Dell, from Rocky Humbert

April 20, 2017 |

 Take a look at the late, great Dell computer. I started shorting it in the late 1990s using a statistical/valuation methodology that was predicated on volatility and the near certainty of a substantial correction. I was correct in that I eventually made money, but the mark-to-markets (and "risk adjusted return") were dismal. I don't use that strategy anymore…

Remember also that nearly every company (GE being one of the exceptions but for the grace of the Fed) eventually disappears either through acquisition, merger, or bankruptcy. So if you only look once every decade or two, and leave a GTC order to buy everything down 50%, you are very likely to get filled. But you are also likely to own a portfolio of losers.


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