" . As this position grew more profitable, all things being equal, it would have become a much larger percentage of the fund."
Mev, it works different when you are SHORT something. If you short a stock and it goes down, it becomes a smaller part of your portfolio. That's what I noticed in 2002 when I actually shorted a lot of stocks that went down, it's a lot easier to compound stocks you are long and make big gains, but when you are short something, it just becomes a smaller part of your portfolio, UNLESS you short more on the way down.