Kevin Stecyk

Acquisition Of CDW Highlights Challenges Of Shorting On Valuation Alone

<i>The concept "Don't short without a catalyst" is repeated so commonly that it is a cliche.</i>

True enough, it is a common refrain. But at least with a catalyst, either you're right and you win. Or you're wrong and you cover. There is a decisive moment when you know where you stand. Shorting on valuation, you <i>hope</i>... the market comes to its senses and sees things as you do. While the phase, <i>Don't short without a catalyst</i> is cliché, at least there is some value to it.

There are many seemingly overvalued stocks. Those of us that engage in shorting pick stocks that we feel we have a reasonable shot at being correct. The short community as a whole is having a difficult time. As you point out, you have a favorite short that continues to defy gravity and logic. One thing for sure, though, shorting is both challenging and dangerous.

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