Bruce Greenwald on Shorting
I’m having trouble finding time to write longer articles so I’m thinking of doing more frequent bite-sized bloggings. Even if I had all the time in world, sometimes I just have something twitter-sized to share that’s not worth a whole article.
Today’s snippet is a link to an interview by John Authers with the legendary value investor and professor Bruce Greenwald. They cover a bunch of items but a point is made in the beginning about a shorting that never even crossed my mind.
If someone asks you about the risks associated with shorting, you’ll probably respond with the standard answer about unlimited downside potential and/or the swimming against the stream aspect of markets tending to go up in the long term.
But Greenwald also makes the point that the more a short position moves against you, the larger the part of your portfolio it becomes. In hindsight that’s an obvious attribute of “unlimited downside potential”, but I never quite connected the dots.
I’d love to attend his 2-day course but the $5200 price tag is more than most spend on the entire tuition for the CFA program.
Looks like a copy of his book