Yesterday morning, I got rid of my short in Dara Biosciences (DARA) at $5.15 for a decent profit but called it a pathetic exit. My exit turned out to be right around its closing price and I received several emails from people trying to comfort me, saying it wasn’t such a bad exit after all. But with today’s quick $1+ drop to $4, my call in this post yesterday for that exact kind of drop and my inability to hold and let the pattern play out, I began wondering exactly how similar are all these instances of this pattern? Sure my DVD is chock full of them (see an example HERE) and lately I’ve posted about them here, here and here, but maybe it’d be helpful to post them all together for once. Or maybe I’ve been staring at my computer screen far too long and I’m Fooled By Randomness?
Here are some recent examples of the pattern that’s haunted me for years, you guys be the judge:
The pattern cares little about what the overall markets are doing, isn’t exactly the same each time, price-action or volume-wise–it’s more of a general trend, it doesn’t discriminate by microcrap company—these are just the latest four in the last two weeks (last month, slightly higher priced COIN, SEED and AKNS displayed the pattern, which I wrote about here, here and here), the industry matters little—although three out of these four are biotechs, no does the exact price—just has to be low priced and each has its own “special” story, but in every case, message board pumpers claim “somebody knows something” and fickle day traders are involved long and short. Other than SHZ, all have been in serious long-term downtrends (hence my tired midget analogy) and probly the reason why SHZ is holding up better…for now at least.
I wish I was good at buying on the way up, but I’ve learned to accept the fact that I’m better at shorting on the way down. I definitely don’t have it all figured out, if I did I’d keep it all to myself and buy some nice little island like Iceland, but over the years, playing this one pattern has made me $1 million-plus, the top ranked short bias hedge fund manager from 2003-2006 (by Barclays) and now the top ranked trader/investor on Covestor. In fact, my oft-discussed losses came only when I strayed from this pattern. So, to those who say I only got lucky during the bubble, why don’t you suck on this for a while. Digest it. How does it taste?
Let’s hear what you guys think!
Posted in Breakdowns, DVD, Patterns To Short, Polls, Supernovas