James, look at the price chart of BOCI for the mid 1995 period. The stock price went up. Look during the early 1996 period, the price went up. Even late 1996, the stock went up. Under your supposition, the price went up because "somebody must know something". As you know the stock plummeted shortly after these rises. Many investors/traders take a gambling approach. More than one might think.
I don't short all that often, but my record has been pretty good.
You see, many times, once the fundamentals of a company changes, many investors (most I believe), have formed an emotional attachment to "their" stock. This usually is the way to loose money. But if one can capitalize on this, and buy into,(long) of sell into (short) these positions, this imo, is just one way to discover inefficiencies or undervalued/overvalued stocks.
Good Trading. LF |
