I see in the comments section that many of you are taking losses on your shorts. A few words of wisdom:
- The time the research comes out is the time to act on it. Since I do not currently offer quantitative or timing services, look at the historical price chart and ascertain whether you should jump in or ease into the position. As Shaunsnoll stated, the spreads and the implied volatility on the thinly traded stuff is murder. I fight with the lone market maker on many of my positions daily, and it often takes up to a month or more to fill completely. I wait for irrational price movements to fill my orders in lieu of chasing behind wide spreads, which put you behind by default.
- If you short, use protection.
- I take a longer term time horizon. I can't predict the future, and I don't try. I find someone who is in trouble (or about to do really well), take as inexpensive and as efficient position as possible, then dig in and wait to see if my thesis pans out. Consider me a private equity/venture capital style investor that goes long and short in public markets.
- The markets are as volatile as I have ever seen them. Expect significant drawdowns. 2/3rds of you are not managing other people's money, so you don't have to worry about quarterly performance, and the other third need to educate your clients on the realities of today's environment. The only way to make money without a drawdown is cash, which is a guaranteed loss in real terms. For individuals, don't short or buy speculative derivatives with money that you can't afford to lose, period!
- I oftern release my bearish research before the crowd turns bearish, or at least before the crowd realizes exactly how bad the situation actually is. Taking this in consideration, if you ride a company down from $25 to $10, you should have taken or locked in profits. You can speculate with the house money on further decline, but profits should be locked in once they are achieved. I tell my children that I always leave the last dime on the table, primarily because picking up the dime usualy cost about $1.20.
- If you are a retail subscriber, be aware that much of the researched information necessary to accurately speculate on further price action (past the opined price in the report) is contained in the professional or higher packages. That is what those subscribers pay for, and if you want a richer set of assumptions, macro arguments and justifications to power your speculation, I strongly suggest that you upgrade.