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So far I have written four “Short Ideas” for Seeking Alpha, and my track record has been stellar.

My article on Crystal River (CRZ) was submitted when the stock was around 3.5, and as I write it is now at 2.18, down nearly 40%. In it I predicted that the company would in Q2 write down its book value from $5.33 per share in Q1 to either 2.38 or 2.44 per share in Q2, depending on whether there was a second write down on a defaulted junior loan to a Portland condo development.

When evaluating short plays of financials with falling asset values, a very profitable strategy for me the past two years, I look for three things: ownership of the declining assets, short-term or callable financing, and a high degree of leverage.

In 2007 such companies were easy to find. I shorted Thornburg Mortgage (TMA), where all three of these factors were present to a high degree, in August 2007 when it traded at 23.75. Now the stock is down about 99%, trading at 27 cents.  There are still plenty of companies like this with declining assets and high leverage, and at least a modest degr