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as suggested/desired by TSI. members, I'm now establishing a little "thread" here, to share, in sequential, cumulative "lessons", my "PSYCLE's" success/expertise (with occasional small, cut losses along the way, of course) at taking advantage of the normal DROPS, in many stocks and groups, over time, in rotation....this is an EDUCATIONAL site, and specific "tips on current/future PUT candidates" will NOT be given here....only, actual, historical examples from the last few years, for educational/illustrative purposes....if you would like to have my "opinion" on any specific stocks "now", please e-mail me direct, and I'll try to help you....but not "here"...OK ? obviously, March 1997 is a decent time to LEARN how to possibly get closer, to actually having the potential to make money speculating on potential DROPS, many extended stocks may have, from "way up here".... FIRST--- important--- please read my recent post, reply # 40, on the "Shorting Stocks: Education, Strategies" thread....there you will find my first "lesson" on puts and shorting.... ---be sure to Printout/save all my future missives on this subject, and, over time, you'll have a sort of "book" on valuable nuances, ideas, etc. for exploiting the Downside, in individual stocks, from my "PSYCLE sm" point of view.... I have been trading well over 20 years, and found very, very few people know how to do this well, or teach it to others....there are no strings attached....I have NO "product" to "sell" at this time.... I just enjoy teaching others, valuable things, I know, that 95% of others, do not....especially PUTS strategy on overpriced/toppy stocks: now, today's quickie lesson # 2: * one overriding benefit to appreciate about the "short side", is that, BECAUSE so few people actually buy puts or go short, ever, ALL the money made/saved when a stock falls, is made by just a very SMALL % of people, right ? think about that....yet, SOMEBODY out there had to have sold that stock, or shorted it, near it's top, right ? * as I said in lesson # 1, the biggest keys, initially, are to, 1) master any unfounded "fears" that shorting is any more 'risky" than going "long"....it is not, and never has been any different....only the public's "perceptions" have been misinformed/damaged by the Financial community/industry/media....dig ? 2) most ALL individual stocks DO indeed top out at some point...there have been so few exceptions the last 100 years, not even worth questioning.... and their charts, will normally form one, of 2 or 3 specific PATTERNS, as they do top out....learn these patterns, always put STOPS, mentally at least, above the recent high to protect capital , diversify properly, and -- ONLY buy long-term, in-the-money PUT options, where suitable and proper for your situation and objectives. 3) and ONLY establish downside positions, at or near the highs.... do NOT "chase down", and do not short already depressed issues, no matter how "bad" they may "seem".....the largest, easiest PUT gains, occur, from the initial TOP, right ? concentrate your efforts there.... also, realize, that, after a big % rise in a stock, it's "relative strength", by definition, MUST be "high", right ? RIGHT AT IT"S EVENTUAL TOP....I will show you a few ways to get closer to knowing if it IS a top, and how to protect yourself from bigger losses, when/if the stock does not fall right away.... 4) last, back to the PSY-choligcal side....you should try to find comfort in knowing, you may be going OPPOSITE the masses, when you buy puts/go short....it is SUPPOSED to "feel weird"....that's why, when you are correct, you are rewarded so handsomely, for your "discomfort" ....dig ? remove ALL emotions, inbred (mis)beliefs about the short side, and LEARN how to do this, accepting some losses along the way. next lesson soon....thanks for your sincere interest....take care, | ||||||||||||
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