Go to Jeff Salisbury LWGate Home Page.From: "David Taggart" <dctag@mavericktrading.com>
Subject: RE: [CANSLIM] Shorting
Date: Fri, 22 Nov 2002 18:17:12 -0700
Previous Article (by Author): [CANSLIM] Volume and CWH (was M) "Curt Corley"
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Another thing regarding shorting is that I have found it doesn't hurt as
much to take some profits a little early as It does on the long side.
- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com] On Behalf Of David Taggart
Sent: Friday, November 22, 2002 6:10 PM
To: canslim@lists.xmission.com
Subject: RE: [CANSLIM] Shorting
Gene,
I think that really the only concept that shorters NEED to know well is
risk control. Luckily most people that finally wake up and see the
light (actually are willing to short) realize that. For that matter
Risk control is about the only thing that is imperative in any
investment/trading method. Risk aside I think inverted CANSLIM works
like a champ. I add and take away a few things but mainly I like it to
have huge debt levels. I made some money on a few cable companies back
in the Adelphia days. Unfortunately I was only short two stocks and I
got out of one way to early the other one I made some good money on
though. I also don't require a stock to be above $12 for a short. I
only require it to be above $6 though I have shorted a few right above
$5. Another point on shorts is that while numbers like 50 and 100 might
be resistance for longs it is for a purely psychological reason. But on
the way down stocks have two important levels $10 and $5 A lot of
pension funds and some other institutional types are not allowed to hold
stocks that are under $10 so a lot of times it is a good area to take
some profits because they tend to support them for a time. $5 is a
strong level because once they are below $5 they aren't marginable so a
lot of holders have to sell. So it is an area to be watched both for
people trying to support the stock and for when it breaks below a lot of
times it will go $.50-1.00 the same day due to all of the selling.
Fundamentally I mentioned High Debt levels. I also like (actually
require) large institutional holdings like above 60% and ideally above
80%. One thing I heard from Cramer once that made sense (actually about
the only thing that has made sense from his mouth) is that you can look
at the holdings for Janus funds and if it is a large holding in their
portfolios then it is a good shorting idea because they have had to sell
a ton to meet redemptions. Of course Janus isn't the only fund company
that has seen way better days.
Some people that get in the news sometimes that are worth reading
regarding shorting are the guys at Gotham Partners, they do some awesome
research so when they go short they are usually right. David Rocker is
also a good short seller. Bill Fleckenstein is good too but his column
is TOO negative for me as opposed to him I don't think the world will
end next week. If you are a member of Tradingmarkets I love Mark
Bouchers stuff on trading and he has somne great criteria for shorting.
Another person who you get to hear from on occasion in the news in
Ahtmet Okomus he is a smart guy and really does his homework. In
general Short-Sellers are better at their homework than the long side
crowd.
But like I said at the beginning Risk Control is the most important part
of trading short or long so I would obviously stress that.
Another thing I just remembered is that many people think that you can
only make 100% on a short. That is not true. As the stock drops your
equity grows so you can short more and more as it goes down while
staying at the same margin level.
Good Luck,
David Taggart
- -----Original Message-----
From: owner-canslim@lists.xmission.com
[mailto:owner-canslim@lists.xmission.com] On Behalf Of Gene Ricci
Sent: Friday, November 22, 2002 1:16 PM
To: canslim@lists.xmission.com
Subject: [CANSLIM] Shorting
I'm trying to develop a training module on shorting for our local user
group and want to start with an outline. I would really appreciate your
inputs on the minimum concepts that an investor must know before adding
shorting to their bag of tricks?
Thanks in advance,
Gene
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<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'>Another thing regarding shorting is =
that I
have found it doesn’t hurt as much to take some profits a little =
early as
It does on the long side.</span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'> </span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DTahoma><span
style=3D'font-size:10.0pt;font-family:Tahoma'>-----Original =
Message-----<br>
<b><span style=3D'font-weight:bold'>From:</span></b>
owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com] <b><span
style=3D'font-weight:bold'>On Behalf Of </span></b>David Taggart<br>
<b><span style=3D'font-weight:bold'>Sent:</span></b> Friday, November =
22, 2002
6:10 PM<br>
<b><span style=3D'font-weight:bold'>To:</span></b> =
canslim@lists.xmission.com<br>
<b><span style=3D'font-weight:bold'>Subject:</span></b> RE: [CANSLIM] =
Shorting</span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'> </span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:navy'>Gene,</span></fon=
t></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:navy'> </span></fo=
nt></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:navy'>I think that =
really the
only concept that shorters NEED to know well is risk control. =
Luckily
most people that finally wake up and see the light (actually are willing =
to
short) realize that. For that matter Risk control is about =
the only
thing that is imperative in any investment/trading method. Risk =
aside I
think inverted CANSLIM works like a champ. I add and take =
away a
few things but mainly I like it to have huge debt levels. I made =
some
money on a few cable companies back in the Adelphia days. =
Unfortunately I
was only short two stocks and I got out of one way to early the other =
one I
made some good money on though. I also don’t require a stock =
to be
above $12 for a short. I only require it to be above $6 though I =
have
shorted a few right above $5. Another point on shorts is that =
while
numbers like 50 and 100 might be resistance for longs it is for a purely
psychological reason. But on the way down stocks have two =
important
levels $10 and $5 A lot of pension funds and some other =
institutional
types are not allowed to hold stocks that are under $10 so a lot of =
times it is
a good area to take some profits because they tend to support them for a
time. $5 is a strong level because once they are below $5 they
aren’t marginable so a lot of holders have to sell. So it is =
an
area to be watched both for people trying to support the stock and for =
when it
breaks below a lot of times it will go $.50-1.00 the same day due to all =
of the
selling.</span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:navy'> </span></fo=
nt></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:navy'>Fundamentally I =
mentioned
High Debt levels. I also like (actually require) large =
institutional
holdings like above 60% and ideally above 80%. One thing I heard =
from
Cramer once that made sense (actually about the only thing that has made =
sense
from his mouth) is that you can look at the holdings for Janus funds and =
if it
is a large holding in their portfolios then it is a good shorting idea =
because
they have had to sell a ton to meet redemptions. Of course Janus =
isn’t
the only fund company that has seen way better days. =
</span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:navy'> </span></fo=
nt></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:navy'>Some people that =
get in
the news sometimes that are worth reading regarding shorting are the =
guys at
Gotham Partners, they do some awesome research so when they go short =
they are
usually right. David Rocker is also a good short seller. =
Bill
Fleckenstein is good too but his column is TOO negative for me as =
opposed
to him I don’t think the world will end next week. If you =
are a
member of Tradingmarkets I love Mark Bouchers stuff on trading and he =
has somne
great criteria for shorting. Another person who you get to hear =
from on
occasion in the news in Ahtmet Okomus he is a smart guy and really does =
his
homework. In general Short-Sellers are better at their homework =
than the
long side crowd.</span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:navy'> </span></fo=
nt></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:navy'>But like I said =
at the
beginning Risk Control is the most important part of trading short or =
long so I
would obviously stress that.</span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:navy'> </span></fo=
nt></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:navy'>Another thing I =
just
remembered is that many people think that you can only make 100% on a
short. That is not true. As the stock drops your equity =
grows so
you can short more and more as it goes down while staying at the same =
margin
level.</span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:navy'> </span></fo=
nt></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:navy'> </span></fo=
nt></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:navy'>Good =
Luck,</span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:navy'>David =
Taggart</span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
color=3Dnavy face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;color:navy'> </span></fo=
nt></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><font size=3D2 =
face=3DTahoma><span
style=3D'font-size:10.0pt;font-family:Tahoma'>-----Original =
Message-----<br>
<b><span style=3D'font-weight:bold'>From:</span></b>
owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com] <b><span
style=3D'font-weight:bold'>On Behalf Of </span></b>Gene Ricci<br>
<b><span style=3D'font-weight:bold'>Sent:</span></b> Friday, November =
22, 2002
1:16 PM<br>
<b><span style=3D'font-weight:bold'>To:</span></b> =
canslim@lists.xmission.com<br>
<b><span style=3D'font-weight:bold'>Subject:</span></b> [CANSLIM] =
Shorting</span></font></p>
<p class=3DMsoNormal style=3D'margin-left:1.0in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'> </span></font></p>
<div>
<p class=3DMsoNormal =
style=3D'margin-right:0in;margin-bottom:12.0pt;margin-left:
1.0in'><font size=3D3 face=3D"Comic Sans MS"><span =
style=3D'font-size:12.0pt;
font-family:"Comic Sans MS"'>I'm trying to develop a training module on
shorting for our local user group and want to start with an outline. I =
would
really appreciate your inputs on the minimum concepts that an =
investor
must know before adding shorting to their bag of tricks?<br>
<br>
Thanks in advance,<br>
Gene</span></font></p>
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