> I'm adding a few shares to my few shares as stock
> keeps falling, but am not liking it and am not
> comfortable with it. Fall,add,fall,add,fall,add.
This has been my value-oriented strategy for Citi:
Fall,short,fall,short,fall,fall,short,short.
I almost never short stocks, but Citi has been the exception for me. The signs were so clear months ago, and the "hope" factor in the market so high, that I couldn't resist, and my short position has only been growing. My three tests for going short are that rare situation where:
a) the potential rewards are so much larger and more likely than the risk of being wrong,
and most importantly
b) there is some kind of time limit or horizon(s) at which the basic premise of the position is tested.
c) there is some vague hope or fear involving a national/global catastrophe that temporarily erases the facts of basic math, science and common sense.
The imaginary Y2K "crisis" satisfied all three conditions perfectly and for me was very lucrative (anyone remember ZITL and friends?). I view the subprime crisis the same way (with Y2K "fear" replaced by solvency "hope"). I do hope your long position works out eventually but for now I have to follow the numbers.
Kevyn |
