I tend to maintain a large number of very small positions, as opposed to a handful of huge positions.
In doing so – particularly these days, when I am focused on finding high-quality shorts – there are usually a few stocks each week that bear fruit in a big way on the bearish side. Here, for instance, are a couple of shorts I am in which tumbled nicely today:
What I try to remember about events like these – – as with my STEC example yesterday – – is that big drops often establish a new, predominant trend in the security. I shorted these stocks in the first place because I felt there was as lot of room between their present price and their support levels. I'm hanging on to both of these – with tighter stops now – based on this assumption.
