WHEN I'M CONFIDENT about a trade, I don't hesitate to back up my opinions with serious dollars. If a market in which I have a position is confirming my outlook, I'm aggressive in committing capital to take advantage of the move. Some work out, some don't, but I bet big on those trades in which my confidence is highest and the price action is most attractive.

Yet too often we're not as selective, or discriminating, about where to place our wagers. In fact, after appearing on television for many years, I don't ever recall hearing a fellow stock-market pundit answer "I'm not sure" to any question about a particular investment. Indeed, in the frenetic world of buy, sell or hold, there's a tremendous pressure to offer a strong opinion on every market under the sun. From National City to natural gas, the dramatic headlines almost compel you into either the bullish or bearish camp.

When markets are volatile, as they've certainly been in recent days, there's even more of a temptation to aggressively take sides, even when you're not necessarily committed to either one.

As I've been pointing out for a few months now, there's been little true leadership amongst stocks, whether big caps or small caps, foreign or domestic. And despite last week's rally, the picture really hasn't changed. Many stocks have stopped falling, but few, at least for now, seem to be emerging as new leaders.

I know what I like, and although investor pessimism is high, normally a bullish sign, I don't gravitate toward buying markets that have experienced recent and significant weakness in price. Leave that to Ariel Capital's John Rogers and value guru David Dreman, as far as I'm concerned. It's simply not my game.

To that end, I see equities, at least for now, as remaining a relatively low-probability bet. While I'm tempted to play a dead-cat bounce in financials, I also know that one need not buy the bottom of a move in order to make money on a move. Right now I'm holding on to existing positions, but not shuffling a lot of new money into stocks.

Eventually new leadership will emerge, be it technology, pharmaceuticals, banks or perhaps specific countries such as previously hot emerging markets or even my personal favorite, Japan.

A future bull market could stem from a combination of a few of these ideas, or none at all. I'm not ashamed to say that I don't know. To that end, this week, I'm content to sit on my hands, wait and watch.

Overstocked and Underwhelmed

Online retailer

Overstock.com

Amazon.com

eBay

In response, you can expect Chief Executive Patrick Byrne to blame naked short-sellers, who he's frequently cited as having a negative impact on the company's shares. Since 2005, he's sued Wall Street firms, a hedge fund and a research outfit.

Get Shorty

A similar chorus of criticism is also being levied against short-sellers in financial shares such as Freddie Mac and Fannie Mae, which prompted the SEC to tighten rules for selling short shares of 19 financial firms.

But was it the shorts that pushed shares of Overstock down 40%? Or could it be that the company has posted a loss every year of the past decade? Or, of the five analysts tracked by First Call who follow the stock, none recommends buying it?

Executives who rally against short-sellers would be best served by improving their company's finances, rather than worrying about who may or may not be trading their stock. The shorts can't keep a profitable and successful company down. Unfortunately, the fundamentals suggest that Overstock simply isn't that company.

Jonathan Hoenig is managing member at Capitalistpig Hedge Fund LLC.

Also See:

• 

  Uncle Sam Should Stay Away From Freddie, Fannie

• 

  Past Price Action Gives Glimpse of Stock's Future

• 

  South Africa's Rand Makes for Bold Trade