1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Barel Karsan
Barel Karsan
Articles 

Book Review: Short Stories

October 29, 2013

Artham Capital founder Amit Kumar has written a book called Short Stories, which covers the important basics of short selling. I'm not a short seller, nor do I envision myself becoming one anytime soon, but I read it anyway. I often find myself on the other side of a bunch of short sellers; knowing how they think and what their limitations are can be useful.

The first thing to realize is that while short selling is pretty much the opposite of going long from a mechanical point of view, the short seller's mindset cannot be simply the opposite of that of a buyer. This is because there are a number of key differences between going short and going long that force the short seller to alter his approach. Some of these differences include interest payments (because shorts have to borrow shares from those who own them), timing (the lender can call these shares back), and the return profile (a stock can rise infinitely, vs a long, whose maximum loss is what he paid for a stock).

Kumar discusses these and other factors and how they influence what constitutes a good short candidate. Demonstrative case studies can be found throughout the book, helping illustrate why certain heavy shorts ended up going right for short sellers, and why others went wrong. Some of the insights offered are similar to those provided in only the most sophisticated investing blogs and stock investing forums.

I found the book helpful, particularly the case studies, to better understand what a short seller needs to have happen in order to be right. Enjoy!

About the author:

Barel Karsan
Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

Rating: 3.0/5 (2 votes)

Comments

Please leave your comment:


More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.

Performances of the stocks mentioned by Barel Karsan


User Generated Screeners


DANGORDONEPS GROWTH 5-29-17
DANGORDONEPS GROWTH 5-28-17
Jefulford2 P/Es under 10
HOLKLSUMini Group Low Shiller P/E
doonich5% within 52wk
JefulfordNegative EV
JefulfordP/graham <0.5
JefulfordP/TB <1
JefulfordP/TB <0.7
JefulfordNCAV <1
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK