Shorting Strategy
Previously, I had shunned shorting for obvious reasons: poor return on time, market goes up over time, and negative return asymmetry. I am also young and have no need to “preserve” income by taking less beta risk. However, despite the above being true, I think shorting enhances an investor’s ability to diligence long investments and is a good intellectual exercise.
In order to learn to short, I researched top short managers such as Muddy Waters, Citron, and others. The main insights I came up with include certain overlapping commonalities in the companies they