5/25/2011

Investors ignore risk.. They respond and overreact to Fear

I compiled a list of stocks showing the largest increase in shares shorted for the 3 month period ending 05/13/11 as a percentage of their float.


I will continue my focus on long investing in small and neglected stocks. But I wanted to try and develop additional material related to another ignored part of the market… investors responding and overreacting to fear for small company stocks.

Please let me know if slowly building this material related to ideas that could become severely injured by investors overacting and responding to fear is of no interest. Overvaluation created in small stocks by the public’s ignorance, ignoring risk and falling prey to the desire to make a quick buck with popular often discussed overvalued stocks can offer a potential hedge.

But just like in the Book Money Ball: The Art of Winning an Unfair Game it was the assembling of the team and how each player complemented or contributed to a winning team was analyzed. The A’s manager Billy Beane was forced to find players with attributes ignored or under priced by the baseball market and assembly a winning team at a fraction of the cost of other teams. So he built a team where individually the player was ugly, diseased and unloved but CHEAP and when consolidated the team succeeded.

So I hope you can help build a winning team of stocks with the right combination for your goals from the data I post. But if this data that will be further enhanced and looked into has no interest for you please let me know so I can focus 100% on long deep value investing. Thanks @ John@shadowstock.com

Please click to view a sample of the stocks with the largest increase in shares shorted for the 3 month period ending 05/13/11 as a percentage of their float.

I will print the data and list tomorrow: But these are some of the stocks with the largest 3 month increase in shorts to the number of shares in their float

please click for stock quotes