Pancho
I would like to thank for all your efforts over the last year. I and many others have enjoyed your posts. I have lost some money on several short positions such as bft, amzn, envy . I remember your post on envy saying you did not think this was a POS and that it was a credible company, I should have listened. My only solace was at least I got out before the takeover.
My advice to others is as you have stated always take small positions initially in shorts, AND learn to take occasional profits even if small cause there are few homeruns. BFT is a good eg. if I had taken a smaller position initially I may have been able to ride it out to the eventual crash.
The most important advice I would like to pass on and few will heed
is you must learn to know when to get out when a position is going against you. Just as when you are long a stock, many people recommend
getting out if the stocks drops by 10%. Same you MUST know when to get
out of a short going against you. Simply read the whole AMZN thread
from day one and you will see hundreds of people who got killed thinking the crash was coming for AMZN. I'll be honest and have thought that it has been overvalued since being at 30. Thank god I didn't short it then.
Finally, this market is overvalued ( I don't agree with Abbey J. C.)and at one point will correct massively. However, the key is when. On almost every historical measure, the DOW and other indices are massively overvalued and most are at, or near, peak valuations. The bottom line is that it has been this way for almost two years now. Whether this market corrects big time from now or 20,000, nobody knows and I have learned painfully that it is impossible to time tops. It is much easier to know when some sort of a bottom, at least intermediate term, is in. As such, one must decide when one gets into a position, either short or long, what one's exit strategy will be. Take it from someone who has learned the hard way that you must know when to get out. The most important thing is to know and admit that you have made a mistake, take your lumps and move on. All of the sayings "the trend is your friend", "buy low, sell high", "don't time the markets" are true and wisely learned statements over time by many people but it is funny how few of us heed these simple statements. |
