lance_f

CACC: Recent Events Add to the Short Thesis

I agree that short selling can serve as the voice of reason and that even individuals with greater experience will exhibit "variability" in their "conviction", as measured by the size of the position they take relative to the value of the portfolios they manage. The problem with the existing system is that it does not differentiate between an individual hyping a position for a friend who stands to benefit and a genuine academic evaluation of an existing company's situation. Presently, an individual may write an article, buy or sell short a single share of stock, and then provide the existing disclosure. I believe that the fractional portfolio disclosure would help readers distinguish, but as you have noted there are many strategies and it would remain easy for an individual managing multiple types of funds to continue to distort such an extension to the disclosure policy. I would be impressed if such a system could be put in place with rapidity and precision. I also understand it could put the more honest authors at a disadvantage to some of their more seasoned and less ethical peers who would not want to be held to such standards.

CACC: Recent Events Add to the Short Thesis

I know the authors of these articles read the comments that get posted. I would like to offer a suggestion not only to Jackson but all authors who provide disclosures along with their analysis. It would be very beneficial if the author would also specify the fraction of their porfolio for which the position is held or a range. Thus, one could specify 5.6% or between 7.5-10.0%. This would avoid the author from having to disclose the worth of their portfolio, but also give the reader some guidance regarding their degree of conviction. Without this additional bit of insight, many readers could commit an excessive proportion of their funds to a position. Clearly, this could assist both well intentioned authors and their readership.