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Strategies & Market Trends : ahhaha's ahs
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To: Yamakita who wrote (3981)1/28/2002 10:18:33 PM
From: ElsewhereRead Replies (2) of 24758
 
Maybe a better way to understand the calculation is to think of it reversely: if you buy a stock for $0.30 and it reaches $60 it is a 200-bagger - you agree with that, don't you? Ok, so going from $60 to $0.30 by shorting results in the same profit, "upside down." Of course, going from $60 to $0.30 is a price reduction of 99.5% but that's not what counts - the important parameter is the return on investment. The investment is the price I pay to cover, the return is the initial price I get for shorting - with the twist that the usual sequence of first buying, then selling is reversed which can be confusing.

I felt obliged to post about the GX call because it is simply the best one I have ever experienced personally. It wasn't just a lucky hit but a projection based on a fundamental analysis of the company: the trouble arising from heavy investments for a product whose future price could be expected to decline. I very well remember the blindly bullish mood in 1999 up to March 2000. Major flames were directed at ahhaha for his prognosis, not only on the GX thread, but he stood by his judgment unflinchingly. He has made his mistakes, too (some ATHM, EXLN statements) - nobody is perfect - but the GX gain outweighs all errors by far. That's why I am hanging around here: I try to learn how to make such calls.
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