[Leeb06]

I assume that when you mean shorting through options that you are talking about buying puts or doing a spread where you do it for a debit.

I have no issues with shorting stocks and have had success in doing so, but you need to be operating truly within you circle of competence. It isn't a matter of understanding why the company is missing its earnings, but also to understand what is happening behind the scenes that might lead to improvement within the company.

The Rule 1 evaluation of a company is a guide to indicate companies that may have the foundation for future growth. Once a company has been discovered you need to continue doing research until you feel comfortable that the company will continue to grow at its current pace. When shorting a company you need to do additional research and focus on why the company is valued so high. In BVN's case remember you found the name because it had 10 years of growth in Equity, Revenue, Return on Capital Invested and FCF. This doesn't sound like a company that is slowing down, there is a high multiple on the company for a reason. In the case of mining stocks, like biotechs, they are usually given a high multiple because of what they may find in the future. If BVN's current gold mine is to produce 5 years of reserves and infact they announce that they underestimated their findings or if gold continues to rally up to $1000/ounce then this company at $53 dollars might actually be undervalued.

If you feel confident in your research then go ahead, but don't trick yourself into trading with the idea that you can only lose as much as you pay for the option. The main focus of trading / investing is not to lose money. I never put on a trade that I am not confident will be successful regardless of how much money I have on the line.