This is the second post that I have recently written that is all about shorting opportunities. I am sorry if this will make many retailer investors feel that I am always on the opposite side of many stocks being discussed here. But I always feel when the market is in a down turn then I want to investigate new ways on how I can profit from this.

It is now turn of the energy stocks. As many people know I work in the Offshore Oil and Gas Industry and in offshore wind farms. With nearly 18 years experience I have got to know many this industry very well including the economic side. But I have never wanted to discuss O&G/Energy stocks at all on public forums. I have always believed they are very high risk and in the long run only the very best investors actually profit from this sector over the long term, especially those who specialise in the small caps. I do understand the major oilers have been great for dividends in an income portfolio and should in the long run still be a serious part of that strategy.

But in the short term I have seen the human effects of the low oil price with mass unemployment and major capital projects being delayed or even cancelled. With OPEC almost ineffective now as a cartel to agree limits to the production limits and Iran immediately coming online and at political odds with Saudi I cannot see any recovery any time soon. If anything the industry is pretty bleak for the next few years until someone blinks.

So how as a private investor can I try and profit from the situation? Should I short Oil - Brent or look at some of the most vulnerable small caps oilers?

Well to me I wanted to find a way of taking advantage of shorting the falling market, but in some way my risk to such volatility may be reduced.

So I decided on using a 'Farmed StockRanks Strategy' once again. Many will know that I recently and successful did this with Shorting the Christmas Retailers

The StockRanks 'Farmed' Approach

Since shorting is in theory carrying a higher risk than going long, especially using leveraged products, I decided the best way is to look at the highest market caps in the sector.  Generally the highest market caps are more liquid, they have narrower spreads and require a smaller…

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