Never Bored, Sometimes Short

TED

Do you ever get bored?  Who can these days, if she or he has a smart phone?  Even waiting in line is now fun.  But . . . just in case . . . you should keep the new, improved TED site bookmarked.  So many great talks, like the ones I was posting about last week.  (Here is the astronaut who went temporarily blind while outside the Space Station.)  They even now have playlists, and a “watch later” feature, which help impose some order on the otherwise potentially overwhelming set of choices.   All free.

MONT

If you’ve never shorted a stock, don’t start now.  For a whole lot of reasons, it’s a particularly difficult, dangerous way to make money.  And the problem with buying “puts” instead is that — although they do, crucially, limit your loss to whatever you bet — you often pay a wide premium for that protection.  With puts, you not only have to be right, you have to be right by enough to more than offset that premium.  And your being right has to be reflected in the stock price before your put expires.  That last detail is particularly galling.  You were right!  You put your money where your mouth was!  And, sure enough, the stock did collapse!  But only three days after your puts expired, meaning that you lost your entire bet.  God I hate that.

That said, I’d give pretty high odds that shares of Montage Technology will be lower at some point.  Being blessed with money I can truly afford to lose and a certain amount of experience with short sales, however rueful, I have shorted MONT and — on a lark — bought wildly-out-of-the-money puts.  So — full disclosure — I am very much not a disinterested party here.

That said, I’ve found few investment managers as talented, thorough, or cautious as Aristides’ Chris Brown, and — while this could easily fit into the “famous last words” category, because no one’s right 100% of the time — he sure thinks MONT is headed lower.  As per this extensive post on Seeking Alpha.  So if you are that rare reader who has the resources and experience to take risks like this, well . . . misery loves company.  (Ameritrade had no shares available to short yesterday but Fidelity put through my order fine at $20.23 a share, and — because it’s hard to borrow — is currently charging 9.5% interest on the position.)