1. Short Selling
... Brokerage houses also tend to be more optimistic and thus providing potential for negative surprises with greater regularity than positive surprises. All this optimism creates more inefficiency in short-term stock prices and thus gives prices a positive bias. Short sale candidates fall under three categories: (1) Companies in which management lies to investors and obscures events that will affect earnings ... . (2) Companies that have tremendously inflated stock prices - prices that suggest a speculative bubble in company valuation. (3) Companies that will be affected in a significant way...
- Word Count: 1108
- Approx Pages: 4
- Grade Level: Undergraduate