Peter, I hope you don't mind my saying so, but in my opinion your short strategy can be counterproductive. It is just impossible to catch the top when you short or the bottom when you go long. If you cover a short after a less than 15% runup, you'll likely keep covering with a loss. For me, I carefully evaluate the fundamentals of the company before I short it. Once I'm convinced, I'll just add to my short for every 20% price increase. In the end, as you know, the stock will drop and you'll be well ahead. I first shorted VVUS in the high 50s, added more in the 60s, and more at 80. The rest is history. A couple of weeks ago, I initiated a short position on CIEN at 28 1/2 . A week later I added more at 36. Today it closed at 25. In both cases, the fundamentals of the company simply can not support the going market cap. And given time, a stock will eventually trade at its fair value. Obviously we can cover sooner than that.
I shorted CDRD at 12 1/2 and am holding.
Regards,
Tom |
