Attn. Market Gamblers-Give Short Sale Recommendations : LUSENET : TimeBomb 2000 (Y2000) : One Thread

All you market watchers out there, what are some publicly traded cos. that stand a chance of being hit hard if y2k has moderate effects? Give us your short list along with your reasons. For this thread to be useful, please limit information to that which can be verified by independent research of published data or published articles. (Secrets and rumor make great gossip but they aren't very good investment criteria.)

-- Puddintame (, February 14, 1999


I am short the DJX. The Dow Cos. have massive overseas exposure and their earnings will be non-existent. At home the industrials are dependant on too many suppliers to be able to produce. High unemployment will mean little in the way of demand. Oh, and the factories are heavily dependant on technology. Remember, it took over two years for the market to bottom after the '29 crash. These are just opinions and not to be used for trading advice.

-- Mike Lang (, February 14, 1999.

By the way, good topic. I hope others do contribute.

-- Mike Lang (, February 14, 1999.

I believe that companies that have a large number of technically sophisticated suppliers will be vulnerable. I have read that many semiconductor firms have suppliers which take a year to replace with a new supplier. I would suspect firms like Intel would fall into this category but this in not my area of specialty.

Another category are firms that have a large number of suppliers. I have read that GM has 100,000.

I went short in August of 98 and made out ok. I plan on doing so again. However, I would warn those who plan on catching "the big crash" to be prepared for the markets to be closed if a large and rapid decline occurs. A run on the banks could also precipitate a closing of the markets.

-- Tomcat (, February 14, 1999.

In Yardeni's last Y2k reporter he mentioned that one of the big boys at Dell said most of their suppliers are overseas companys and they might not be able to make ANY computers in 2000,,,,,Hummm.

-- TAZ (taz@no.yr), February 14, 1999.

Taz, I think that was Scott McNealy of Sun Microsystems, but if they can't make 'em, then I don't see how anyone else could either.

-- Puddintame (, February 14, 1999.

Every "Internet company" way overvalued still, and no revenues post y2k. No earnings is one thing, but with no revenues even the most optimistic investors will have to rethink their futures.

-- Bill (, February 14, 1999.

I plan to short Amazon.Com. They sell books, which is nice but not neccessary. They are also massively overvalued (they are worth 1.5 times Barnes&Noble, but do a tiny fraction of that chain's business).

Auction companies like Ebay and so on, MAY do okay in a Depression; they'll be a linkup between people trying to sell their computers for $20 in order to buy food, and people wishing to buy those computers. On the other hand, the only real use Amazon Com has is to get rare books into peoples' hands; "rare" meaning "not available at your local bookstore". In a Depression, people will not be able to afford the luxury of a particular title. They're more likely to stop reading altogether, or get the nearest available thing from the local bookstore or the library.

That's why I'm gonna buy a shitload of shorts on Amazon.

And this IS a good thread. Let's keep it going, shall we?

-- Leo (, February 14, 1999.

Would anyone like to shed some light on the pros/cons of puts for y2k stocks versus selling short?

-- Tomcat (, February 14, 1999.


You're right,,I was working off the top of my head from something I read and sent to a bud of mine that maintains a web site for Y2k/ economy related stuff. It dosen't look good for any of the hi-tech sec. but I like the Internut stocks for a killer short. This will be a grinding bear till mid year then the ave. bull will start to get it,,,then lookout,,JMO. I don't play stocks anymore (kindda like watching grass grow) but thinking this might be the chance of a life time if you don't get to greedy and get stuck with a position you can't get out of,,again,, JMO. I have a friend that is a retired stock broker,,,he is calling for DOW 5000 before year is out,,,and he don't believe in Y2k! TAZ

-- TAZ (taz@no.yr), February 14, 1999.

Tom cat,

Options allow you to ride out the moves against you without worry of a margin call,,your risk is only the premium you pay for the option + comm + fees.

The downside of options,,,without writeing a book,,,the option value will not follow the underlieing asset untill the option is well into the money,,just a little stat. here,,90% of all options exspire worthless,,the secret is to sell it with alot of time left or if well into the money, hold untill it exspires and converts to a straight position.

A little advice now,,if you don't know what you are doing, the markets will eat you alive. If you open an acount with 5, 10, 20,000.00 bucks,,that is NOT the limit to your risk,,you can lose 5, 10, 20 times that in the blink of an eye. TAZ

-- TAZ (taz@no.yr), February 15, 1999.

There has been alot of main media crap about how the day trader should be protected from his/her risk in the markets. The day trader and the small spec. are a big factor in the liquidity of the markets.(if the markets aren't liquid,,you can't trade them). The blatent (sp) attack of the Fed. a few months ago (the mid-day, supprise lowering of intrest rates) on the small spec. and the media blitz that followed is another shot at Gov. control of markets.

That felt good,,,thanx for letting me vent, TAZ

-- TAZ (ct@no.yr), February 15, 1999.

To me, the great advantage of puts is that you can't lose more than you invest, which is not the case with selling short. Of course, you pay for the protection in that you don't start making money until the stock goes down a lot more.

Anybody consider going long on silver or gold? Silver has climbed in the past few weeks, but gold is still near its all time lows. There's a shortage of gold/silver bullion coins already, and the premium on these coins is large and increasing. I don't see how the market can sustain a very great disparity between the price of bullion and the price of bullion coins for long. If the 'run on the banks' scenario comes to pass, cash will disappear but people will still have electronic funds and will be frantic to get liquid. Hence I would expect the price of gold and silver to skyrocket. Comments?

-- N (, February 15, 1999.

N, I presume that Buffet's silver hoarding strategy serves several purposes for him. Silver is low relative to its historical relationship with gold. Silver has gone up recently, probably in rsponse to Buffett's hoarding. So he might be right on the technical aspects. Plus, it'll be hedge for any crash in this top-heavy market. Finally, if there's y2k panic, he stands to make a killing on the upside while having little risk on the downside. Even if silver were to go to $0, history tells us it won't stay there. Buffett will be able to ride out any collapse.

I tend to think puts are preferable to shorts. That unlimited risk in a short is pretty scary when you 're dealing with a market that has proven itself to be irrational.

-- Puddintame (, February 15, 1999.

By the way, N, I'm not going long metals. I think that's a game for inflationary times. All the data now says deflation. I think gold is more likely to go down than up. (Hey, it is still wise to own *some* gold. You can't predict the future.)

-- Puddintame (, February 15, 1999.

Could someone explain how this whole "selling short" thing works?

And what are put options?

I would appreciate any and all information.

-- Newbie (, February 15, 1999.




-- TAZ (taz@no.yr), February 15, 1999.


Selling short and buying put options are two different kinds of investments that can make gains when prices drop. In both cases, you can lose money very quickly if you guess incorrectly, or even if you guess correctly but if your timing is wrong.

I cannot resist the temptation to mention the old warning: if you have to ask, they are not for you.

You can get info on options at I'm not sure of a web site that has introductory info on shorting. But keep that warning in mind.


P.S. Puddintame: Good call on metals in deflation!

-- Jerry B (, February 15, 1999.

AOL could be a short candidate. Check out the post on this forum entitled:

AOL Playing Catch-up with Y2K (Kevin,, 1999-02-15). Apparently AOL has just released its SEC 10Q filing which says that many of it's suppliers are not responding to it's y2k compliance survey.

-- Tomcat (, February 15, 1999.

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