The Matrix Series: Shorting ForceProtection

Discussion in 'Stocks' started by michaelscott, Jun 2, 2007.

  1. Some people on live in the Matrix. All they know is one market, one world, that they have traded since 2003 when the old tech traders went bankrupt and the new breed entered the scene that would forever buy the dips into oblivion. Guys like Makluda, or whatever his name is, really believe in this market buying the dips and they have made good money. Now they are about to give it up as they soon find out that they are now living in the Matrix.

    I too was one who thought we live in the perfect world of the bull market that goes up forever, but I have since found that the world is very different.

    I am one who lives in the world outside of the Matrix, one dominated by hedge funds and programmed trading. I know that the world that Makluda lives in will soon end as the nasty ten year yield shoots to 6%+. The attitude that the Makluda traders take is that the market survived well during the 80s-90s at much higher interest rates. OHHHHHH....think again my friend. Think again. The rising ten year is a nasty thing that will test the very nature of the marketplace as we know it. The new economy only knows low interest rates and has not learned to live with 6+% yields.

    Previously I had written that FRPT was a great short(in the short GOOG, RIMM, MA thread) and then it fell on Friday. Did I have inside information about the Navistar deal? Nope. I simply knew that we are living in a world dominated by another power. The world of buying on the dips is ending now and will be replaced by the new economy.

    The hedge funds knew well in advance of the navistar contract as evidenced by the price action and volume.

    The price is now being forced into a triangle. I saw this coming for a while and so I shorted it hard at 30 dollars and change as it hit the roof of our triangle. Then it came down and I covered at 27. Now I await for it to plunge through the bottom of our nasty Bermuda triangle. Then I will take up my largest short position yet.
  2. Don't short this until the trend reverses decisively.

    A missed earnings report usually does the trick as the case with TASR back in 2004 when it missed Q1 estimates and fell from 60 to 40 (and then tanked to 30)

    Now it trades at $10

    Wait for that nasty 20%+ one day sell off.
  3. Michael , did you short this stock outright? this stock has been short restricted for quite awhile and thats what is contributing to the excessive runup.