Short Selling

We follow the same security selection and portfolio construction process as with our investment portfolio, except seek the opposite qualities in companies we would like to borrow and sell.

Security Selection

The Manager believes the best "shorting" opportunities are found in poorly managed companies with weak fundamentals that can be sold for more than they are worth.
 
When targeting companies to borrow and sell (short), we look for the following:

• A history of inferior returns

• Management with a poor track record

• Businesses that are highly competitive and struggling to grow

• Securities that are expensive on an a range of valuation measure

The security selection themes in identifying shorting opportunities are similar to those pursued in identifying investment ideas for the portfolio. The attributes, however, are exactly the opposite. We look to sell:

• Companies that are performing well above trend. They are more likely to be fully valued. 
• The most popular companies as the good news is more than likely already priced in. 
•  Industries that have benefited from speculative capital as they are more than likely overpriced. 
•  Companies that offer investors short term rewards at the expense of longer term value.