posted
Looking for stocks to short w/ high short interest and trading near highs. Just recently shorted shares of AAPL at 41 still didn't cover because I thnk it may drop lower.
IP: Logged |
<shorting>
unregistered
posted
May 2, 2005 (FinancialWire) Companies on the U.S. Securities and Exchange Commission Regulation SHO Threshold list can cry and scream all they want, but in terms of downside volatility, they ain’t seen nothing yet according to General Electric’s (NYSE: GE) CNBC commentator and TheStreet.com (NASDAQ: TSCM) founder Jim Cramer, as the Uptick Rule comes to a crashing end today.
Among companies at the head of the class have been Novastar Financial (NYSE: NFI) and Martha Stewart Living Omnimedia (NYSE: MSO).
In a RealMoney.com column, Cramer called the suspension of the Uptick Rule the “Hedge Fund Relief Act.”
One of the key hedge funds reputedly shorting upwards of one-third of the Threshold firms on the New York Stock Exchange as well as one-fifth of the NASDAQ list is Rocker Partners, LLC, and Helmsman Holdings, both reputedly headed by David Rocker. Companies alleged to be short by Rocker are posted at http://www.webspawner.com/users/rockerscam/index.html
“Because they won't have to wait for an uptick in order to short, hedge funds will do so with reckless abandon. Expect to see companies that mess up taken down harder and faster and more short squeezes. Get ready to see more volatility, i.e., downside action,” warned Cramer.
“You probably aren't even aware of it. Most people don't even seem to think it is important. It's a two inch story at the bottom of page C-4 of The Wall Street Journal,” Cramer noted. “How fitting, though; just like a two-inch block of C4, the plastic explosive, this little note could take the market to kingdom come if used incorrectly. And it will be.
“Here's the deal. Right now, when a company reports a bad quarter and you aren't long it, you have to wait to short until you get an uptick, or you can go into the put market and get a dealer to make a market in puts for you. He has to lay off his short himself, so it really doesn't matter; you can't get a good price and it is cumbersome.
“So, often you just give up. Oh, Molson (NYSE: TAP) reported a bad quarter, eh? Well, I can't get an uptick, no one will pay me a higher price for it and the put market's too illiquid, so on to the next.
“Not anymore,” said Cramer. Starting today, “hedge funds can sell shares short just like they sell them long: with reckless abandon. You could see some real nasty things happen to companies that mess up. You will see them banged down harder and faster than you would ever believe.
“The corollary is true, too, though. You will see some real squeezes upward because people will be much more reckless in what they short and when.
“This rule change, of course, couldn't come at a worse time. The market's terrible. Longs are beleaguered, shorts are emboldened. I think it is fair to say that things are about to get a lot worse, a lot faster for the stocks of bad companies without the slowdown circuit breaker of the uptick rule. But the SEC, in its non-infinite wisdom, dreamed this little doozy up and all I can tell you is that you ain't seen nothing yet.”
Cramer said this rule is “enough to make me want to get back into the hedge fund game. This new rule would have been a license for me to print money on the short side. Not that the SEC would know that kind of stuff, though. It's too busy worrying about the small stuff.
“Get ready for some real volatility, which, of course, is just a code word for downside action!”
Adding to the “Hedge Fund Relief Act” is the fact that those using illegal naked short selling in the past have been granted a kind of amnesty for acts before the first of 2005. The SEC just “grandfathered” those illegally-begotten gains and resultant counterfeit shares into the system, so these windfall gains are now available to downtick with reckless abandon on downticks.
In the same document, the SEC has inexplicably stated that not all forms of illegal naked short selling, the equivalent of counterfeiting shares in public companies, are actually “illegal.”
The DTCC actions in the StockGate mire are the most serious, if not notorious since the agent of two SROs, the New York Stock Exchange and NASD is also peopled by some 21 directors whose companies, such as Merrill Lynch & Co. (NYSE: MER), State Street Corporation (NYSE: STT) and Goldman Sachs (NYSE: GS), are unlikely to support the DTCC in what attorney Marshal Shichtman, Esq., has termed “strong-arm” tactics.
The DTCC has admitted it has engaged in an act of censorship of this newsletter in squelching its redistribution by Investors Business Daily, and via Investors Business Daily, to Yahoo Finance, a portal owned by Yahoo! (NASDAQ: YHOO), and it is a suspect in the sudden and so far unexplained “postponement” of a widely anticipated expose by Dateline NBC.
IP: Logged |
posted
all i can say about the destructive shorting of stocks is that it will create some sweet long positions after they get done ruining a companies stock price
bad news will make stocks drop like never before but good news will have the same effect to the positive
-------------------- "The Americans will always do the right thing... After they've exhausted all the alternatives." - Winston Churchill
IP: Logged |
<golfman>
unregistered
posted
Can someone tell me why shorting a stock is even allowed?
I mean why not make a rule that just says you can't do it? Be long on everything.
Wouldn't people get rich faster if everyone did that?
It just don't seem right when someone wishes for a stock price to drop as low as possible. That's like me telling someone that I wish they go bankrupt.
Was it allowed though so that people can't get rich that easy? It almost seems it was done as a stopper on peple getting rich. Just like Greenspan raised the rates like 9 times to kill the market.
IP: Logged |
posted
the 90's were as much about idiocy as anything else tho.... people were paying ridiculous PPS's for dotcom shells and the dotcom's were wasting the capital...
this was in large part because of the introduction of electronic trading and too many NAIVE "investors"... lots people didn't even bother to learn how to read SEC filings..they just said look at the chart,it's going up, buy buy buy
we are still recovering from that fiasco...
the privatising of SS is a similar model...if all that money comes to the market and the people don't educate themselves? we will see a replay with a bigger bubble IMO.... either way? i'm in and ready for the next bubble...
in the early 80's? stock prices were too low, and that allowed the "corporate raiders" to damage this country seriously.... they were able to buy co's on margin, and then tear them apart for personal profit...we are stll paying for that criminality too....
i feel like i showed up at the bar at "last call"...the elder baby boomers have left us youngest "boomers" a "bordello at dawn".... there is a house in new orleans....
-------------------- Don't envy the happiness of those who live in a fool's paradise.
IP: Logged |
I'm sitting here watching real-estate prices go down by the ocean looking to buy but not wanting to rush, looking to sell but not wanting to be late....
SS privitazation would be in stock funds, ie very volatille, less, medium etc.... my first 403B and some of my mutual funds are run the same way.
quote:Originally posted by <golfman>: Can someone tell me why shorting a stock is even allowed?
I mean why not make a rule that just says you can't do it? Be long on everything.
Wouldn't people get rich faster if everyone did that?
It just don't seem right when someone wishes for a stock price to drop as low as possible. That's like me telling someone that I wish they go bankrupt.
Was it allowed though so that people can't get rich that easy? It almost seems it was done as a stopper on peple getting rich. Just like Greenspan raised the rates like 9 times to kill the market.
Every positive energy reaction needs a equal and negative energy reaction.. if there weren't opposites stock market crashes like the 1929 crash, 1987 crash and tech stock bubble of the late 90's is the result because stocks arent allowed to "correct" themselves or pullback before continuing a uptrend.. no one wishes a company to go bankrupt because of loss of jobs, affect on economy etc.. but this is very much like Darwism.. Survival of the Fittest... if a company can't be profitable then it's stock will tank.. that is not the work of short sellers.. though short sellers help it along.. so why not profit from it? .. instead of complaining of short selling why not buy a book or two and learn it yourself and make your own money from it. after all you make profits alot faster from shorting then going long... below are some book recommendations..
quote:Originally posted by <SHORTING>: Looking for stocks to short w/ high short interest and trading near highs. Just recently shorted shares of AAPL at 41 still didn't cover because I thnk it may drop lower.
GVRP closed at 7, has a 33 million OS and an UNBELIEVABLE TON of ILLEGAL shorts.
IP: Logged |
UBBFriend: Email this page to someone!
Printer-friendly view of this topic
![[Big Grin]](biggrin.gif)
