Archive for April 2nd, 2009

Short Selling

 

Short selling is the act of borrowing stock to sell with the expectation of the price dropping and the intent of buying the stock back at a cheaper price. There are substantial risks with short selling, some of which can be avoided through education on the process. 

It’s just another form of forward sales, i.e., short sellers risk getting their fingers burnt if prices don’t fall as expected, so it’s not the one-way bet some people might imagine.

Short selling is a beneficial process that allows anyone to participate in the market’s evaluation of share prices. So long as contracts are enforced, even naked short selling can be a beneficial process that allows the quickest possible adjustment in mispriced stocks. 

Short-sellers attempt to profit from an expected decline in the price of a financial instrument. Short selling is not for everyone for the simple reason that stocks generally tend to go up. During the 20th century, stocks gained 9% a year on average, although there was significant yearly variation. 

The whole short selling process is not complex, but it’s a concept that many investors have trouble understanding. In general, people think of investing as buying an asset, holding it while it appreciates in value, and then eventually selling to make a profit. Short selling is and has been an essential market stabilizing transaction. Banning it is tantamount to closing the market. 

Short selling is successfully used as a profitable investment strategy by some savvy investors, but many investors use short selling only to hedge their long positions and minimize risk of market fluctuations. Hedging is certainly a safer short selling strategy, although the potential gains are eclipsed by successful short selling speculation. 

 

Add Some Diversity to Your Summer Travel

I’d like to make a suggestion for a vacation destination where you can find a great deal of variety in the type of local attractions offered.  Everybody has different goals for their summer travel.  Some of us want to visit Disneyland and some just want to relax on the beach.  Others love to see historical sites and still others love to play golf.

Summer California actually offers activities in all of these categories.  There are many golf courses between the Pacific Ocean and Palm Desert.  And, of course, you’ll find plenty of beach action for sun worshipping.

Another obvious destination is the Disneyland Resort, which includes Downtown Disney and Disney’s California Adventure (by the way, Disney is spending like a billion dollars on a major renovation of California Adventure over the next several years).

If you haven’t been to Anaheim in several years, you’ll be amazed at the changes.  California Adventure exhibits the diversity of California culture, from citrus orchards to downtown Los Angeles to the northern California Wine Country.  You will observe an international blend of cultures in the visitors at the parks and at Downtown Disney.  It is a great place for people watching—a veritable cultural melting pot.

Speaking of a cultural melting pot, Southern California is a concoction of people and cultures from around the world.  There is a particularly strong presence from Pacific Rim countries, but Europe, Asia and Africa are likewise well represented (not so many folks from Antarctica).

You’ll find quite a number of ethnic communities scattered throughout Southern California, and worth a visit in your summer travel activities.  The first community that comes to mind is Chinatown, just north of the Los Angeles central business district.  Just to the east of downtown is Little Tokyo.  Koreatown lies on the west side of the 110 Freeway.

Take time out of your schedule to drive down to Orange County to visit downtown Santa Ana, portions of which will remind you of a medium-sized city in Mexico.  Nearby Little Saigon offers shopping and dining with a Vietnamese and Southeast Asia influence.  There are no-doubt many other ethnic area in the Southern California melting pot.

Learn Italian

The best way to memorize Italian words is by using memory techniques. The edge that the link-word technique has is how an Italian word is linked to an English word by using matching sounds between words. Let me give you an example on how to use these techniques.

English word = plank

Italian word = l’asse

Imagine a PLANK of wood being maneuvered by LASSIE the famous dog. Strange, but it causes your mind to remember the words. It does not even have to be exact. Focus on the sounds created when pronouncing Italian words, for it is the key to the link word technique.

Here is another Italian word for you: As you read the example, try to imagine as if you are exactly where the scenario is happening. Retain the key words in your mind, which are the capitalized words, and retain the significant details. Think about it several times and let it sink in until you can recall it without reading.

English word = baseball cap

Italian word = il berretto

Imagine a BASEBALL CAP buying a BERET TO disguise itself. Strange, but it causes your mind to remember the words. It does not even have to be exact. Focus on the sounds created when pronouncing Italian words, for it is the key to the link word technique.

We learn to do by doing. Tables of prepositions, lists of conjunctions, catalogues of nouns and verbs, vocabularies of important words–none nor all of these can teach us to speak idiomatically. We must actually put ourselves through the paces of speaking. “It is, moreover, intense effort that educates.”1 We should aim in our language learning, not so much to acquire knowledge as skill. Now, skill in the use of any member of the body depends on its unconscious control, on its automatic working. Consequently, we must by intense repetition enable our organs to utter, unconsciously and automatically, in the new language, the sentences that express our thought.

Learning Italian can be fun and easy…and then you have a great place to visit!

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