Re: Shorting party poker
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When making a decision to short a company, whether or not the company is overvalued is not as important as the buyers and sellers perception of the company. Let's take google for example. Is the stock overvalued? By most measures, the answer is yes. Could it go up another $100 or more? Of course, as long as the buyers outnumber the sellers. Jim Rogers, a very successful investor, said he shorted memorex at $47; I was absolutely right, he said, because the stock went to $2. The only problem was, it went to $97 first. A short sellers losses are in theory infinite. That's why you only want to short sell weakness and use a stop loss to control risk. fwiw
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Nice post. I feel the same way about WPTE. It's way overvalued but could easily rocket upwards before going back to $12.
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