Shorting a stock is the exact opposite of buying a stock. When you short a stock you are hedging your bets that the stock will go down in price unlike when you buy a stock and believe the price will go up.Many investors try and short a stock way to early as they believe the stock price is way overvalued. However many times a stock that is overvalued in price may become even more overvalued especially when the stock market is in an extended upward move. The proper time to short a stock is after it has encountered its first major sell off and bounced which sets the stage for a second stronger move to the downside.Let’s look a specific example form the Spring of 2003. COKE made a strong run from July of 2002 until January of 2003 and gained nearly 75% over a 6 month period.