Having been too wedded to dividend hunting and convinced I could outguess the shorters, I first missed and then arrogantly ignored the Value Trap warnings about Carillion, and got burned. I licked my wounds and I am now more strongly focused on the Stockopedia Ranks and have adjusted my portfolios to hold almost entirely winning styles with most of those classified as Super Stocks.
My concern now is that I see that the shorters are building positions in some of my shares classified as "winners", namely Barratt, Berkeley, Halfords, Persimmon and Plus500.
Halfords is a good example. It is still showing as a winner with excellent Quality and Value ranks but because it has tanked over some not really terrible news, the Momentum rank has been slashed and it has flipped from Super Stock to Contrarian. Looking at the trades, almost all of the sells are Automatics which suggests to me that the Momentum investors are heading for the door and perhaps this is a classic over reaction to the news. I read the Halfords report and couldn't see anything really bad. Yes profits were slightly down but credible actions is being taken and it is still a great cash machine servicing a good dividend and capex. As a result, debt is under control and gearing is low. While it isn't a High Flyer, this doesn't look to me like a company on the skids.
My problem is that 2.4% has been shorted over the past couple of days which leads me to believe that there may be something happening to Halfords which I have not recogised.
I rely heavily on the Stockopedia Stock Reports but it looks as though the shorters are using different data or analysis to evaluate these companies. So my question is, how do I find out if there really has been a change which has not yet been picked up by the Stockranks?
Any comments and ideas would be most welcome.
Ask the shorters how they got along with Ocado.
when you invest in a business, you don't invest because it has as good stockrank, but you invest in an actual business. I would encourage you to remember your investment is more than just a stock ticker.
If you like what you read in the annual report, you believe in management and you feel that the business is good value, invest in it. If you see a share have an increase in shorts, look at the news and question your original investment decision. If you still are comfortable, then don't do anything.
Constantly question your own decision, read both the bull and bear case, and don't put all your eggs in one basket. If you do that for every investment, learn from your wins and mistakes, then you'll do just fine.
Remember that your disagreement of how to value a business creates the market.
