Quick checklist from the book ‘The Art of Short Selling’ written by Kathryn F.Staley. One of the masterpieces on the art of short selling.
A checklist for shorting stocks:
- Analyse the financial statements
- Fuzzy assets, inventories, receivables
- Proxy statements
- Cash flow is the King!
- Greed and Sleaze
- Management pay scheme
- Proxy statements
- Options awarded to management
- The big puzzle
- Store checks
- “Grass-root research”
- Non-Sell-Side research
- What do competitors say about the company?
- Who owns the stock?
- High institutional ownership is great for a fast collapse
- Management ownership level
- Wall Street reports:
- See what the bulls are saying
- Taking the temperature – are they “defending”?
- Pay attention!
- Listen to the earnings call
- Every short is different and no two follow exactly the same pattern
- Watch timing-stalk the company before shorting
If you are interested to learn more about Short selling, then I would highly recommend the book “The Art of Short Selling”. You can buy the book from here
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