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Best Stocks to Sell Short (Part 1)

26 November 2007 - Features - Editor

The secretive world of private equity loves to sell stock short so much that no resources are spared to win blind eyes if not outright favors from political heavyweights! India has ambitions of its west coast metropolis emerging as the financial capital of the world, but such dreams are reality already when it comes to volatility in the local stock market!

We see this phenomenon in many other wannabe US satellites with lax governance: upheavals, contradictions, and illogical reversals are carefully orchestrated to win fabulous fortunes for the favored. Why are small and humble investors, denied the extravagance of short selling stocks? Self-seeking politicians and puffed-up regulators warn those at the margins of a stock exchange establishment to stay away from the high voltage of trading without committing big capital, but everyone can learn how to buy and sell stocks with just small margins of cash, at opportune moments.

There is no law which states that all short selling must be manipulative. Sound business management principles and domain expertise can combine to tell even a novice that a stock is over-heated, and that certain events will bring about its downfall, even if this move is transient. Cynics dismiss such stock investing as a form of gambling, but indeed there are methods to picking losers! The precise timings of dramatic discontinuities are nearly impossible to predict, so those who sell stocks short without being parts of charmed rings, must set target prices firmly in view, and resist temptations to delay opening their financial parachutes. Here are a few leads which investors can use to make stock picks for purchases on margins and for future deliveries.

Stories Cash Balances Tell about Stocks

Why would professional managers keep cash idle? It is not easy to ferret out all relevant information on this important parameter, because who knows what happens between auditing periods. Regulators are very sporting about not asking for disclosures of average cash balances, since this would strip many carefully vested facts naked! You can find out through an obliging flunkey at a bank, or by asking pointed questions during presentations by top executives and their aides. The news is never good if a corporation has abundant funds chasing just a few worthwhile investment projects, but it can be equally disturbing if a treasure chest is kept at the ready in order to provide for a take-over or an acquisition. The short-term business prospects after the trauma of an acquisition are generally negative. Insider trading is illegal, but some of the best short sales of stocks take place before an impending acquisition.

Inorganic growth, that can add to stock value from day one are rare. This is most possible when you buy out competition, but even anti-trust regulators with below-average competence will sabotage such deals early. Grandiose hints may be dropped liberally precisely because some inner circles are circling the short selling waters! This is why close observation of short-selling Gurus through pliant brokers can make you big bucks out of air! Massive chips on shoulders are other beacons of short-selling opportunities for stocks. Inheritors of estates built during the age of colonial fiefdom of the Orient, buy white Caucasian majority companies with a vengeance! Scions are more than willing to risk stock price for the revenge of lording over past masters! These kinds of ego trips are just right for short selling transactions.

Best Stocks to Sell Short (Part 2)

 


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