It’s no secret that short sellers are vilified by longs. If shorts initiate a position, they could weaken the price action. If shorts go active, they could affect a stock’s fundamentals. In terms of sentiment, shorts could weaken a stock’s momentum just by talking. As bad as shorts are to longs, it sometimes makes sense to read their blogs. Here’s why:
Why Investors Should Read Short Selling Blogs
Getting both sides of the story
Investing successfully often depends on getting both sides of the story. Reading up on short blogs and knowing both sides can better inform long investors and help them position size better according to volatility. Position sizing correctly according to one’s risk tolerance and a stock’s potential volatility can make a big difference in terms of an investor’s returns when all is said and done.
Investors can learn more about investing for free
While they aren’t always right, many short sellers know a thing or two about the market. In bull markets, short selling is very difficult because stocks don’t necessarily trade based on their fundamentals all the time. It can be a long and difficult journey. As it relates to the pros that have done it successfully for many years, learning and reading their blogs can give the regular investor valuable insight and free education (even if the short sellers aren’t necessarily right all the time).
Shorts can sometimes create trading opportunities
Short selling can sometimes cause good stocks that don’t deserve to drop to decline in price. During those times, there could be opportunities to buy and profit. When shorts cover to take profits on certain stocks, there can also be temporary buying opportunities that allow momentum investors to make money. In terms of the specific trading opportunities, I will go over some scenarios more in depth in another article.
Short Selling Blogs
In terms of the must-read short selling blogs, there are a few with Citron Research, Muddy Waters Research, topping the list. There are also some blogs written by various Seeking Alpha or Value Investors Club authors that are worthy of your time. Short sellers don’t know everything and aren’t right all the time, but they do know some things and their writings can be educational and informative.
Disclosure: no positions