Re: Shorting (was Re: [CANSLIM] MCAF)

From: "dave@gordian.com" <dave@gordian.com>
Subject: Re: Shorting (was Re: [CANSLIM] MCAF)
Date: Fri, 18 Jan 2002 10:04:30 -0800

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> I guess the good news (for me at least) is that none of these are ones I own
> or hold in my VR fund, or have even been looking at recently. On the other
> hand, this suggests to me that your screening selection is giving you a list
> where the price already reflects bad news, and the excessive valuation has
> been stripped out of the price. When I shorted, I always wanted to find ones
> that were way over valued (bubble stocks) that were just waiting for the
> next (and hopefully terrible) earnings report to fall off the edge of the
> cliff. I didn't want to hold a short position long term, I wanted something
> to happen right away.
This has been my experience with shorting as well.
I look for high RS, low EPS and wait for them to break down.
I would typically look to get out with about a 20% gain and within a 
couple of weeks. Every once and a while I would find an over-hyped 
sector that was tanking. 2 years ago I made some good gains 
when everyone finally realized that the Linux stocks were a bit 
overpriced.
I haven't done any shorting lately because it does take even more 
diligence than going long and I don't want to spend the time.


Dave Farthing
Gordian Design Services
dave@gordian.com
http://home.socal.rr.com/pcbdesign/

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