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Hopefully by putting pen to paper – or fingers to keyboard, more accurately – I’ll be able to reduce the likelihood of repeating the error I make with AKAM in my CAPS picks. I went short on AKAM because I believed the stock would tumble 5-20% when Q3 earning were announced; causing the P/E ratio to move from 24 to 100+ due to an acquisition tax shield rolling off the TTM. Well the event occurred and the stock retreated about 3% but I didn’t close the trade. So what could have been a small gain is now a larger loss as the company continues to perform well and the event I was trading against is now months old.


Lesson Learned: don’t hang on to an event driven trade if the underlying asset doesn’t react to the event in the manner predicted. i.e. Trades should not become Investments.


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