The short traders are unbelievable in their misplaced arrogance. They don't understand that long traders come up with fine shorts and can get out and go long while they are still patting themselves on the back and the rug is pulled out from under them. I have collected scores of 'short' trades from e-mails that have now increased over 200- 400% and seen only 3 or 4 timely shorts among the more than 44 shorts that went sour. Ironically, its the best 'short' trades like AMCC, PUMA, TLGD, CKFR that they failed to call but only depressed stocks that don't make the intraday moves the 'strong' stocks make. If I had their permission I'd post those plays, its incredible in their lack of accuracy.
We must learn however from these days or some mistakes will be repeated:
a) Never listen to 'professional' shorters, or if you do, the contrary to what they say. NEVER short on GUT FEELING. Short only "strong stocks that are off their highs" and expect to short up to 72 hours, even if you leave some money on the table. Ask shorters for their technical and fundamental analysis and the only answers you will get are more 'attacks' of the companies, their boards, their managements, etc. ad nauseum. Their hindsight however is always 20/20. They depend on margin players to make any kind of money.
b) Never use margin in any stock buys. You are playing into the hands of 'operators' who will take your money and depend on your using margin to make their own profits.
c) Try to get out after 10% or more gains UNLESS the stock and market is trending above 75% of days' highs and the TRIN, TICK and TIKI agree..
d) Never let a 52 year high go without a sell. Sometimes I would even sell short. I have paper traded a few short plays lately and I'm more ready for shorting the spike highs than ever. I'd rather leave some money on the table with TERN or EMLX than chance a rebound like today's in TERN.
e) Never buy the dips indiscriminately. when a stock drops more than 30-40% or so off their highs its very hard for them to get back to where they were. When they do, others will bail and you can drop again.
f) Never buy stocks with no earnings and take a vacation.
g) Never take tips from this or any other threads without doing your own DD. No 'bargain' calls or stocks that are going to 'move up tremendously'.. temper enthusiasm with facts, buy triggers and fundamentals. Even buy triggers go bad, but chasing stocks are worse. |
