well, buck, if you can understand all that fibre stuff you should be able to understand these simple lessons from my recent experiences...
--In general, one of those "duh" points, short-term plays are different from long-term plays. In the long term the fundamentals will out, so keeping track of those is all that matters. In the short and medium term, however, you can (and probably will) get bitten on the a$$ by nasty things, and so you need to watch carefully and plan accordingly.
--Also in general, and another "duh" point, margin is dangerous because if you're carrying too much of it a severe downturn can force you to cough up cash at precisely the wrong moment, thus turning your long-term plays into short-term ones.
As for specifics regarding short-term plays, here are four. I suppose they all apply to common stock purchases, but with even greater force if (like me) you're dabbling with options as well:
1. Don't average down on falling knives unless you have excellent reasons to believe good news is coming real soon. (I learned this from ANCR.)
2. Don't jump on shiny pebble momos a week after everybody else, when they've just had their crazy run-up and are about to pull back. If you're momoing, do it quicker and better than others, not slower and worse. (I learned this from ELON and LHSP.)
3. Don't carry so much margin that a sudden 30% drop in your stocks puts you in danger. It can happen, and in this market, it will. (I learned this in March generally.)
4. Most importantly, when you've had a run so quick and incredible that you can't believe your eyes, and you get queasy thinking things are way overbought, don't get greedy and say, "one more week of this and then I'll sell." Do it then, leave a little on the table if necessary, and use the profits to fund other short-term gambles another day. On short-term plays, unlike long-term plays, that queasy voice is probably something worth paying attention to. (I learned this from CREE, NTAP, and EXDS.)
In the end, I see no harm in being a tortoise with a little rocket (leverage) strapped to your back, like in those high-speed internet access ads I've seen. You just have to know what you're doing, be comfortable with the risks you're taking, and watch out so your tuches doesn't get scorched by the afterburner.
tekboy/Ares@shaken,notstirred.com
PS Hawk, re "BT,DT," now I can say it too... :0) |
