Anthony @ Equity Investigations, Dear Anthony, Message Board

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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony,

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To: Steven Finkel who wrote (7714)	1/31/1999 1:22:00 PM
From: jlib	Read Replies (4) of 122087

Steve, capital preservation is the most important thing. If you believe you might be in danger of a margin call if there were a several point surge in the morning, you really should close out enough of of your position to weather the storm. Of course if it gaps up to a margin call for you before you even get a chance then you're screwed. The problem with establishing any short position is that you need to sell into the spikes which means you are usually always in an exposed upside-down position for a while unless you actually pull the trigger on the very tick before the bid collapses. Once it collapses you aren't going to be able to short it. So, there is your dilemma: if you buy back in at, let's say, 16, to cut your losses and then it collapses you won't be able to get back in. If it goes to 20 and wipes out your margin you are in even worse shape. Since you already took your long profits you should have some buffer there but really it just comes down to making a lonely decision and sticking with it through any pain. For me, if it hits 18 I sell the rest of my allocation and if it hits 25 I'm gone, wounded and battered. So, I actually want it to go up a bit in the morning to absorb any yahoos. Once they are gone the bid will collapse and those who bought at mid-single digits and below will take their profits and the stock will crash. I don't believe this will be a 3-day affair, either. On Monday everything will happen in accelerated time. My agenda is set before hand so decisions are made coldly and unemotionally. I already pretend I've lost it all. The funds are already written off in my head. There is no emotive charge anymore. But that is just what works for me. You need to heed your own sense of timing and your own knowledge of the precarious fundamental condition of the stock and your own expectations regarding whether the hype on this stock will be able to find that one more greater fool before it collapses. Even most of the longs know it is going to collapse. Other than that there is just no way to know it advance how it will play out. Gird your loins for battle and plunge in. Best, Jimmy Liberato

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