Arthur Cutten

Stocks with the Largest Short Positions

The approach of buying stocks with the biggest short positions is interesting if you sweat the details of what makes them a buy when the professionals think they are a sell.

You will get a nice rally in them if the market rallies. This is an easy play in a bull market, and an early stage bear market.

However is the teeth of a secular bear, it looks like buying a home in the path of a tsunami.

C is too big to fail? Watch, and be amazed. They will be tossing the common shareholders overboard faster than you can say "Yikes!"

Bank and Broker Default Risk

The Fed's bailout of Bear Stearns favored the creditors but not the shareholders, a fact obviously and correctly reflected in this chart.