From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #1203 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk Content-Transfer-Encoding: quoted-printable X-No-Archive: yes canslim-digest Monday, March 12 2001 Volume 02 : Number 1203 In this issue: [CANSLIM] CSCO at 18 RE: [CANSLIM] CSCO at 18 RE: [CANSLIM] CSCO at 18 RE: [CANSLIM] CSCO at 18 Re: [CANSLIM] CSCO at 18 RE: [CANSLIM] CSCO at 18 Re: [CANSLIM] CSCO at 18 Re: [CANSLIM] From: daily news, yahoo [CANSLIM] shorting RE: [CANSLIM] shorting Re: [CANSLIM] ICUI [CANSLIM] DGO Online RE: [CANSLIM] shorting Re: [CANSLIM] DGO Online RE: [CANSLIM] shorting RE: [CANSLIM] shorting RE: [CANSLIM] shorting (NOT CANSLIM) Re: [CANSLIM] shorting Re: [CANSLIM] shorting Mr. Greenspan (was Re: [CANSLIM] From: daily news, yahoo) RE: [CANSLIM] shorting RE: [CANSLIM] shorting (NOT CANSLIM) ---------------------------------------------------------------------- Date: Mon, 12 Mar 2001 08:06:35 -0800 From: Tim Fisher Subject: [CANSLIM] CSCO at 18 Must be a buy now, huh? Time to double down! Can't get much lower! (note: extreme sarcasm was used in this post) Tim Fisher Ore-Rock-On and Pacific Fishery Biologists WWW Sites Tim@OreRockOn.com WWW: http://OreRockOn.com See naked fish and rocks! - - ------------------------------ Date: Mon, 12 Mar 2001 11:45:10 -0500 From: "Dave Rubin" Subject: RE: [CANSLIM] CSCO at 18 > Must be a buy now, huh? Time to double down! Can't get much lower! > > (note: extreme sarcasm was used in this post) A year from now when the bull is back and Cisco has more than doubled from here people might just be looking back at this as a rare buying opportunity. If I bought more now I'd be averaging up, not down, from a split-adjusted basis of about $0.50 :) Of course, it's not CANSLIM... but it is one of the greatest companies in the world and those with a long-term outlook who don't already own it might want to buy some and put it under their mattress. - - ------------------------------ Date: Mon, 12 Mar 2001 11:56:57 -0500 From: Ed McDonough Subject: RE: [CANSLIM] CSCO at 18 Dave, I like it even better when it hits 10 after its true P/E surfaces. Ed - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Dave Rubin Sent: Monday, March 12, 2001 11:45 AM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] CSCO at 18 > Must be a buy now, huh? Time to double down! Can't get much lower! > > (note: extreme sarcasm was used in this post) A year from now when the bull is back and Cisco has more than doubled from here people might just be looking back at this as a rare buying opportunity. If I bought more now I'd be averaging up, not down, from a split-adjusted basis of about $0.50 :) Of course, it's not CANSLIM... but it is one of the greatest companies in the world and those with a long-term outlook who don't already own it might want to buy some and put it under their mattress. - - - - ------------------------------ Date: Mon, 12 Mar 2001 12:06:47 -0500 From: "Dave Rubin" Subject: RE: [CANSLIM] CSCO at 18 > I like it even better when it hits 10 after its true P/E surfaces. That's what I like to hear. True bearishness! Maybe we will have a bull market again soon. If CSCO at 10 is a fair PE for a company that until recently has been growing over 50% then lots of other tech stocks have a long way to fall. JDSU, BRCM, PMCS, JNPR, and many other former highflyers should go to single digits. - -- Dave - - ------------------------------ Date: Mon, 12 Mar 2001 09:16:42 -0800 (PST) From: John Kruger Subject: Re: [CANSLIM] CSCO at 18 Well, at some point, you can buy the stock, take down the buildings, and sell the bricks – but I don’t think that we are there yet. John (note: mild sarcasm was used in this post) > -----Original Message----- > From: owner-canslim@lists.xmission.com > [mailto:owner-canslim@lists.xmission.com]On Behalf Of Tim Fisher > Sent: Monday, March 12, 2001 8:07 AM > To: canslim@lists.xmission.com > Subject: [CANSLIM] CSCO at 18 > > > Must be a buy now, huh? Time to double down! Can't get much lower! > > (note: extreme sarcasm was used in this post) > > Tim Fisher > Ore-Rock-On and Pacific Fishery Biologists WWW Sites > > Tim@OreRockOn.com > WWW: http://OreRockOn.com > See naked fish and rocks! > __________________________________________________ Do You Yahoo!? Yahoo! Auctions - Buy the things you want at great prices. http://auctions.yahoo.com/ - - ------------------------------ Date: Mon, 12 Mar 2001 12:35:21 -0500 From: Ed McDonough Subject: RE: [CANSLIM] CSCO at 18 Dave, Bull or Bear it doesn't matter. What matters is making money. I'm betting on many single digits until the market tells me otherwise. Thanks ED - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Dave Rubin Sent: Monday, March 12, 2001 12:07 PM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] CSCO at 18 > I like it even better when it hits 10 after its true P/E surfaces. That's what I like to hear. True bearishness! Maybe we will have a bull market again soon. If CSCO at 10 is a fair PE for a company that until recently has been growing over 50% then lots of other tech stocks have a long way to fall. JDSU, BRCM, PMCS, JNPR, and many other former highflyers should go to single digits. - -- Dave - - - - ------------------------------ Date: Mon, 12 Mar 2001 12:40:12 -0500 From: "Robert McGill" Subject: Re: [CANSLIM] CSCO at 18 Anyone shorting at these levels? - ----- Original Message ----- From: "Ed McDonough" To: Sent: Monday, March 12, 2001 12:35 PM Subject: RE: [CANSLIM] CSCO at 18 > Dave, > Bull or Bear it doesn't matter. What matters is making money. I'm betting on > many single digits until the market tells me otherwise. Thanks > ED > > -----Original Message----- > From: owner-canslim@lists.xmission.com > [mailto:owner-canslim@lists.xmission.com]On Behalf Of Dave Rubin > Sent: Monday, March 12, 2001 12:07 PM > To: canslim@lists.xmission.com > Subject: RE: [CANSLIM] CSCO at 18 > > > > > I like it even better when it hits 10 after its true P/E surfaces. > > That's what I like to hear. True bearishness! Maybe we will have a bull > market again soon. > > If CSCO at 10 is a fair PE for a company that until recently has been > growing over 50% then lots of other tech stocks have a long way to fall. > JDSU, BRCM, PMCS, JNPR, and many other former highflyers should go to single > digits. > > -- > Dave > > > - > > - > - - ------------------------------ Date: Mon, 12 Mar 2001 13:41:17 EST From: Spencer48@aol.com Subject: Re: [CANSLIM] From: daily news, yahoo Tom: I think Greenspan's been in Wash. too long. I know that he used to be a firm believer in Ayn Rand's free mkt. economics, but it appears to me that he decided to raise rates just because employment was so high. In other words, despite his toothless dis-advocacy of the Phillips Curve, it seems like he supports its conclusion that high employment leads to inflation. jans - - ------------------------------ Date: Mon, 12 Mar 2001 13:41:56 -0500 From: "Robert McGill" Subject: [CANSLIM] shorting I would like to learn to short stocks. Can someone recommend some reading. I would like to know also how to put limit orders in so I know what price I'm getting. Bob - - ------------------------------ Date: Mon, 12 Mar 2001 13:45:38 -0500 From: David Bojanowski Subject: RE: [CANSLIM] shorting You'd better be VERY VERY careful when shorting stocks. If the stock moves the wrong way you can lose a ton of money. In theory if the stock shoots up after you short it your potential losses are unlimited. If you think a stock is going to fall soon maybe you should purchase put options instead. Buy a beginner book on options and study! If the stock moves the wrong way the most at risk is the purchase price of the put. -----Original Message----- From: Robert McGill [mailto:bmcgillatlcom.ne@mindspring.com] Sent: Monday, March 12, 2001 1:42 PM To: canslim@lists.xmission.com Subject: [CANSLIM] shorting I would like to learn to short stocks. Can someone recommend some reading. I would like to know also how to put limit orders in so I know what price I'm getting. Bob - - - - ------------------------------ Date: Mon, 12 Mar 2001 11:48:00 -0800 From: "Bill Triffet" Subject: Re: [CANSLIM] ICUI This is a multi-part message in MIME format. - ------=_NextPart_000_0062_01C0AAEA.4A1B5BB0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Well Tom? Guess you carry some weight in this market. (g) It's really = breaking out. Looks like the momentum players are hard at work. - -Bill Triffet ----- Original Message -----=20 From: Tom Worley=20 To: canslim@lists.xmission.com=20 Sent: Monday, March 12, 2001 5:37 AM Subject: Re: [CANSLIM] ICUI Chart looks interesting. Got possibilities for those brave enough to = venture into this "M". Management owns 21% still, that's encouraging. = However funds already own 41% of the remaining float. And the weak = earnings growth in the past two quarters would make me want to see the = next quarter to be sure this is not a trend. Tom Worley stkguru@netside.net ICQ # 5568838 ----- Original Message -----=20 From: Vanchee1@aol.com=20 To: canslim@xmission.com=20 Sent: Sunday, March 11, 2001 11:34 PM Subject: [CANSLIM] ICUI ICUI 84/89 B rating, some accumulation taking place on Fri, might be = worth=20 watching this one on Mon and Tues. see what kind (if any) action = might take=20 place.=20 Chris.=20 - ------=_NextPart_000_0062_01C0AAEA.4A1B5BB0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Well Tom? Guess you carry some = weight in this=20 market. (g)  It's really breaking out. Looks like the momentum = players are=20 hard at work.
 
-Bill Triffet
----- Original Message -----
From:=20 Tom = Worley=20
Sent: Monday, March 12, 2001 = 5:37=20 AM
Subject: Re: [CANSLIM] = ICUI

Chart looks interesting. Got possibilities for = those brave=20 enough to venture into this "M". Management owns 21% still, that's=20 encouraging. However funds already own 41% of the remaining = float.  And=20 the weak earnings growth in the past two quarters would make me want = to see=20 the next quarter to be sure this is not a trend.

Tom Worley
stkguru@netside.net
ICQ #=20 5568838
 
 
----- Original Message -----
From:=20 Vanchee1@aol.com
Sent: Sunday, March 11, 2001 = 11:34=20 PM
Subject: [CANSLIM] ICUI

ICUI = 84/89 B rating,=20 some accumulation taking place on Fri, might be worth
watching = this one=20 on Mon and Tues. see what kind (if any) action might take
place. =

Chris. =
- ------=_NextPart_000_0062_01C0AAEA.4A1B5BB0-- - - ------------------------------ Date: Mon, 12 Mar 2001 12:08:33 -0800 (PST) From: Steve F Subject: [CANSLIM] DGO Online Thank you, Tom Worley. I just saved about $200 with your tip on getting DGO On-line at a discount rate if I buy the print graph books. I had been paying the full frieght for about two years. __________________________________________________ Do You Yahoo!? Yahoo! Auctions - Buy the things you want at great prices. http://auctions.yahoo.com/ - - ------------------------------ Date: Mon, 12 Mar 2001 15:14:59 -0500 From: "Rick Parsons" Subject: RE: [CANSLIM] shorting I don't see shorting as much different or more risky from buying long. If you go short, you need to set a "buy to cover" limit order to protect yourself just as you would set a stop loss on a long buy. TradingMarkets.com has a lot of lessons or courses that deal with shorting stocks. Rick - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of David Bojanowski Sent: Monday, March 12, 2001 1:46 PM To: 'canslim@lists.xmission.com' Subject: RE: [CANSLIM] shorting You'd better be VERY VERY careful when shorting stocks. If the stock moves the wrong way you can lose a ton of money. In theory if the stock shoots up after you short it your potential losses are unlimited. If you think a stock is going to fall soon maybe you should purchase put options instead. Buy a beginner book on options and study! If the stock moves the wrong way the most at risk is the purchase price of the put. -----Original Message----- From: Robert McGill [mailto:bmcgillatlcom.ne@mindspring.com] Sent: Monday, March 12, 2001 1:42 PM To: canslim@lists.xmission.com Subject: [CANSLIM] shorting I would like to learn to short stocks. Can someone recommend some reading. I would like to know also how to put limit orders in so I know what price I'm getting. Bob - - - - - - ------------------------------ Date: Mon, 12 Mar 2001 13:54:32 -0800 From: Tim Fisher Subject: Re: [CANSLIM] DGO Online Hey Tom you should charge a rip for that! On 12:08 PM 3/12/01, Steve F Said: >Thank you, Tom Worley. I just saved about $200 with >your tip on getting DGO On-line at a discount rate if >I buy the print graph books. I had been paying the >full frieght for about two years. > >__________________________________________________ >Do You Yahoo!? >Yahoo! Auctions - Buy the things you want at great prices. >http://auctions.yahoo.com/ Tim Fisher Ore-Rock-On and Pacific Fishery Biologists WWW Sites Tim@OreRockOn.com WWW: http://OreRockOn.com See naked fish and rocks! - - ------------------------------ Date: Mon, 12 Mar 2001 14:00:41 -0800 From: Tim Fisher Subject: RE: [CANSLIM] shorting I normally don't think too much of the Motley Fool, but the chapter on shorting in their book debunks your math (not you Rick). Your broker will not let you lose double your short position, they will call your shares in before that, in that respect you can lose it all just like going long. There is no more inherent risk to shorting other than you are playing against the crowd, and so are hamstrung from the start. Brokers can and do discriminate against shorts (i.e. calls, no shorting on margin, can't find a seller, must have an uptick, etc). On 12:14 PM 3/12/01, Rick Parsons Said: >I don't see shorting as much different or more risky from buying long. If >you go short, you need to set a "buy to cover" limit order to protect >yourself just as you would set a stop loss on a long buy. >TradingMarkets.com has a lot of lessons or courses that deal with shorting >stocks. > >Rick > > >-----Original Message----- >From: owner-canslim@lists.xmission.com >[mailto:owner-canslim@lists.xmission.com]On Behalf Of David Bojanowski >Sent: Monday, March 12, 2001 1:46 PM >To: 'canslim@lists.xmission.com' >Subject: RE: [CANSLIM] shorting > > >You'd better be VERY VERY careful when shorting stocks. If the stock moves >the wrong way you can lose a ton of money. In theory if the stock shoots up >after you short it your potential losses are unlimited. If you think a >stock is going to fall soon maybe you should purchase put options instead. >Buy a beginner book on options and study! If the stock moves the wrong way >the most at risk is the purchase price of the put. > > -----Original Message----- >From: Robert McGill [mailto:bmcgillatlcom.ne@mindspring.com] >Sent: Monday, March 12, 2001 1:42 PM >To: canslim@lists.xmission.com >Subject: [CANSLIM] shorting > >I would like to learn to short stocks. Can someone recommend some reading. >I would like to know also how to put limit orders in so I know what price >I'm getting. Bob > > >- > >- > > >- Tim Fisher Ore-Rock-On and Pacific Fishery Biologists WWW Sites Tim@OreRockOn.com WWW: http://OreRockOn.com See naked fish and rocks! - - ------------------------------ Date: Mon, 12 Mar 2001 14:01:50 -0800 From: Tim Fisher Subject: RE: [CANSLIM] shorting P.S. Can't short in 401k's or IRAs either. The IRS also follows the conventional (dumb) non-logic. On 12:14 PM 3/12/01, Rick Parsons Said: >I don't see shorting as much different or more risky from buying long. If >you go short, you need to set a "buy to cover" limit order to protect >yourself just as you would set a stop loss on a long buy. >TradingMarkets.com has a lot of lessons or courses that deal with shorting >stocks. > >Rick > > >-----Original Message----- >From: owner-canslim@lists.xmission.com >[mailto:owner-canslim@lists.xmission.com]On Behalf Of David Bojanowski >Sent: Monday, March 12, 2001 1:46 PM >To: 'canslim@lists.xmission.com' >Subject: RE: [CANSLIM] shorting > > >You'd better be VERY VERY careful when shorting stocks. If the stock moves >the wrong way you can lose a ton of money. In theory if the stock shoots up >after you short it your potential losses are unlimited. If you think a >stock is going to fall soon maybe you should purchase put options instead. >Buy a beginner book on options and study! If the stock moves the wrong way >the most at risk is the purchase price of the put. > > -----Original Message----- >From: Robert McGill [mailto:bmcgillatlcom.ne@mindspring.com] >Sent: Monday, March 12, 2001 1:42 PM >To: canslim@lists.xmission.com >Subject: [CANSLIM] shorting > >I would like to learn to short stocks. Can someone recommend some reading. >I would like to know also how to put limit orders in so I know what price >I'm getting. Bob > > >- > >- > > >- Tim Fisher Ore-Rock-On and Pacific Fishery Biologists WWW Sites Tim@OreRockOn.com WWW: http://OreRockOn.com See naked fish and rocks! - - ------------------------------ Date: Mon, 12 Mar 2001 17:03:16 -0500 From: David Bojanowski Subject: RE: [CANSLIM] shorting (NOT CANSLIM) Like I said "in theory" you can lose a lot of money. And unless it's a written policy for a broker to call in the short shares after the short position doubles I wouldn't assume that the broker is watching your back for you. Anyway I've never shorted a stock before and only mentioned the puts as another option (no pun intended). -----Original Message----- From: Tim Fisher [mailto:Tim@OreRockOn.com] Sent: Monday, March 12, 2001 5:01 PM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] shorting I normally don't think too much of the Motley Fool, but the chapter on shorting in their book debunks your math (not you Rick). Your broker will not let you lose double your short position, they will call your shares in before that, in that respect you can lose it all just like going long. There is no more inherent risk to shorting other than you are playing against the crowd, and so are hamstrung from the start. Brokers can and do discriminate against shorts (i.e. calls, no shorting on margin, can't find a seller, must have an uptick, etc). On 12:14 PM 3/12/01, Rick Parsons Said: >I don't see shorting as much different or more risky from buying long. If >you go short, you need to set a "buy to cover" limit order to protect >yourself just as you would set a stop loss on a long buy. >TradingMarkets.com has a lot of lessons or courses that deal with shorting >stocks. > >Rick > > >-----Original Message----- >From: owner-canslim@lists.xmission.com >[mailto:owner-canslim@lists.xmission.com]On Behalf Of David Bojanowski >Sent: Monday, March 12, 2001 1:46 PM >To: 'canslim@lists.xmission.com' >Subject: RE: [CANSLIM] shorting > > >You'd better be VERY VERY careful when shorting stocks. If the stock moves >the wrong way you can lose a ton of money. In theory if the stock shoots up >after you short it your potential losses are unlimited. If you think a >stock is going to fall soon maybe you should purchase put options instead. >Buy a beginner book on options and study! If the stock moves the wrong way >the most at risk is the purchase price of the put. > > -----Original Message----- >From: Robert McGill [mailto:bmcgillatlcom.ne@mindspring.com] >Sent: Monday, March 12, 2001 1:42 PM >To: canslim@lists.xmission.com >Subject: [CANSLIM] shorting > >I would like to learn to short stocks. Can someone recommend some reading. >I would like to know also how to put limit orders in so I know what price >I'm getting. Bob > > >- > >- > > >- Tim Fisher Ore-Rock-On and Pacific Fishery Biologists WWW Sites Tim@OreRockOn.com WWW: http://OreRockOn.com See naked fish and rocks! - - - - ------------------------------ Date: Mon, 12 Mar 2001 18:05:24 -0500 From: "Tom Worley" Subject: Re: [CANSLIM] shorting I must disagree with you on this, Tim. Shorting is extremely high risk, and should only be done by very experienced persons with a short term trading personality (even if they end up holding the position for mid or even long term). They must be able to watch the markets more closely, and move faster. They should also have a far higher than normal risk tolerance, and the capital to afford the losses. As for the potential for huge losses, it's real. The broker dealer cannot simply buy in your short position. There are rules that must be followed. The normal margin rules apply, first the equity in the account must drop below a set level, most typically 30 to 35%. Second, the client must be notified of this, and has three business days to increase the equity percent back over 50% (Reg T). I have seen more than one acct that was shorting drop to 20% or less in a single day, thus triggering both a Fed call (must be met in one day) as well as a Reg T call. By the deadline, the acct had a negative value, the client not only had lost everything, but had to add money just to get back to zero. Certainly this is not good risk control / capital preservation. But how many of us have violated rules on selling when we shouldn't, or were just out of touch with the markets for a day or so? If you are buying decent stocks, even on margin, you can still lose money. But it is unlikely that any of the stocks would fall all the way to zero, even if you ignored them for an extended period. There is also an added and unique extra risk with shorting. If the shares loaned to you by your brokerage house are taken back by the actual owner (he sells them, he transfers the acct to a different firm, he has the certificate sent to him, or at some firms takes them off margin and puts them in his cash acct, for example), then you are forced to buy in those shares unless the b/d can find someone else to loan them to you. If a stock is already heavily shorted, often there are no more to borrow. And since Murphy's Law works better in the securities industry than in any other industry I have seen, it will undoubtedly happen at the worst possible time. If someone is really convinced that a stock or an index is going south, then I support the suggestion they learn about buying put options. Paying the premium that typically exists on options can be cheaper, and sets a max and definable loss amount. BTW, you can only short on margin, that's one of the reasons why shorting in a tax sheltered acct is not permissible. And what you describe as discriminating I simply see as knowing the rules. Plus, brokerage houses and the Fed Reserve can set higher than normal margin limits for buying long positions on highly volatile stocks. One thing I don't like about shorting is the different rules for opening the short position between Naz and the listed exchanges (Naz requires an actual improvement in the quoted bid while NYSE/AMEX only require an uptick). From my experience both as a stock broker as well as my years in the "back office" (where I could see every account), the greatest losses that occurred were on accts that were shorting. The next greatest was on accts buying on margin. Somewhere in there were the accts that were day trading or trading very short term, often because of high transaction costs. Tom Worley stkguru@netside.net ICQ # 5568838 - ----- Original Message ----- From: Tim Fisher To: Sent: Monday, March 12, 2001 5:00 PM Subject: RE: [CANSLIM] shorting I normally don't think too much of the Motley Fool, but the chapter on shorting in their book debunks your math (not you Rick). Your broker will not let you lose double your short position, they will call your shares in before that, in that respect you can lose it all just like going long. There is no more inherent risk to shorting other than you are playing against the crowd, and so are hamstrung from the start. Brokers can and do discriminate against shorts (i.e. calls, no shorting on margin, can't find a seller, must have an uptick, etc). On 12:14 PM 3/12/01, Rick Parsons Said: >I don't see shorting as much different or more risky from buying long. If >you go short, you need to set a "buy to cover" limit order to protect >yourself just as you would set a stop loss on a long buy. >TradingMarkets.com has a lot of lessons or courses that deal with shorting >stocks. > >Rick > > >-----Original Message----- >From: owner-canslim@lists.xmission.com >[mailto:owner-canslim@lists.xmission.com]On Behalf Of David Bojanowski >Sent: Monday, March 12, 2001 1:46 PM >To: 'canslim@lists.xmission.com' >Subject: RE: [CANSLIM] shorting > > >You'd better be VERY VERY careful when shorting stocks. If the stock moves >the wrong way you can lose a ton of money. In theory if the stock shoots up >after you short it your potential losses are unlimited. If you think a >stock is going to fall soon maybe you should purchase put options instead. >Buy a beginner book on options and study! If the stock moves the wrong way >the most at risk is the purchase price of the put. > > -----Original Message----- >From: Robert McGill [mailto:bmcgillatlcom.ne@mindspring.com] >Sent: Monday, March 12, 2001 1:42 PM >To: canslim@lists.xmission.com >Subject: [CANSLIM] shorting > >I would like to learn to short stocks. Can someone recommend some reading. >I would like to know also how to put limit orders in so I know what price >I'm getting. Bob > > >- > >- > > >- Tim Fisher Ore-Rock-On and Pacific Fishery Biologists WWW Sites Tim@OreRockOn.com WWW: http://OreRockOn.com See naked fish and rocks! - - - - ------------------------------ Date: Mon, 12 Mar 2001 18:16:26 -0500 From: "Robert McGill" Subject: Re: [CANSLIM] shorting You convinced me. - ----- Original Message ----- From: "Tom Worley" To: Sent: Monday, March 12, 2001 6:05 PM Subject: Re: [CANSLIM] shorting > I must disagree with you on this, Tim. Shorting is extremely > high risk, and should only be done by very experienced persons > with a short term trading personality (even if they end up > holding the position for mid or even long term). They must be > able to watch the markets more closely, and move faster. They > should also have a far higher than normal risk tolerance, and the > capital to afford the losses. > > As for the potential for huge losses, it's real. The broker > dealer cannot simply buy in your short position. There are rules > that must be followed. The normal margin rules apply, first the > equity in the account must drop below a set level, most typically > 30 to 35%. Second, the client must be notified of this, and has > three business days to increase the equity percent back over 50% > (Reg T). I have seen more than one acct that was shorting drop to > 20% or less in a single day, thus triggering both a Fed call > (must be met in one day) as well as a Reg T call. By the > deadline, the acct had a negative value, the client not only had > lost everything, but had to add money just to get back to zero. > > Certainly this is not good risk control / capital preservation. > But how many of us have violated rules on selling when we > shouldn't, or were just out of touch with the markets for a day > or so? If you are buying decent stocks, even on margin, you can > still lose money. But it is unlikely that any of the stocks would > fall all the way to zero, even if you ignored them for an > extended period. > > There is also an added and unique extra risk with shorting. If > the shares loaned to you by your brokerage house are taken back > by the actual owner (he sells them, he transfers the acct to a > different firm, he has the certificate sent to him, or at some > firms takes them off margin and puts them in his cash acct, for > example), then you are forced to buy in those shares unless the > b/d can find someone else to loan them to you. If a stock is > already heavily shorted, often there are no more to borrow. And > since Murphy's Law works better in the securities industry than > in any other industry I have seen, it will undoubtedly happen at > the worst possible time. > > If someone is really convinced that a stock or an index is going > south, then I support the suggestion they learn about buying put > options. Paying the premium that typically exists on options can > be cheaper, and sets a max and definable loss amount. > > BTW, you can only short on margin, that's one of the reasons why > shorting in a tax sheltered acct is not permissible. And what you > describe as discriminating I simply see as knowing the rules. > Plus, brokerage houses and the Fed Reserve can set higher than > normal margin limits for buying long positions on highly volatile > stocks. One thing I don't like about shorting is the different > rules for opening the short position between Naz and the listed > exchanges (Naz requires an actual improvement in the quoted bid > while NYSE/AMEX only require an uptick). > > From my experience both as a stock broker as well as my years in > the "back office" (where I could see every account), the greatest > losses that occurred were on accts that were shorting. The next > greatest was on accts buying on margin. Somewhere in there were > the accts that were day trading or trading very short term, often > because of high transaction costs. > > Tom Worley > stkguru@netside.net > ICQ # 5568838 > > > ----- Original Message ----- > From: Tim Fisher > To: > Sent: Monday, March 12, 2001 5:00 PM > Subject: RE: [CANSLIM] shorting > > > I normally don't think too much of the Motley Fool, but the > chapter on > shorting in their book debunks your math (not you Rick). Your > broker will > not let you lose double your short position, they will call your > shares in > before that, in that respect you can lose it all just like going > long. > There is no more inherent risk to shorting other than you are > playing > against the crowd, and so are hamstrung from the start. Brokers > can and do > discriminate against shorts (i.e. calls, no shorting on margin, > can't find > a seller, must have an uptick, etc). > > On 12:14 PM 3/12/01, Rick Parsons Said: > >I don't see shorting as much different or more risky from buying > long. If > >you go short, you need to set a "buy to cover" limit order to > protect > >yourself just as you would set a stop loss on a long buy. > >TradingMarkets.com has a lot of lessons or courses that deal > with shorting > >stocks. > > > >Rick > > > > > >-----Original Message----- > >From: owner-canslim@lists.xmission.com > >[mailto:owner-canslim@lists.xmission.com]On Behalf Of David > Bojanowski > >Sent: Monday, March 12, 2001 1:46 PM > >To: 'canslim@lists.xmission.com' > >Subject: RE: [CANSLIM] shorting > > > > > >You'd better be VERY VERY careful when shorting stocks. If the > stock moves > >the wrong way you can lose a ton of money. In theory if the > stock shoots up > >after you short it your potential losses are unlimited. If you > think a > >stock is going to fall soon maybe you should purchase put > options instead. > >Buy a beginner book on options and study! If the stock moves > the wrong way > >the most at risk is the purchase price of the put. > > > > -----Original Message----- > >From: Robert McGill [mailto:bmcgillatlcom.ne@mindspring.com] > >Sent: Monday, March 12, 2001 1:42 PM > >To: canslim@lists.xmission.com > >Subject: [CANSLIM] shorting > > > >I would like to learn to short stocks. Can someone recommend > some reading. > >I would like to know also how to put limit orders in so I know > what price > >I'm getting. Bob > > > > > >- > > > >- > > > > > >- > > Tim Fisher > Ore-Rock-On and Pacific Fishery Biologists WWW Sites > > Tim@OreRockOn.com > WWW: http://OreRockOn.com > See naked fish and rocks! > > > - > > > > - > - - ------------------------------ Date: Mon, 12 Mar 2001 18:21:34 -0500 From: "Tom Worley" Subject: Mr. Greenspan (was Re: [CANSLIM] From: daily news, yahoo) I don't think his stay in Washington has much to do with it. He has successfully remained very apolitical for all these years. But employment had been historically very high for a very long time when he raised rates the first time, largely offset and neutralized by the continued high productivity improvements. When he raised rates the first time, altho it was a surprise to some / many, I was satisfied that there was clear evidence of building inflationary pressures. When you try to understand the FOMC actions, it is important to remember they are looking forward 8 to 12 months, based on current data and recent trends. What may appear to be a minor trend today can become a major problem in that time span. Do I think he raised rates too much, yes. The last one was not required, tho possibly justified in his eyes (and data). Do I think he waited too long to reverse that last cut, also yes. I don't think he anticipated just how far, and to the magnitude, that internet stocks would crumble. But then, a lot of investors and financial managers made the same mistake. I also don't think he anticipated just how fast the rapid economic growth would slow. With two thirds roughly of the economy dependent on consumer spending, it didn't take a big drop in consumer sentiment to snap their wallets closed. Now he is forced to rely on a political action (tax cut bill) to help his cuts to re-ignite the economic expansion to sustainable levels. If he cuts too much, he will end up with the same problem in reverse, having to hike (and scare the markets) in order to offset too much cutting. Tom Worley stkguru@netside.net ICQ # 5568838 - ----- Original Message ----- From: To: Sent: Monday, March 12, 2001 1:41 PM Subject: Re: [CANSLIM] From: daily news, yahoo Tom: I think Greenspan's been in Wash. too long. I know that he used to be a firm believer in Ayn Rand's free mkt. economics, but it appears to me that he decided to raise rates just because employment was so high. In other words, despite his toothless dis-advocacy of the Phillips Curve, it seems like he supports its conclusion that high employment leads to inflation. jans - - - - ------------------------------ Date: Mon, 12 Mar 2001 16:37:08 -0700 From: "Patrick Wahl" Subject: RE: [CANSLIM] shorting My main problem with shorting is that you don't get the same setups you get when going long. Stocks don't base and then break down out of a base, usually anyway. They tend to gap down on bad news, and frequently a significant part of the move cannot be caught, its just an air pocket. Of course, we are all now looking at charts that have come out of the worst bear market in nasdaq history and it all looks pretty easy, but usually its not an easy thing to do. On 12 Mar 01, at 15:14, Rick Parsons wrote: > I don't see shorting as much different or more risky from buying long. If > you go short, you need to set a "buy to cover" limit order to protect > yourself just as you would set a stop loss on a long buy. > TradingMarkets.com has a lot of lessons or courses that deal with shorting > stocks. > > Rick > > > -----Original Message----- > From: owner-canslim@lists.xmission.com > [mailto:owner-canslim@lists.xmission.com]On Behalf Of David Bojanowski > Sent: Monday, March 12, 2001 1:46 PM > To: 'canslim@lists.xmission.com' > Subject: RE: [CANSLIM] shorting > > > You'd better be VERY VERY careful when shorting stocks. If the stock moves > the wrong way you can lose a ton of money. In theory if the stock shoots up > after you short it your potential losses are unlimited. If you think a > stock is going to fall soon maybe you should purchase put options instead. > Buy a beginner book on options and study! If the stock moves the wrong way > the most at risk is the purchase price of the put. > > -----Original Message----- > From: Robert McGill [mailto:bmcgillatlcom.ne@mindspring.com] > Sent: Monday, March 12, 2001 1:42 PM > To: canslim@lists.xmission.com > Subject: [CANSLIM] shorting > > I would like to learn to short stocks. Can someone recommend some reading. > I would like to know also how to put limit orders in so I know what price > I'm getting. Bob > > > - > > - > > > - > - - ------------------------------ Date: Mon, 12 Mar 2001 19:22:51 -0500 From: "Rick Parsons" Subject: RE: [CANSLIM] shorting (NOT CANSLIM) Here is another point of view from "On The Money" As investors we are all concerned about when this downward spiral is going to end and what the ramifications of this will be when we finally do hit rock bottom. Frankly, at the rate of speed of the descent, which is now picking up momentum it won't take long now to push the majority of stocks in the Nasdaq below book value. We are seeing a real bloodbath on strong volume. Margin debt is being forced to unwind real fast now as panic selling grips the market. These are all the signs that a major market bottom can't be too far off now. If you are short the market I strongly recommend you start reducing your short exposure because once this market does bottom all the shorts will be hitting the exit at the same time and a lot of speculators are going to have their heads cut off. Frankly, this is no time to be speculating on the market in either direction. Rick - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of David Bojanowski Sent: Monday, March 12, 2001 5:03 PM To: 'canslim@lists.xmission.com' Subject: RE: [CANSLIM] shorting (NOT CANSLIM) Like I said "in theory" you can lose a lot of money. And unless it's a written policy for a broker to call in the short shares after the short position doubles I wouldn't assume that the broker is watching your back for you. Anyway I've never shorted a stock before and only mentioned the puts as another option (no pun intended). -----Original Message----- From: Tim Fisher [mailto:Tim@OreRockOn.com] Sent: Monday, March 12, 2001 5:01 PM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] shorting I normally don't think too much of the Motley Fool, but the chapter on shorting in their book debunks your math (not you Rick). Your broker will not let you lose double your short position, they will call your shares in before that, in that respect you can lose it all just like going long. There is no more inherent risk to shorting other than you are playing against the crowd, and so are hamstrung from the start. Brokers can and do discriminate against shorts (i.e. calls, no shorting on margin, can't find a seller, must have an uptick, etc). On 12:14 PM 3/12/01, Rick Parsons Said: >I don't see shorting as much different or more risky from buying long. If >you go short, you need to set a "buy to cover" limit order to protect >yourself just as you would set a stop loss on a long buy. >TradingMarkets.com has a lot of lessons or courses that deal with shorting >stocks. > >Rick > > >-----Original Message----- >From: owner-canslim@lists.xmission.com >[mailto:owner-canslim@lists.xmission.com]On Behalf Of David Bojanowski >Sent: Monday, March 12, 2001 1:46 PM >To: 'canslim@lists.xmission.com' >Subject: RE: [CANSLIM] shorting > > >You'd better be VERY VERY careful when shorting stocks. If the stock moves >the wrong way you can lose a ton of money. In theory if the stock shoots up >after you short it your potential losses are unlimited. If you think a >stock is going to fall soon maybe you should purchase put options instead. >Buy a beginner book on options and study! If the stock moves the wrong way >the most at risk is the purchase price of the put. > > -----Original Message----- >From: Robert McGill [mailto:bmcgillatlcom.ne@mindspring.com] >Sent: Monday, March 12, 2001 1:42 PM >To: canslim@lists.xmission.com >Subject: [CANSLIM] shorting > >I would like to learn to short stocks. Can someone recommend some reading. >I would like to know also how to put limit orders in so I know what price >I'm getting. Bob > > >- > >- > > >- Tim Fisher Ore-Rock-On and Pacific Fishery Biologists WWW Sites Tim@OreRockOn.com WWW: http://OreRockOn.com See naked fish and rocks! - - - - - - ------------------------------ End of canslim-digest V2 #1203 ****************************** To unsubscribe to canslim-digest, send an email to "majordomo@xmission.com" with "unsubscribe canslim-digest" in the body of the message. For information on digests or retrieving files and old messages send "help" to the same address. Do not use quotes in your message.