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No. of Recommendations: 2
Glad to see some activity here. An occasional short is my bad behavior, my guilty pleasure. This investor's "eat what you want on Sundays" diet. Some people's monthly cigarette.

I rationalize it thus:
- I use it sparingly
- short positions actually help me manage my emotions through market volatility. Even their very small allocation relative to the rest of my portfolio has disproportionate stabilizing effects - something to the effect of "whoa, market is down 350 points today (as it is)...but it's ok because my X, Y, Z short positions are up". This works, in part, because I view those positions as short-term gambles and I can focus on them instead of my portfolio balance in that moment.
- I have noticed it's a different, useful discipline to evaluate something as a potential short and has definitely helped me apply a similar discipline to evaluating my long positions: "how could this go really badly?"

I have had some successes (pocket-sized fuel cells, Lumber Liquidators when the first news of their sourcing scandal dribbled out, SeaWorld when I saw previews for "Blackfish") and some losses (Chipotle had many more good days ahead of it than I thought, Caterpillar and Deere were at a different point in their business cycle than I estimated). Presently, I'm short Proto Labs on valuation at $111/share (having benefited from a great long pick through $110/share), Bed Bath and Beyond, and a basket of Big Oil. On a day when my long positions (again, representing 95+% of my portfolio) are absolutely bleeding out, seeing Big Oil down 3-5% helps settle me.

The best version of shorting is finding companies that I think might actually be frauds - way more interesting to me than shorting on valuation or events, but definitely harder to find. The best was a company that claimed to have a pocket-sized and re-fillable liquid fuel cell battery. They went from $30/share to about $0.10 when my shares were called. Very satisfying and profitable experience!
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