At 17:33 08/12/2003 -0500, David J Patrick wrote:
JoeHill wrote: [snip]
I think it's a good time to start selling any SCO stock you own... [snip] That begs the question; are there any investment wizards in the group who know how to "short" a stock and, thus" reap the reward for predicting SCOs (and soon enough M$s) swan dive ?
Shorting a stock is not difficult or require great financial wizardry. You just issue a sell order with your broker without owning any stock. Your broker in turn borrows the stock from someone who already owns it. You make money if the stock drops enough to cover your transaction costs and then some but only if you put in a buy order to negate your previous sell order. You will in all likelihood have to put up substantial margin though. Keep in mind a few things. First, there are people who trade stocks for a living and they have access at the very least to the same information you do. The current price for SCOX reflects their expectations. Second, another company coming along and taking SCO out might dash your dreams of becoming rich, rich, rich. Third, you have to analyze the risk/reward ratio. If the risk free yield is 3% today, you have to do much better than 3%, how much better is up to you, in order to make it worthwhile. Finally, unless you do this for a living, the odds are against you that you will make money doing this. You should avoid speculating with money that you cannot afford to lose. In other words, if you feel confident that this is a winning strategy, and you have analyzed the risk/reward ratio and determined that it is acceptable to you, and you are doing this with money you can afford to lose, by all means, go for it. Otherwise, you are just another sheep waiting to be sheared by the pros in the business.
Should we get a group thing going ?
If you feel that strongly that shorting SCOX or MSFT is a good move, why wait for anyone else? You don't need a "group" to do this.
hmmmm ? djp
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