Tuesday, July 11, 2006

Turning Stupidity into Cash

Over the years, we've made some decent coin taking positions against companies that blamed their problems on "naked short sellers". Unfortunately, it's something that 99% of the investment community can't do. Even though "naked short selling" is legal (despite what so many scammers would have you believe), it's a pain in the neck. The compliance issues are complicated, it requires a lot of capital, and the transactional expenses make it impractical for small blocks.

That doesn't mean that there aren't opportunities for smaller investors to take advantage of those companies OR investors that complain about "naked short selling". A good place for small investors to turn stupidity into cash is in the options pits. Buying puts on the shares of these companies gives investors an opportunity to profit when those stock valuations are completely unjustified by their fundamentals.

Buying put options entails a great deal of risk. You may lose all of your investment if the anticipated move in the underlying stock's price does not materialize.

The material contained within this blog is not intended to serve as investment advice. It is presented for informational purposes ONLY. By accessing this site, you agree to indemnify the blog manager and all entities responsible for its delivery to your internet device from any and all claims for losses or damages that you may incur while attempting to pursue the investment strategies discussed here.

The manager of this blog or the manager's associates MAY take, or MAY have ALREADY taken, positions in some OR all of the securities discussed on this site.

THE STRATEGIES DISCUSSED HERE WILL ENTAIL A GREAT DEAL OF FINANCIAL RISK FOR ANY INVESTOR THAT PURSUES THEM. PROCEED WITH CAUTION. IF YOU DO NOT COMPLETELY UNDERSTAND THE RISKS INVOLVED, THEN GO AWAY.

The information here is provided to you free of cost. However, if you benefit from the information presented on this blog, I would ask you to consider a donation to the following charity:

All Faiths Food Bank
717 Cattleman Road
Sarasota, FL 34232

(Please put "Naked Short Selling Lie" in the Memo field of your check.)

NOTE: I have NO affiliation with All Faiths Food Bank beyond seeing them as a worthwhile charity that serves the needy in this community. Don't hassle them if you hate what I have to say about your stock. They have one of the most impressive ratios of services provided to funds raised that I have seen.

Time to find some candidates...

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