(Harvest) While the 21st century has had severe market declines in 2001, 2002, and 2008, profitable short selling year in and year out has become more difficult. One major negative is the enormous growth in the hedge fund industry itself. The ability to borrow certain stocks is more difficult than before. A bigger issue is the tendency for many long/short funds to crowd into the same names. There are many managers who are outstanding on the long side and therefore understandably focus their attention on their long portfolios. As a result, some of these hedge funds, which manage multi-billion dollar portfolios, often rely on the same third party services for idea generation and/or frequently talk among themselves or through the press about the same ideas.
The Increased Difficulty Level of Successful Shorting
This entry was posted in Syndicated. Bookmark the permalink.
