Shorting a stock is considered one of the sexiest and most complex moves on the Street.#-ad_banner-# Investors are dazzled by stories of hedge fund titans such as David Einhorn and John Paulson raking in billions, going against the grain and taking aim at companies they believe are overvalued or headed for a nose dive. But in spite of the psychological attraction of being a contrarian and bucking the masses, even the smartest… Read More
Shorting a stock is considered one of the sexiest and most complex moves on the Street.#-ad_banner-# Investors are dazzled by stories of hedge fund titans such as David Einhorn and John Paulson raking in billions, going against the grain and taking aim at companies they believe are overvalued or headed for a nose dive. But in spite of the psychological attraction of being a contrarian and bucking the masses, even the smartest money on the Street struggles with short investments. Take Herbalife (NYSE: HLF) for example. Short interest in the stock exploded higher from 20 million shares in mid-December to an eye-popping 37 million shares in the last week of 2012. This came after it was revealed that a number of billion-dollar hedge funds, led by Bill Ackman, had initiated a massive short position in the multi-level marketing company. As you can see in the chart below, the surge in short interest coincided with the… Read More