On this blog, I'm far more interested in discusses my weaknesses (which are many) as opposed to my strengths (errrr….I draw pretty charts and can sing almost any Broadway tune).
One of these weaknesses – – although it's not a horrible one – – is the inability to short stocks that are so battered that it seems that the train has already left the station. In other words, I love shorting stocks that seem like they have plenty of room to fall, but I'm reluctant to short those that have already been beaten to smithereens, since I just don't see how much more they can fall.
The fact is that plenty of weak stocks merely get weaker (like, say, AIG). The chart below, of Genko Shipping, is a case in point. As you can see from all the lines, I've been tracking and marking up this stock for a while. However, I don't trade it. This is a pity, because this thing seems to be on a one-way trip to zero.
Let me offer another example, and perhaps some of you might be intrigued enough to actually short it (I will no be doing so, for the aforementioned reason). Corinthian Colleges, shown below, has been falling pretty much non-stop since last April. Today it went to lifetime lows. What's the lowest this thing could go? $0.00, I suppose. Again, I'm not touching it, but perhaps some of you bolder souls might consider this an intriguing idea.