Maybe you read my May 10 comment, about shorting crazily overvalued stocks. I didn’t suggest you do it, because crazily overvalued stocks can become even vastly more crazily overvalued. But we talked about it (and about how to create a “synthetic” short).

One of the examples I gave was stock in a company called Presstek, which Barron’s has been knocking for years. “Someday,” I wrote, “all printers may use the Presstek process. But in the meantime, Presstek earns just a few cents a share, yet sells at 114, up from a 1996 low of 21. Or wait: 114 was last month. Monday it was 149.”

Well, by May 21 it had hit 200. With nearly 15 million shares outstanding, that meant the entire company was valued at about $3 billion — chicken feed these days. It also meant that if you had shorted 1,000 shares, say, at 149, you would have lost $51,000.

When, 11 trading days later (which is to say, Thursday), it had fallen from 200 to 60 (which meant the company was now valued at less than a billion and you would have made $89,000 on your short), I called my broker and asked, smiling to myself, ”Any news on Presstek?”

I should pause here to say that in addition to using a couple of discount brokers, I use a full-service broker — mainly so I can enjoy conversations like these.

“News?” he said, pretending not to understand. “Why?”

“Well,” I said, pretending to take him seriously, “I noticed the stock is down a hundred and forty points.”

“No,” he said, “no, news.” And he broke into a huge laugh, as I knew he would. (For years, I’ve been paying him outsized commissions to hear him laugh.)

“Just normal market fluctuations,” we both guffawed more or less simultaneously.

I will admit it was not a double-over-laughing, punchline sort of joke (which is probably why I have to pay him so much). It was just wry merriment.

But c’mon! Is this market not amusing? From its Thursday low of 60 Presstek managed to inch back up to 95 the next day. “Any news on Presstek?” I called to ask my broker. “No news,” he deadpanned. “I wonder what made it go up so much?”

“Bargain hunting,” I suggested. And he gave me that million-dollar (my cost) laugh.

One last thing I should point out, lest all this frivolity take your eye off the ball. Shorting Presstek would have worked out big — last week. But shorting stocks at the dawn of the millennium, this amazing technological age we live in, is a very easy way to get wiped out and wreck your life.


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