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One of my other rules is that my short margin position is never riskin gmore than 10% of my long protfolio - I HATE being dependent upon other people becoming rational. I also have never gotten to that level of margin - cowardice perhaps.

And yes, if you would seriously consider owning the company you are planning to short - DON'T. You have enough against you to begine with - irrational emotion, tendency of all stocks to go up over time, what you don't know about the company and its environment. The last thing you need to have going against you is all of the positives (management, rev growth, defensible moats, etc.) that would cause you to consider owning it.

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