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 : Shorting stocks: Broken stocks - Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Vol who wrote (2212)	4/18/1999 2:02:00 PM
From: Vol	Read Replies (1) \| Respond to of 2506

QI Large Cap Shorting Screen Rule1=PriceTrading > 10 Rule2=AvgVolume6WTrading highest% 80 Rule3=PBook.FY > 3 Rule4=OpercashFlow.FY < 0 Rule5=RelStr < 20 Rule6=MCap.FY highest 5 52 week hold, April start, 12 week lag Stocks, no ADRs, all companies Date return/vs S&P/#total/#losers/ %losers 1 1998 Apr -27.6% -42.8% 5 3 60.0% 2 1997 Apr -2.4% -50.5% 5 3 60.0% 3 1996 Apr -18.0% -33.6% 5 3 60.0% 4 1995 Apr 13.0% -16.6% 5 2 40.0% 5 1994 Apr -17.4% -29.7% 5 3 60.0% 6 1993 Apr 6.0% +5.0% 5 2 40.0% 7 1992 Apr -56.0% -65.9% 5 5 100.0% 8 1991 Apr -10.0% -17.0% 4 2 50.0% 9 1990 Apr -11.8% -22.2% 3 3 100.0% 10 1989 Apr -42.3% -56.8% 4 4 100.0% 11 1988 Apr 10.9% -3.0% 4 1 25.0% 12 1987 Apr -7.8% +6.1% 5 4 80.0% 13 1986 Apr -21.0% -52.4% 5 3 60.0% 14 1985 Apr 6.0% -21.7% 5 3 60.0% 15 Compound -15.2% -30.2% 16 Mean -12.7% -28.6% 5 3 63.9% 17 StdDev 19.9% 22.9% Notes: 5 stocks not always picked, but have been since 1991. Underperformed the S&P by 28.6% with relatively low StDev.

To: Vol who wrote (2212)	4/18/1999 2:11:00 PM
From: Vol	Read Replies (1) \| Respond to of 2506

How to handle shorts gone bad in a screen: I need a good defense for a short gone bad. Every now and then, my screens will pick out a stock that will skyrocket. BTW this is usually due to a rising market/rising tide. I've gone back and looked at the stocks that ended up 50%, 100% or more at the end of me holding period (6-12 mo's) to see how they did afterwards. 80-90% fell back to near the short point within 6-12 more months. Very rarely did a shooting star emerge; it usually looked like the last manipulation of a broken stock before it gave up the ghost. Still, I need a plan for not letting one runaway kill the gains of the rest on my shorts. I'm afraid of buy stops b/c of the whipsaw effect. I've thought about buying puts, if available, to limit my loss. Any suggestions? Vol