“Cub investors are throwing in their lot with the bears,” writes Jonathan Clement in today’s Wall Street Journal.

“In recent weeks, I have received a flurry of e-mails from ordinary investors asking about market-timing strategies, selling covered call options and shorting stocks. This worries me.”

” ‘Every time the market goes down, shorting becomes a popular topic again and articles on market timing start appearing,’ says Chuck Zender, portfolio manager of Grizzly Short Fund in Minneapolis. ‘If you went back and looked at 1994 and 1990, you would have heard the same thing. People always talk about what worked best over the past 12 months.’ “

“But is it smart to bet on further market turmoil? I don’t think so. Such bets can go badly awry.”

“Got a stock that you don’t think is going anywhere? The temptation is to sell a call option against your position.”

“The call option commits you to selling the stock at a designated ‘strike price’ any time between now and when the option expires in, say, 10 weeks. Thus, if the stock climbs above the strike price, you will lose out on this additional appreciation. In return, you might collect a premium that is worth a few dollars a share and possibly more. ‘It’s like an extra dividend,’ suggested one of my recent e-mail correspondents.”

“But that extra dividend could come at a huge cost. If stocks rally, folks who have sold covered calls may find that they suffered through the bear market, only to miss the market rebound.”