Short Selling: Finding Uncommon Short Ideas (Columbia Business School Publishing)

Lots of positives in this book on short selling. Cisco case is a good summary that all b-school professors touch upon. There was a typo (profit to sales, as opposed to price to sales in the beginning of the book itself, but not a big deal). I have been burned by shorting hot stocks just to see it go up for ever. But I always have a call to protect myself. This book does not give you details of various methods of valuation (in depth analysis), or methods to identify accounting issues, or rigorous details on financial statement analysis etc. But it has lots of stories, case studies and interviews. Excellent reviews, checklists are a positive. Interview with Off Wall Street founder is great. I remember the irrational exuberance on LQDT and the hype that a business daily (newspaper) created back in 2012. Valuation showed a growth of 20% priced in at $62 assuming no slowdown for ever. Of course within 2 years the stock came back to low 20s. The lesson that Mr. Amit Kumar stresses is that valuation alone is not a reason to short-sell a stock. There has to be a catalyst or change in investor sentiment. In October 2019, I am Short on RNG, COUP and TTD. We'll see how it goes. I have calls for protection.

The author did a solid job of sharing not only a reusable approach to finding short ideas but also included a helpful way to avoid shorts that look otherwise tempting. Numerous case studies are included for reference which illustrate the salient points he's trying to make. Both experienced and new investors will benefit from the author sharing his years of experience on finding short ideas, and will be a helpful resource for anyone attempting to develop a unique approach. I found the writing style clear and straightforward, and the concepts presented with an appropriate level of detail.To be clear, this isn't a book on valuation, but instead a guide to think about 'what' is in the valuation, and when that can produce a short idea worth further consideration.

I disagree with the negative reviews here. As a professional investor who focuses on short selling, I found this book clear, interesting, and helpful. Clearly, there is more to short selling than reading one book, but the information in this volume is helpful for beginning or experienced investors. Highly recommended

Amit did a great job of concisely synthesizing potential short selling ideas that can be easily understood by neophytes such as myself. Through the use of real world examples, not only does he cover the indefatigable probing that must be conducted in order to cultivate the courage to short a company but he forewarns readers of the perils that can occur by doing so.

Columbia Business School is the academic home of value investing so it’s only fitting that it is their publishing company that provides Amit Kumar’s expose of short selling. Fundamental shorting of stocks is a discipline related to value investing since it is based on detecting a discrepancy between price and value through research of business fundamentals. But where value investing focuses on the situations where the value is deemed to be higher than the price, short selling zooms in on the opposite situations.The author Amit Kumar who is a portfolio manager at Columbia Threadneedle Investments and a business professor at Rutgers Business School, has also written a book that is clearly influenced by the value investing discipline. The text has three sections. In the first Kumar lays out a framework to identify short selling opportunities, then he presents a number of interviews with investors and in the finishing third section he covers the risks and mechanics of shorting.In short the presented categories of structural short opportunities are in companies 1) with business model issues, 2) that are unsustainably leveraged, 3) in structural decline making them value traps, 4) that are broken growth stories and 5) with accounting issues. The chapters in part 1 loosely follow this setup and the author develops his thoughts, provides some detail and present a large number of case studies – all more or less successful for the short seller.If there is an overriding theme to the author’s short cases I would say that the core of a case is centered on businesses model problems. High leverage, high valuations, accounting warning flags etc. are secondary factors. There has to be a fundamental shift to the worse in business fortunes acting as a catalyst. And it is definitely a no-no to short open-ended growth stocks on the fact alone that they are overvalued.The interview section is clearly interesting but considering the theme of the book, not very well aligned. First there is a section on the value investor icons Ben Graham, Warren Buffett and Charlie Munger and although Graham at least did some shorting (is there something he didn’t do?) this is hardly where his legacy lies. Then follows an interview with famed value investor Jean-Marie Eveillard who doesn’t short stocks at all and the activist investor Bill Ackman that only occasionally (but very publicly) take short positions. Finally, in the last interview with Mark Roberts, analyst at Off Wall Street, there is a contribution from a dedicated short seller. Names like Ackman and Eveillard clearly sell books but it really would have been more appropriate to seek other interviewees.The finishing section with one chapter on when to cover short positions and one on the mechanics of short selling would probably fit equally well as a part of the first section. At least the basic knowledge of how to actually short a stock should have been presented in the very beginning, for the benefit of those less familiar with the process.Most investment books explore the angle of finding winning (long-only) stocks as the road to success, but a portfolio that avoids losers will almost certainly also outperform. Short Selling will as such not only instruct those who are interested in short positions, but also help long-only investors avoid disaster positions. Success is often about sidestepping the stupid actions. However, although perfectly fine, in my opinion this is not the definite primer on short selling.All investors benefit from learning about stocks that risk failure. This book provides some clues.This is a review by investingbythebooks.com

As a Certified Fraud Examiner, professionally traded by retired FBI agents, I can see that Mr. Kumar highlights many of the same techniques that professionals in the field of fraud detection utilize to "red flag" questionable companies. This book is quite rational and informative, without the silly and unethical promises of riches that you see in many of today's investment books (aka anything Cramer writes).One technique not mentioned in this book that I love to use, is a test of random digits. Cooked books can be flagged by testing if financial reports do not have a set of truly random digits. For example, in a set of 10,000 random digits (typical financial statement), there should be a range of the number "7", between 700 and 1,200. For some reason, accounts that like to cook the books, avoid use "0"'s.Oh, and in regards to the Herbalife (HLF) section, in my professional option, it is clearly a pyramid scheme that will eventually fail, it is a when not if question. I love that the founder and his mother died by overdosing on.... pills, not a product I would want to buy. I am amazed the Chinese don't shut it down, just to stick the U.S.

The book provide some past analysis of the author but failed to provide "how to " in those respect. I agree with the other review about the book is not well organised and difficult read. May be it is readable for a professional standard reader..

Valuable to understand how difficult is shorting stocks, it gives some good ideas if someone really wants to implement a short strategy.