Very interesting take on 'stale shorts' on smh:I think this...

Very interesting take on 'stale shorts' on smh:

I think this really applies to FMG since many have called it 'the best short on the ASX' blah blah.

Read more: http://www.smh.com.au/business/markets-live/markets-live-asx-treads-water-20130813-2rt29.html#ixzz2boTOhBEQ


10:43am: Game over for shorts, Bell Potter’s Charlie Aitken proclaims in reaction to yesterday’s strong JB Hi-Fi results:

•One thing that is becoming more and more obvious is that shorters don’t get everything right. In fact, like all of us, they get some things spectacularly wrong. Of the 3 large cap results yesterday, the best one came from the stock with the biggest open short position, JBH.

•There are occasions when you are reading a results presentation and you simply can’t compute why the given company has a massive open short position. Yesterday was one of those occasions for me when reading the JB Hi-Fi FY13 results and FY14 outlook comments.

•The only conclusion I can come to is the short position is a stale one based on a previous global and local view of electronics segment price deflation. JBH’s numbers and growth outlook confirm that is a stale view and the conditions are clearly in place for the JBH shorts to be squeezed even harder.

•Shorters do have the “Keyser Soze effect”. Their mere presence makes rational investors and usually rational analysts question whether the shorters have information they don’t.

•However, as time goes on and the stock in question keeps rising on fundamentals, more investors analysts come to the view “the shorts know nothing” and it becomes like and episode of “the Empire strikes back” as the world squeezes the shorts.