WFC - I am not shorting expert at all, but IMHO you never short strong companies. Even if they fall, they always fall last and when they bounce, they usually bounce faster and higher. Of course, these are just general observations. Other reasons are that you just suspect that they are having problems. Now, if you are right about the problems, then the short is smart thing to do. But if you are wrong - and the last quarter results were great, so it's not obvious that they have a lot of problems - then you would be in a lot of hurt.
Also, I did not kid about Buffett. Why would you insist to be on the other side of his trades, I am not sure. He owns large chunk of WFC, he is buying more, he knows the management, he knows the risks much better than any of us could even imagine. Sure, he cannot buy the whole bank, but make no mistake: WFC and USB did not collapse partially because all hedge funds know that it is risky to go against Berkshire. If either of these banks came under serious pressure, Buffett would provide any capital needed in a blink (unless there was negligence or fraud, but this is unlikely). IMHO, it is not smart to play short where the bottom is set not by herd market, but by someone like Buffett. WFC is not going to zero unless Buffett decides otherwise. And shorts for 10-15% gain is just children's play - unless you are professional trader and only spend time on this.
Finally, you say: felt it was a matter of pride to close this one out with a profit as well. This just shows gambling and ego. Both of which cost a lot in markets. ;) Beware. :) |
