Hi...Shorting the competition of a powerful technology is certainly one rational concept. You would study the situation and see if there is little management depth, alternate prospects, or even cash-in-the-til at Syquest. Can't comment on Syquest without doing such a check. By Telescan backtests, I found that a very low current ratio is a good short indication for small stocks, especially the cats and dogs traded on the American Stock Exchange. So, since this would be a longer term short, check out the fundamental strength and the amount of industry experience that Syquest's management team can claim.
Checking your strategy on Telescan in perhaps a superficial manner, I found that it has worked recently. However, if there is a strong market uptrend, it might be harder...you may have found a topping-out indicator...it would make sense that a high market would show flings-and-collapses.
The low short discussion frequency (except for some comments on puts in the options forum) may also be a high market symptom. One might actually start looking for a bull on the cover of Time magazine...and listen for 'new era' remarks in social chit-chat. It's gittin' late, but the music may continue for a year or more...I don't have a crystal ball. So, again, a general hedge would by a great comfort.
Regards, Logan |
