Tech Stocks Sell Off, but Future Looks Brighter - Barron's

The financial media love when big-time professional investors, such as Bill Ackman or David Einhorn, say they have shorted a stock, because it means there could be open warfare between the investors and the companies. Shorting, or short-selling, is when an investor borrows shares and immediately sells them, hoping he or she can scoop them up later at a lower price, return them to the lender and pocket the difference.

When you buy shares of company, you obviously hope they will rise in the short term or over a long period or maybe that they will just provide dividend income.

That can happen, for example, if a company goes bankrupt. KaloBios short sellers facing squeeze as CEO Shkreli says will no longer lend stock. But he received little sympathy from other investors, as you can read on his GoFundMe page. This is one way for individual investors to short stocks of companies that Lamensdorf and co-manager John Del Vecchio think are headed lower, based on analyses of their financial reports.

George Schultze, founder and CIO of Schultze Asset Management in Purchase, N. When a major investor places a short, it can be helpful to other investors.

For example, Citron Research published a report on Oct. Philidor, in turn, said on Nov. Another well-known short is Whitney Tilson of Tilson Funds, who has issued a seemingly endless stream of comments on Lumber Liquidators Holdings Inc.

A bold short is the one placed on Apple Inc. When a well-known investor announces a short position, it does not mean you should necessarily follow suit.

The professional short investor also may have access to technical and financial analysis that you do not. If a known money manager is short a stock you are interested in, or holding, at least do additional research on your own. Meanwhile, unless you are a professional money manager who has built up sufficient expertise through years of study to play the game, stick with long positions for your investments. Philip van Doorn covers various investment and industry topics.

He has previously worked as a senior analyst at TheStreet. He also has experience in community banking and as a credit analyst at the Federal Home Loan Bank of New York. By using this site you agree to the Terms of Service , Privacy Policy , and Cookie Policy. Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information.

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