short sellers needed to fight overpriced assets

This Harvard Study is right. Overpriced companies try to keep their shares overpriced by fighting short sellers. Fortunately, as the study finds, they are usually not successful. Prices deflate 2% per month, on average.

Short sellers help bring down the prices of overpriced assets. Bubbles should be burst. Asset prices should reflect economic fundamentals. Overpriced assets should deflate.

Investors can make money from this result. Sell short if there is a lot of short selling. Sell short even more if owners / managers are fighting the short selling.

Smart money goes to derivatives first, whether long or short, rather than the spot markets. Better leverage and lower transaction costs. Especially options. Pre-pay your gamble. Easy accounting for dealing with the IRS. Never have to deal with physical storage, margin calls, broker fees on individual stocks. Just buy put options on assets that will deflate in price.

Many assets are overpriced. Deflation is coming. Time to get rich by short selling.

lamont_go_down_fighting short sellers.pdf


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