Due Diligence in Short Selling
“Although buying low and selling high usually works for long ideas, selling short based only on high valuation usually does not work as well. Investment theses for short ideas work well when a company faces clear issues with its business model, whereas high valuation only serves as icing on the cake.” — Amit Kumar
This week, our featured book is Short Selling: Finding Uncommon Short Ideas, by Amit Kumar. In today’s post, Kumar explains some basics of short selling, and examines the practice of selling short based only on high valuation.
Don’t forget to enter our book giveaway for a chance to win a free copy of Short Selling!