What Billionaire Mark Cuban Is Trading
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First off, it should be noted that while Cuban doesn't receive great plaudits for his stock-picking, his sense of timing during the dot-com days was uncanny. He started his company, Broadcast.com, in 1995, brought it public in 1997 and sold to Yahoo! (YHOO) at the near peak in July 1999. Then, from all reports, he hedged or sold his $3 billion worth of Yahoo! at its top. Be it luck or skill, I wish I had had as much of either in my own dot-com experience.Among his long picks, Cuban likes Lion's Gate (LGF), Rentrak (RENT), Insight (NSIT), Sigma Designs (SIGM), GuruNet (GRU) and some other small-cap names. His shorts include Interoil (IOC) and the small-cap Imergent (IIG). I am in general nervous about shorting, even in a bear market, so I won't comment on these two shorts. However, I will note the statistic that even in the down year of 2001, the CSFB Dedicated Short Bias Index was negative on the year. It's difficult to short, unless you have deep pockets to withstand the pain that comes from volatility. As noted above, Cuban has those pockets. I wanted to like Lion's Gate, particularly in light of Cuban's comment: "The only indie film library available, willing to leverage new media for revenue." Sounds appealing and also Lion's Gate is certainly a potential acquisition target for its library. That said, the movie industry just seems too volatile and too hit-driven to me, and although it might be a good pick, I don't think there's the same level of margin of safety that he has in his other picks. The two longs that I like are Insight and Rentrak. Insight operates in the IT services space, which I've
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