re: when shorting is so predicatble, it is dangerous.
Not all that predictable. From the November 2000 low to the January 2001 high, the SOX went from 500 to 750, a 50% upmove. And, this month, we had a 32% upmove (so far; is it over????) from 455 to 600 on the SOX. Lots of opportunity recently, for shorts to get squeezed.
I've actually made more money this year in short-term long positions, than in short-term short positions. At the top of their ranges, I short the most overvalued techs (in the sectors I think I understand). Then, I go long on techs I consider relatively undervalued, when they are at the bottom of their ranges, or setting new lows.
Unfortunately, my longterm long positions continue to sink. Hopefully, this rally will go high enough that I can exit all my remaining LT positions, without too much pain. I keep on waiting to exit QCOM at something close to the 67 where I bought it last year, and it keeps on receding further away. I've held MSFT LEAP calls, for almost a year now, they've done nothing but lose time value.
I think the key to making money on shorts, is to wait until there is a bit of hope returning, wait until the stocks have made 30% upmoves from recent lows, wait till people are saying: "it's just an inventory correction", "I see the light at the end of the tunnel", "Nasdaq back to 3000 by year-end". |
