I really wouldn't worry too much about the shorts if one...

I really wouldn't worry too much about the shorts if one believes in the fundamental value of the company and that its equity is trading below intrinsic value. Just because a crowd has taken the opposite side of the trade doesn't mean they are onto something. Just take the two most shorted ASX stocks in PLS and SYR as examples. They have rallied around 35% and 60% over the past 6 weeks. While there has been some short covering in those stocks, there is still a large open short position in both those companies. If lithium and natural graphite futures continue to improve and there is a rush for the exit creating a short squeeze, it could be a very painful experience for the shorts.

It's no secret that I consider very highly of Bill Ackman as an investor. Here is a good interview where he explained how he blew 1bn on his Herbalife short position -
PS. He stopped stock shorting after that. He only purchases CDS as insurance hedges if and when he sees the need.

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