MSFT: Nomura Skeptical Of YHOO, RIMM Talk

Nomura Equity Research’s Rick Sherlund, who maintains a Buy rating on shares of Microsoft (MSFT)?, this afternoon issued a note to clients to refute rumors floating around saying the company will acquire Yahoo! (YHOO) or possibly Research in Motion (RIMM).
Sherlund maintains a Buy rating on Microsoft shares and a $32 price target. As far as vague rumors that have floated around today, Sherlund states simply, “we do not see a compelling strategic fit and think this is unlikely.”
On the intense speculation regarding Yahoo!, he has a little more to offer on why an outright buyout makes no sense, writing?

We believe Microsoft has the benefit of scale in search through their current relationship with Yahoo and see no need to acquire the company. ?It is possible that Microsoft may be part of a larger group to invest in a minority position in Yahoo for some strategic business relationship, but this is very different than Microsoft buying Yahoo, that ship sailed by a few years ago and is unlikely, in our view, to be revisited given that Microsoft now has the scale they desired in search through their existing relationship with Yahoo. There are other parts of Yahoo that are likely of strategic interest to Microsoft, but there are likely smarter ways to work together than buying the company.

A New Royalty Trust From SandRidge Energy

After the successful 2011 debuts of SandRidge Energy's (NYSE: SD  ) two oil and gas royalty trusts, SandRidge Mississippian Trust I (NYSE: SDT  ) and SandRidge Permian Trust (NYSE: PER  ) , the Oklahoma-based company is at it again.
If it ain't broke
Moving to exploit the same region that made the Mississippian Trust I a success, the parent company has filed the initial IPO paperwork with the SEC to give birth to SandRidge Mississippian Trust II, with the proposed ticker symbol "SDR."
I'm a big fan of SDT and the Mississippi Lime region. The play has a significant upside to many of the unconventional plays being developed right now. For example, the region is believed to contain 52%-55% oil, versus other plays that contain a higher percentage of not-so-lucrative dry gas. From a production standpoint, the play has great economics: Limestone's porosity and natural fractures can reduce drilling expenses by half.
The stats
Now that we have three SandRidge trusts to think about, let's run a side-by-side comparison of the whole family.

?	Mississippian Trust I	Mississippian Trust II	Permian
Royalty % -- Initial Wells	90%	80%	80%
Royalty % -- Development Wells	50%	70%	70%
No. of Initial Wells	37	67	509
No. of Expected Development Wells	123	206	888
Rese! rves Att ributable to Trust	19.3 MMBoe	26.1 MMBoe	21.8 MMBoe

Source: Company filings.

The new trust has both a higher royalty stake in developing wells and a larger estimated reserve base compared to its Mississippian sister. In the end, though, the only thing that matters is the trusts' production numbers.
Show me the money
SandRidge expects target distributions for the Trust to increase through the second quarter of 2016; the Trust itself is set to expire at the end of 2031. Let's take a look at the more immediate distribution schedule.

2012	Target Distribution
Q1	$0.40
Q2	$0.58
Q3	$0.59
Q4	$0.61
Total	$2.18

Source: Company filings.

It should be noted that the first-quarter payment is lower because of administrative costs associated with the formation of the trust. The expected total payout for 2013 is $2.74.
Foolish takeaway
It will likely be a few months before SandRidge Mississippian Trust II is officially on the books, as paperwork takes time. Interested investors can monitor the Trust's progress by adding SandRidge Energy to My Watchlist.
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The oil exporter is moving quickly to ramp up sales to Asia

TransCanada s (NYSE:TRP) stalled Keystone XL pipeline took another interesting twist this weekend when Speaker John Boehner said Republican lawmakers will include an approval of the pipeline in a new highway bill. The Obama Administration denied the pipeline builder a permit due to various environmental concerns and put off making a decision on the project until 2013.

A provision in the payroll-tax bill forced President Obama to make an early verdict on the project, which led to its cancellation. While the pipeline may ultimately be built, investors shouldn t focus on the politics. The real winner in this drama is the nation that is exporting the oil: Canada.

While the U.S. bickers about the fate of Keystone, Canada has made the smart decision to move forward. Canada, which accounts for over 90% of all proven energy reserves outside of the Organization of Petroleum Exporting Countries, has put out an  open for business  sign.

Canadian Prime Minister Steven Harper is working hard to reduce his nation s dependency on the U.S. Currently, around 99% of Canada s crude oil exports go south, and U.S. and many Canadian officials want to shrink that share. Harper has stressed that his country’s capacity to export energy is a national priority, and he has pledged to speed regulatory approval of energy projects. In a phone call to President Obama, the Prime Minster said that  Canada will continue to work to diversify its energy exports.

In order to diversify those exports, Canada has begun to look toward Asia as major buyer. According to a University of Calgary study, accessing emerging markets in Asia would help Canadian E&P companies realize a $13.60 a-barrel price gain by 2030. Harper will meet next month with Chinese President Hu Jintao to discuss energy export options.

Public support for Enbridge s (NYSE:ENB) Northern Gateway pipeline has surged since the Keystone denia! l. The 6 50-mile pipeline would move oil from Alberta s rich oil sands to British Columbia s coast, where it would be exported to Asian markets via a new port. Overall, Canadian commodity exports to Asian-Pacific nations rose nearly 60% during 2011 and should continue to rise as the nation makes emerging Asia a priority.
Focusing On the Energy Superpower

With Prime Minister Harper and host of other officials focused on moving crude oil and natural gas to Asia, the time could be right to add some Canadian energy companies to your portfolio. Most U.S. investors are heavily underweighted in Canada despite its proximity and global standing. Both Enbridge and the broad-based Guggenheim Canadian Energy Income ETF (NYSE:ENY) could be good bets. Odds are that the Northern Gateway pipeline will be built and start exporting to Asia. The Guggenheim fund tracks 34 different firms, including Penn West Petroleum (NYSE:PWE), and it provides a great overall play in Canadian oil-sands E&P producers. The ETF yields roughly 2.8% and charges 0.65% in expenses.

Another value in the Canadian energy sector might be giant EnCana (NYSE:ECA). After spinning off its oil assets as Cenovus Energy (NYSE:CVE), the now pure natural gas player has seen its share price dwindle in the face of record low natural gas prices. However, the company has already begun construction near Kitimat, British Columbia, of an?LNG export facility.

Given Canada s new fondness for Asia and Asia s growing appetite for LNG, EnCana could be in a great future position to provide those exports. Shares currently yield over 4%. Similarly, oil-sands-focused producer Suncor (NYSE:SU) could be a great buy. Shares of Suncor have been punished due to a writedown in the value of some of its Libyan assets and the abandonment of a $1.2 billion gas project in Syria. However, no matter which pipeline is built (Keystone or Northern Gateway), Suncor should see increased demand for it! s bitume n crude.

Teledyne Awarded $595 Million Missile Defense Agency Objective Simulation Framework Contract

 THOUSAND OAKS, Calif.–(CRWENEWSWIRE)– Teledyne Technologies Incorporated (NYSE:TDY) announced today that its subsidiary, Teledyne Brown Engineering, Inc., in Huntsville, Ala., was awarded by the Missile Defense Agency (MDA) its Objective Simulation Framework (OSF), an IDIQ contract with a potential value of $595 million over five years beginning September 1, 2011.

Under the contract, Teledyne will design, develop, test, implement and maintain the OSF. It will be the centerpiece test and simulation framework for all elements of the missile defense system. The OSF will be capable of supporting full scale simulations, ground tests and live fire events. For the first time, it will tie together the Digital Simulation Architecture with the Single Stimulation Framework.

 Winning this significant contract reflects well on our capabilities for designing and developing test systems for complex applications such as missile defense,  said Robert Mehrabian, chairman, president, and chief executive officer of Teledyne Technologies.  We expect similar test technologies will have use in other markets we serve including energy, marine, aviation, space and environmental applications.

Teledyne Brown developed the first digital and Hardware-in-the-Loop (HWIL) test and assessment capabilities for missile defense. Through the years, Teledyne Brown developed and supported advancements in test frameworks that established ground test standards for missile defense systems. The company also developed an OSF prototype that incorporates legacy digital and HWIL capabilities to support Ballistic Missile Defense System (BMDS) test and assessment activities. Teledyne Brown has executed BMDS tests and assessments at its headquarters in Huntsville, Ala. and at other locations.

About Teledyne Technologies Incorporated

Teled yne Technologies is a leading provider of sophisticated instrumentation, digital imaging products and software, aerospace and defense electronics, and engineered systems. Teledyne Technologies  operations are primarily located in the United States, Canada, the United Kingdom and Mexico. For more information, visit Teledyne Technologies  website at www.teledyne.com

Forward-Looking Statements Cautionary Notice

This press release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, relating to a contract award. Actual results could differ materially from these forward-looking statements. Many factors, including funding, continuation and award of government programs, and cuts to defense spending resulting from future deficit reduction measures, including potential automatic cuts to defense spending that may be triggered by the Budget Control Act of 2011, could change the anticipated results. Various risks, including risks associated with government contracts, are identified in Teledyne s 2010 Annual Report on Form 10-K.

Introducing the 24/7 Wall St. Wire

from BioHealth Investor

The upcoming week will be a big one for Hollis Eden Pharmaceuticals (HEPH), a company I've written about previously. The company was founded in 1992 and they've not advanced a single drug to a Phase 3 clinical trial.

Their lead compound, called Neumune, prevents loss of white blood cells (neutropenia), loss of platelets (thrombocytopenia), and loss of red blood cells (anemia). This drug has been demonstrated safe in several Phase 1 clinical trials. The biggest indication for Neumune is protection against acute radiation syndrome (ARS).

Project Bioshield, a response to potential terrorist attacks, was signed into law in July 2004. One of the purviews of Project Bioshield is to develop and stockpile drugs to protect Americans from biological, chemical, and nuclear attacks. The anthrax scares in Washington DC are a chilling reminder of why this may be important: I'll leave comments about feasibility aside.

Sensing opportunity, Hollis Eden has been seeking to provide the Government (specifically the Department of Health and Human Services, HHS) with Neumune to protect against a radiation attack. At first glance, this was a smart strategy. Implementation, however, has not been so easy.

HEPH has been trading wildly (according to Yahoo Finance beta = 5.42) over the past few years, due in large part to their attempts to secure a contract for Project Bioshield. In my opinion Hollis Eden has an extremely weak pipeline, and this procurement is their last hope. Trouble is, much like Lucy pulling the football away before Charlie Brown can ever kick it, HHS keeps moving the deadline back. Initially a target date of September 30th 2006 was set, which was pushed back to November 30th, which was pushed back to January 31st next Wednesday.

So, while I would never recommend HEPH as an investment, I think it will be a fun stock next week for day traders (take a look at Friday afternoon's minute-by-minute chart) and those looking to speculate next week. If HHS! awards a contract to Hollis Eden the stock will take a nice spike. If they don't deliver on a contract, or delay it a third time, I think the stock will take a substantial dive.

There are a couple of ways to play this. A good volatility play is a straddle with March $5 options: open interest on February options is very low, and March options, while still illiquid have a higher open interest.

Now, Project Bioshield has hit some hiccups. A debacle in which a $1B contract was cancelled sent Vaxgen's stock (VXGN.PK) to the Pink Sheets. There have also been calls, by Senators Collins and Lieberman, for a congressional investigation into Project Bioshield.

But here's another twist. A week after announcing the November delay in the HHS procurement, Hollis Eden announced it was selling $26M worth of shares at $6.50, a substantial discount then. The company had $48M in cash at the end of Q3, and were burning on average $6M per quarter: there certainly was danger of running out before the January 31st tentative date set by HHS. Waiting until after a contract award would have meant a higher share price, and a bigger infusion of cash.

One can speculate endlessly about what the secondary offering of stock means about management's confidence in obtaining the contract. To be clear, according to a November press release, Hollis Eden is "not aware of any other company that remains in the competitive range for this contract award".

Whether or not HEPH gets a contract next week is pure speculation. The stock is trading near $6, so shorting it can be risky shorts I recommended on Avanir Pharmaceuticals (AVNR) and Encysive Pharmaceuticals (ENCY) were both in this range, and both paid off very well! This is a situation where I like to buy puts, and I have purchased some. To be clear, this is highly speculative, but I like the odds of betting on government inaction. Should be a fun week!

Top Basic Materials Sector Stock Holdings of Canyon Capital

Following is information on Canyon Capital Advisors  top holdings in the Basic Materials sector:

    * Chemtura Corp. (NYSE:CHMT): On 3/31/11 Canyon Capital Advisors reported holding 4,905,317 shares with a market value of $84,371,456. This comprised 5.09% of the total portfolio. On 6/30/11, Canyon Capital Advisors held 5,679,181 shares with a market value of $103,361,099. This comprised 7.85% of the total portfolio. The net change in shares for this position over the two quarters is 773,864. About the company: Chemtura Corporation manufactures plastics and other chemicals. The Company produces urethane polymers; plastic additives, including flame retardants; pool and spa products; seed treatment and miticides; and petroleum additives. Chemtura operates worldwide.
    * Packaging Corp. of America (NYSE:PKG): On 3/31/11 Canyon Capital Advisors reported holding 1,717,529 shares with a market value of $49,619,412. This comprised 2.99% of the total portfolio. On 6/30/11, Canyon Capital Advisors held 1,717,529 shares with a market value of $48,073,636. This comprised 3.65% of the total portfolio. The net change in shares for this position over the two quarters is 0,000. About the company: Packaging Corp of America manufactures containerboard and corrugated packaging products for use in protecting goods during shipment. The Company also produces multi-color boxes and displays, as well as meat boxes and wax-coated boxes for the agricultural industry.
    * LyondellBasell Industries NV (NYSE:LYB): On 3/31/11 Canyon Capital Advisors reported holding 263,398 shares with a market value of $10,417,391. This comprised 0.63% of the total portfolio. On 6/30/11, Canyon Capital Advisors held 263,398 shares with a market value of $10,146,091. This comprised 0.77% of the total portfolio. The net change in shares for this position over the two quarters is 0,000. About the company: LyondellBasell Industries NV is a manufacturing company. The Company produces che! micals, fuels, and polymers used for packaging, clean fuels, durable textiles, medical applications, construction materials, and automotive parts. LyondellBasell Industries operates globally and is headquartered in the Netherlands.
    * Graphic Packaging Holding Company (NYSE:GPK): On 3/31/11 Canyon Capital Advisors reported holding 0,000 shares with a market value of $0. This comprised 0.00% of the total portfolio. On 6/30/11, Canyon Capital Advisors held 1,500,000 shares with a market value of $8,160,000. This comprised 0.62% of the total portfolio. The net change in shares for this position over the two quarters is 1,500,000. About the company: Graphic Packaging Holding Company is an integrated provider of paperboard and integrated paperboard packaging solutions to multinational beverage and consumer products companies. The Company manufactures folding cartons for frozen and non-frozen food and beverage products.

The Gilded Age of Wall Street Remains Intact

For decades, Wall Street offered the allure of big league paydays and behind-the-scenes power.

But since the 2008 financial crisis there's been a growing sense - or even hope - that The Street's stride had been broken. After all, demand for a financial system overhaul, regulatory reform, and a crackdown on Wall Street pay must take some toll.

Not hardly. Wall Street hasn't changed its ways and it never will.

Take it from a man who has spent decades on The Street, seeing everything firsthand.

Money Morning Capital Wave Strategist and retired hedge-fund manager Shah Gilani says that in the short-term, firms will have to deal with new rules and slimmer paychecks, but ultimately, they will still find a way to prosper.

"The bloom is off the rose and Wall Street is showing its thornier side, but the Street is still paved with gold," said Gilani. "On any relative basis, unless you're a rock star, star athlete or Hollywood heavy, there's no place like Wall Street to make your fortune. That's not going to change any time soon."

Wall Street Sidesteps Obstacles

Wall Street faces a new regulatory environment, pay cuts and angry public protests - but the effects won't be nearly as damaging as many critics had hoped.

For instance, the new Volcker Rule regulations, part of the Dodd-Frank financial oversight law, will go into effect next year. Its restrictions are perhaps the sternest to emerge from the campaign for reform.

The rule aims to ban proprietary trading, in which the banks traded for their own benefit rather than for the benefit of their customers, but also will address other areas such as hedge fund investing.

When all is said and done, the Volcker Rule could slam fixed-income operations revenue by as much as 25%.

Of course, JPMorgan Chase & Co. (NYSE: JPM), Bank of Ame! rica Cor p. (NYSE: BAC), and Citigroup Inc. (NYSE: C) aren't exactly quivering, since they derive less than 10% of their revenue from such activity.

And the firms with the most to lose - Goldman Sachs Group Inc. (NYSE: GS) and Morgan Stanley (NYSE: MS) - already are devising ways to avoid the regulations by dumping their "bank holding company" classifications

In 2008, the banks converted from securities firms to bank holding companies to qualify for bailouts. Now they simply intend to switch back.

These Wall Street heavyweights are also dealing with increased scrutiny of executive compensation, but continue to allocate a large percentage of profits for salaries and bonus pools.

Goldman Sachs' third quarter profit fell about 75%, but the firm only reduced compensation expenses by 25% for the quarter. Profit totaled $1.5 billion, down from $5.5 billion the year prior, but the company still spent $10 billion on compensation. Average pay for each Goldman employee was $292,000.

Goldman isn't the only firm to keep paying, despite efforts to curb Wall Street compensation. Average pay for JPMorgan employees is $290,000 according to third-quarter earnings. Citigroup's average pay went up 6% -- despite flat revenue.

"I wouldn't shed too many tears for Wall Street," Neil Barofsky, the former special inspector general for the Troubled Asset Relief Program (TARP), told Bloomberg News. "The systemic advantage that the too-big-to-fail banks enjoyed in the lead-up to the financial crisis may be diminished in the near term, but the structure is still essentially the same and will almost certainly help catapult them to record profits and bonuses once the good times return."

Wall Street: The Only Place to Really Make Money

Indeed, Wall Street may have taken a beating, but it still offers something most other careers don't: a chance to generate vast amounts of wealth without risking y! our own money.

"At the end of the day, it usually takes money to make money, so if you don't have any but you want to make a lot of it, Wall Street is the only place where you can make money with other people's capital," said Gilani.

Even amid a global protest movement, Wall Street's ability to attract customers and turn profits overshadows its troubles.

"While some grads may be rethinking their options, it's unlikely too many who look to the Street of Dreams are going to wake up to all the bad press Wall Street has been getting and decide to take some higher road," Gilani said.

And where there's a promise of riches, there's corruption.

"All power corrupts. It's impossible to weed out corruption and greed on Wall Street, money does strange things to some people," said Gilani.

Of course, that's exactly why it helps to have someone like Gilani on your side. As a former Wall Street insider, Gilani knows how Wall Street operates and how to spot the "catch" when something sounds too good to be true. If you want to make money but need help separating the suspects from the prospects, you can turn to Gilani in his new publication, Wall Street Insights & Indictments.

His goal simply is to show you what's really going on in the markets, so you can "know the story" and make some money.

And the best part is, this new service is absolutely free. Just sign up by clicking here. You'll also receive Gilani's latest report: "5 Ways to Trade the Coming EU Collapse - And Make a Killing."

Work-Life Balance: Can You Have It All?

Excerpted from OFF BALANCE: Getting Beyond the Work-Life Balance Myth to Personal and Professional Satisfaction by Matthew Kelly. Published by arrangement with Hudson Street Press, a member of PenguinGroup (USA), Inc. Copyright (c) Beacon Publishing, 2011.

By Matthew Kelly
It is a common and childish mistake to believe that satisfaction is allabout getting what we want. In truth, we have all gotten what we want onmany occasions and not been satisfied. The very basis of satisfaction isa value structure, or a set of priorities, around which to live yourlife.
Can you have it all? Any reasonable person knows the answer tothis question is no. It is one of the earliest lessons we learn inchildhood, and yet, most of us as adults can be quite childish at times.
The reason you cannot have it all is not because you are ill equippedfor life, or lack talent, or because you don't have enough money. It issimply because one of the governing principles of the universe dictatesthat there are an infinite number of possibilities for any day, year, orlife -- and every day, year, or life is finite. And so, part of growingto maturity, part of growing up, requires that we recognize and acceptthat we cannot have it all.
Most of us recognize that we cannot have it all, but often wesubconsciously fall back into moments of non-acceptance. We know wecan't have it all but we refuse to accept that. You can see how thiskind of pattern could lead to a great deal of frustration at the veryleast and real insanity if taken to the extreme.
The work-life balance discussion has failed to adequately make clearthat you cannot have it all. Just because we started talking aboutwork-life balance and encouraging it, does not mean that people can allof a sudden have everything. I cannot play tennis and golf at the sametime. The finite nature of a certain period of time requires that Ichoose to play tennis or golf! this af ternoon. I cannot do both at once.We have to choose between many options in deciding what to do on anygiven day or in any given hour.
The other way this idea plays out is that excellence in any fieldrequires that we miss out on other things. If you want to be the besttennis player in the world you are going to have to sacrifice a greatmany other things in order to achieve that. Hopefully you have to decidewith a clear head that the things you are giving up are less importantthan becoming the best tennis player in the world.
Success always hasand always will require sacrifice. If success were easy it would becommon. It is difficult and that is why it is rare. More people have thetalent than you would think. Few are willing to make the sacrificesnecessary. This is an easy example because it is far from us. But let usbring it closer. Make it real and personal.

To be the best marketingexecutive in the world requires sacrifice, to be the best HR contact,the best salesperson, the best manager, the best employee, the bestaccount manager... All require sacrifice, and I am not sure that thework-life balance discussion of the last 20 years has adequately pointedout that excellence in any field requires sacrifice.
And perhaps you have no desire to be the best at what you do. Perhapswork is just work, something you have to do. In that state of mind youwill find it very difficult to experience professional satisfaction, andthat will be sure to have an impact on your personal satisfaction as thetwo are intimately linked. Nonetheless, lets bring the example one stepcloser. Perhaps uncomfortably close.
A mother who works cannot expect to be able to do everything for herchildren that a mother who stays at home does. That does not necessarilymean she is a bad mother or that her children are worse off. But thesimple fact remains that her work will require a certain amount of time,energy, and attention -- all of which canno! t be giv en to both work andher children. She may have plenty of time, energy, and attention for herchildren outside of work. Only she can decide that. But the mother whodoes not work will by simple math have more time, energy, and attentionto give her children. The reality is that a working mother cannot expectto do everything a stay at home mother does. There are trade offs thatneed to be made.
In a way the work-life balance discussion has made us feel that we couldhave it all, and we cannot. Most people don't want to hear this andcertainly our culture tell us incessantly that we can have it all, butthe truth is you can't. You cannot be in two places at one time, youcannot have it all, and so we must choose.
>To order reprints of this article, click here: Reprints

Cramer Positive on VF Corp (VFC)

Tonight on CNBC’s MAD MONEY, Cramer said that VF Corp (VFC-NYSE) is one of his fallen angels because last week lost 7% on the guidance coming in light after it sold off a low-margin unit is too much.  He did talk to the CEO last week, so this is not exactly a huge mover on his part today.  He said it will grow 8% annually and 5% internationally.  Cramer said it can go back up to where it was easy and the way the company is followed on the street you may see many upgrades on it.  He would be a buyer ahead of the February 6 earnings report.  The stock did trade up 1% to $74.78 after Cramer noted this tonight.

Making a Short Trade

There are some trading issues far more important when shorting a stock, or playing the downside through buying puts, than holding a simple long position in a stock.
* Liquidity: You really should not short, in any form, a stock that is not highly liquid, which means many millions of shares outstanding and hundreds, if not thousands, of put option contracts trading each day at each available strike price.

Without liquidity, you can be right and wrong at the same time — right about the company but stuck in such a way that you cannot quickly liquidate your short position and get the profits you deserve. Liquidity should be a prime consideration when establishing short-side positions.
* Availability: Some stocks are hard to short because their shares are not easily available to borrow, for a variety of reasons. And if you are finding it hard to locate the shares to conduct the transaction, it means there is either a large short position in the stock already or the stock is not held by a large number of individual shareholders, which means it is less liquid than trading statistics may indicate.
* Outstanding Short Position: This is the number of shares of a company held short, measured in absolute numbers, or as a percentage of the float of the stock. If this position is large, more than 10% to 20% of a company’s shares, the word is out — bad news is already incorporated in the stock price. For the most part, I avoid stocks with large short positions, and so should you.
* Cash for Margin Calls: If a stock moves the wrong way (up) and you have shorted the stock outright instead of having bought put options, you are going to need cash to meet margin calls — perhaps daily. This is a nasty situation that ties up your capital, which is why I typically look toward puts or LEAP puts for shorting.
If you enter a short position! , be awa re that things can easily move the wrong way and you will need cash to fund the margin call or else you will have to go into the open market and buy the stock to cover your short position.
* Timing: Timing in life is almost everything (where would I be if I had not been invited to the party where I met my wife?), and the same is true for managing short positions. You should set time horizons for how long it will take a position to pan out and, if it does not, it is time to take some losses and move on.
Unlike long positions, where investors can wait out a slowdown in a stock’s appreciation or a dip in share value, short positions are expensive to maintain and puts are contracts that can expire worthless — the clock is always ticking.
Most good short positions take no more than three months to move in your favor; longer-term shorts, which should always be managed through LEAPS, can run much longer but are less typical than the six- to 12-week position.
How to Cover: Believe it or not, you can end up owning a stock and shorting it if you are not careful with your instructions to your broker. When you call or go online to cover a short position, you must specify that this purchase is to cover the open short position. If you do not, you could end up buying the shares and have them sit in your account and also have an open short position at the same time.
Because short-sellers might find themselves exiting their positions in a hurry, it’s important to take the time to ensure that you issue clear instructions to your broker so that you get out when you want to!
Let’s wrap up: The real issue, of course, is picking the right company that’s going south. But you need to mindful of all of the things I discussed today, and that requires some planning, some preparation, some discipline and some clarity of thought.
You used that on the long side; now, use it make short-side profits, as well.

Private Equity Firms Shovel Millions to Congress: MapLight Analysis

Political Action Committees and individuals connected to private equity and investment firms have given more than $17 million to lawmakers that have been serving since the 109th Congress adjourned in 2006, a report released last week by the nonpartisan political research firm MapLight shows.

From Jan. 1, 2007, to June 30, 2011, Democrats have taken in $10,871,919, while their Republican counterparts received $6,553,793, the report says. Of the Democrats’ total, President Barack Obama accounts for $1,921,490 while his 2008 Republican opponent for the White House, Sen. John McCain, R-Ariz., has accepted $1,246,575.

Mitt Romney, the current GOP presidential candidate front-runner, has been criticized by his rivals for his career in private business. Texas Gov. Rick Perry, Newt Gingrich and Jon Huntsman, who left the race on Monday, laid into Romney on Jan. 9 for his years at Bain Capital, the private-equity firm he ran until the mid-1990s. Both Perry and Gingrich accused Romney of having “looted” companies and firing workers for his own gain.

The accompanying chart reflects analysis conducted by MapLight, which shows contributions from private equity and investment firms to members of Congress. Contribution industry classification provided by OpenSecrets.