From a Short Seller’s Journal Subscriber: I just read the piece on Denver homes and the idea of taking a lower price. $100,000 less jumped out. We are selling our overpriced turkey in the clouds in a posh area of Nevada where stupid money goes to die.
Our contract price is $115,000 less than an appraisal done 4 months ago. All the realtors think that prices in the hills will continue upwards. I know better and locales like this are primed for a very ugly drop. That’s our reason for taking $115,000 less than appraisal value
The first horse out of a burning barn gets scortched the least . Thank you for that tip Worth the price of the newsletter times 10 or 20…
[Note: He’s referencing the July 9th issue of Short Seller’s Journal, in which discussed the high-end housing areas in Denver with respect to nothing moving but that a $100k price drop by the first seller will move that house and then re-price the entire market. Homes are like junk bonds – they go from being “illiquid” on the offered side to being “illiquid” on the bid side until someone initiates “step-function” pricing to force the first real trade and define where the bid side cares]
FYI: $CMG closed at $395 today. I recommended shorting it in the May 2nd issue at $475. That’s a 17.8% unannualized ROR in about 10 weeks. The subscribers who bought puts did even better…
WTF, did you see Az mining around noon today?
You mean with it dropped from $2.50 to $2? I think that was some kind of mistake. It shows 400 shares trading. I wasn’t watching the mining stocks too closely this week. The trading is thin and the sector is under heavy attack from the banks and momentum-chasing hedge fund algos.
The COT report is setting up for a huge move higher at some point in the next 4-6 weeks. Until then I’m spending a lot of energy right now on looking for short ideas. Some of my ideas like CMG have been killing it.
Please excuse my ignorance but are you referring to moves higher in minming stocks, PM spot prices, or both?
Dave, interested in the short sellers Journal. My question
is when suggesting particular equities to short do you also
provide which puts that should be entered into ? Thanks.
I typically will provide a couple of different suggestions for using puts. The key to shorting is to have patience, plan to have a 6-12 month timeframe, use stop-losses and leave room to add to a position. Short shares outright is the best way to make money shorting stocks, even if you only short 10 shares or 20 shares. A 10-share short in TSLA two weeks ago would have paid $700 with no cash equity capital commitment and only $1900 of margin required posted. That’s a 38% ROR in a week on just $1900 committed.
But I use puts and I discuss using puts and I discuss my use of puts. Try it out – there’s no minimum time commitment and if you decide to cancel you email me and I cancel the account ASAP.