Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: Joe Pirate who wrote (5673)	1/22/1999 8:00:00 PM
From: Sword	Read Replies (1) \| Respond to of 122087

You have not listed all of the scenarios. It is imperative that you do so in order to make the right evaluation. Scenario #3 You are long the $1.00 stock. The stock market goes against you. It sinks to a dime. You lose $9,000. You are nearly wiped out. You have $1,000 left. Scenario #4 You are short the $10.00 stock. The stock rises to $19.00. You are nearly wiped out. You have $1,000 left. Risk Mitigation: Exogenous factors (external factors): Stocks under $1.00 usually become penny stocks. The statistics are against the investor. Hyping and manipulation are common. Certain cases result in large percentage gains. This happens infrequently. However, when it does occur, the price usually comes back down very quickly. Conclusion: The risk is smaller to short the stock that has just risen from $1 to $10 when it is determined through DD that the fundamentals don't support the valuation. RISK MANAGEMENT is where its at! What about the cases where the price moves against you? Still, RISK MANAGEMENT is where its at! Use buy stops. Anthony's skills in this area are truly awesome. He impressed me greatly with his short of SKYM at 29 cover at 32-33 and reshort at over 40. Watch him. And all you guys who keep harping at him about covering temporarily at a loss: get a life before you wind up a pauper! The risk of halts is small in these cases. The stock has already been hyped and the news is out. If halts occur, they will usually be on the down side. A large percentage of daytraders lose their capital because they don't manage their risk. In my experience, it is easier to manage your risk as a shorter than it is as a long investor. Nevertheless, I DD on both long and short and listen to the experts. Only fools are so proud as to ignore people like Anthony, Auric, Pluvia and the other famous shorts. "A man of many counselors is not easily defeated." -Sword