Bob, it may be safer not to try to pick the top of YHOO and the like, but do you and Barbara really think you can catch them on the way down. Just since November (so not including the Oct mini-crash), YHOO has fallen more than 10% on six occasions, three of those for more than 15% and one of about 23%. In January BTW, it fell about 18% in the first week and a half of the year (could that have been profit taking in the new tax year Barb?), then rallied and fell again to a lower low. How much of a decline would it take to convince you that, this time, the fall is for real and not just another bear trap?
OTOH, if the fall is triggered by bad news like CD today, these stocks could fall 40% or more literally overnight. Probably wouldn't be a good idea to short then, so you're left with trying to pick the top of the bounce. But you don't want to pick tops, right?
Are puts the answer? Only if your timing is very good (or lucky). And don't try for a home run because another rally may be coming any minute to wipe out your profits then the steep premium you paid (D'oh!).
Is there an answer? Maybe not, but with them spiking like this, turning over the float about every 1.5 days, and even most bulls acknowledging the ridiculousness of it all, it sure is tempting to top pick.
Bob |
