Never short based on the rationality of the market. Plenty of investors have been right and ended up totally broke.

On a personal note the worst investment I ever made was a short position where I was right, but six months too early.

Never short a stock, use puts. You define your maximum potential loss ahead of time. By doing so you can entirely remove the solvency factor in question. Then it becomes a matter of giving yourself enough time on the puts to be right (assuming your core premise is correct).