Quote from makloda:
Ok and who in the world was able to accomplish the neat little trick you outlined above on
a) a constant Net short basis
b) over a complete market cycle
My point is and was that the "smart money" being net short right now is not necessarily being very smart based on historical evidence. Your constant mention of how you shorted a couple of individual stocks that ended up in the green doesn't help the argument at all. The point is that 99% of professional dedicated short sellers fail to make money in the long run - and I outlined the reasons why I believe that is the case. They are merely used by FoF's as a means to even out volatility. Period.
You only use historical "evidence" that supports the long side. Anyone short the HB's and Lenders since last year's run did VERY WELL...does your theory show that? No, not at all. You're making your case with something that only works in the way you want it to work...I'm totally willing to agree that your statistics make sense, if you look at indices....so what? If you do something other than that, like look at industries that are going to/are already doing badly and were/are short them, you can make great gains. That doesn't fit into your theory but is a great way to invest...stocks tend to fall faster than they rise.
