Bill Wexler's Dog Pound Message Board

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Non-Tech : Bill Wexler's Dog Pound

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3:36 PM EST

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To: Dale Baker who wrote (2177)	7/15/1999 3:07:00 PM
From: BelowTheCrowd	Read Replies (1) of 10293

Dale, Agreed. I will rarely short a stock if I can't stomach an overnight double in price. Likewise, I'll never buy a stock if I can't suffer a 50% drop. More to the point, my golden rules: 1) Never open a position which is more than 5% of my portfolio value. 2) Never allow a position to grow to more than 10% of the portfolio value. 3) For "small cap" and other thinly traded stocks, replace the numbers in (1) and (2) with 2% and 4% respectively. 4) Always establish reasonable stop limits when opening short positions and stick by them. 5) Exceed these limits with only the most careful judgement. What this means is that I am intentionally forcing myself to take some profits (or, in the case of shorts, cover to limit my losses) if a stock price goes up dramatically. Certainly I've "given up" some profits along the way, also limited my downside when some stocks crashed unexpectedly. Overall done quite well. mg

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