- The shorts list contains a wealth of data
- (A glance over some short-influenced stock calls...)
- Lots of idea-generating content
Short selling – betting that a company’s share price will fall – doesn’t have the best reputation in some quarters. The research organisation Committee on Capital Markets Regulation said in a paper that this is “primarily due to general concerns that short selling is purely speculative and potentially destabilising for markets”. It added that “short sellers are often scapegoats in a market down cycle”. Some of this was apparent in the meme stock GameStop (US:GME) episode, when Reddit forums lit up in anger at fat cat managers and retail investors pumped up the share price to inflict huge losses on hedge funds.
But analysing short selling data (see our latest report in the link below) is a great way for investors to gain insights into market trends and the mood of the major players among asset managers and hedge funds. This process can inform investment decision-making, although it should never be the only consideration. It’s an excellent ideas-generator.