With hedge funds the most aggregate short since the peaks in 2007/8 [2] and any long/short fund struggling to eke out anything but losses [3], this week's epic surge in the prices of the "most shorted" stocks confirms once again that the "dash for trash" is alive and well. Buying the "most shorted" stocks has been a massively outperforming strategy for well over a year [4], and as we noted here, the trend of major outperformance of 'weak balance sheet' firms over 'strong balance sheet' firms continues [5]. The results... "most shorted" stocks +5.1% from last week's lows - more than doubling the S&P's 2% gains...
Weak balance sheets "winning" over strong balance sheets...
[6]
As shorts pile up to record highs...
[7]
Which results in this...
[8]
So we are back to BTFD, and make sure when you BTFD you BTFWSOT (worst shit out there)