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Strategies & Market Trends : Shorting stocks: The root thread

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To: Q. who wrote (33)2/8/2004 11:50:34 AM
From: tyc:>   of 41
 
I am not familiar with shorting. However, my understanding of modern portfolio theory is that a portfolio should include a wide diversity of stocks preferably with negative correlation. I am wondering whether "shorts" might not therefore be desirable as a permanent feature of any portfolio, enhancing negative correlation. As all stocks have volatility, one need not even feel negative about the stocks one shorts, for we are told that "stock picking" rarely works.

Isn't it rather strange that I (and people generally) make selections only from the long side, and then worry about a market decline ?
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