I was sort of hoping to log in and see NSAI news this am...even though I'd prefer to see it hit at 9:31 or during lunch hour/trading hours.
I've only experimented with shorting a stock once. Let me tell you how extremely overbought, overvalued and for how extraordinarily long that situation can exist! About 8 years ago I became knee deep in SIRI, ok neck deep. I was having a ball with trading and accumulating more and more SIRI...first getting in at about .60. I had single day acct. balance increases back then that were absolutely staggering in hindsight. Too bad it slipped away in the coming years. Anyhow, when the stock got to $3ish, I'd sold off at least half and by $4 to $5 had sold off about all of it because it was imo way too toppy, overbought, ta was screaming to take gains. When it hit $6ish, I thought wow...extreme bubble, so maybe I should short some shares while waiting for it to settle! Ha, how stupid...over what must have been months, the stock marched on to about $9.50, then only very very very very slowly came back down to where I could cover without losing more than I cared too!! It was a lousy experience. I learned I'd rather leave my money in cash, or put it in a bond etf while waiting for an "overvalued" stock to settle back to where I would want to reload for more shares than I sold.
That story got more odd, as I ended up buying quite a few SIRI shares in the .06 to .14 range recently...took a free ride on those at around .20...did lots of swing trading of the free shares and it's currently $2+ and I have very few shares left of SIRI...but it's financed dozens of other trades...including many of over 100 US listed china stocks I dabble in...which are currently beaten down and bloodied "junk", but will likely soar again some day, just like SIRI.
Long story, but back to HDY. How high is "too high"? Nobody knows, but a stock can stay "overbought"/"overvalued" a lot longer than shorts can remain solvent. SIRI is an amazing case study in human nature/investor psychology. In HDY's case, prior to Ray saving the day, HDY could remain undervalued a lot longer than many longs could remain solvent too...sadly we lost a lot of shareholders during the late stages of prior management.
I don't like the concept of betting against businesses so much. I understand the legitimate role of short selling in preventing asset bubbles, but...in general, short selling up and coming spec. cos. seems destructive to me. Hopefully Ray will soon teach HDY short sellers some lessons about PAIN.
