20
outline. I would really appreciate your inputs on the minimum =
concepts=20
that an investor must know before adding shorting to their bag of=20
tricks?<BR><BR>Thanks in=20
advance,<BR>Gene</SPAN></FONT></P></DIV></DIV></BLOCKQUOTE></BODY></HTML>=
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