I agree, look at JB3729's short friend in this context: there are many actors upon the investment stage that play a different part than what they feel. It is when they begin to feel they are that part, not themselves, that it makes a big difference. They may say they know the fundamentals, and they may say that they have understanding, but if they do not act in that way, then that is a graver problem, because it is not done in ignorance but fear, panic or greed.
Yeah, and the challenge with that "boxing" strategy is you have to be right 4 times or you start canceling your gains or losing your shirt altogether.
1. Start shorting when it is going to pull back 2. Go long on your hedge shares when the prices is about to go up 3. Sell your long hedge shares before it pulls back 4. Cover your short position before it runs again
That strategy takes an awful lot of getting it right to be successful, and it involves locking up a lot of capital trying to neutralize bad short investments. Going long on a good company or short on a bad company sounds like a much more sound investment strategy to me than betting against a rising star and coming up with complex strategies to hedge your losses. All just my opinion though.
The boxing strategy would help explain the insane volume on a stock with a relatively small float. Thanks for the info JB3729
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