Rational logic to me is the opposite. If I like a stock and am confident in its prospects, it makes me happy when the price goes down. I can buy more cheaper. When a stock a like goes up, on the other hand, it is much more stressful, particularly as the stock approaches an area where it should be sold.
That makes logical sense, but over the past few years, going with the momentum has been a recipe for success (past results are no guarantee of future success!). Such as doubling up on QCOM when it hit 500 last year. Or any number of such runs. I imagine it runs the exact opposite for shorting. Things get carried to an extreme, but then they get "extremer".
On another subject, if I were a short, I think I would focus on some of the lower-tier companies than a name like Cisco. I think Cisco is important for the market, and thus it is worth following the co. even if it doesn't seem like a good investment (a matter of opinion). But one can hardly expect this stock to pull a priceline and go down 90%. Perhaps CSCO will go up, or tread water for a number of years. That means dead money for a long, but it is dead money to a short, too (except for call sellers). |
