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Short selling in a bull market isn't always easy, but the right level of skepticism can pay off in these overly exuberant times.
The herd continues to push the major indexes to new highs – the Standard & Poor's 500 Index hit another record high last Thursday at 1,987.94, and the Dow Jones Industrial Average topped out at 17,138.20 two weeks ago.
"It's hard to fight this bull market," said Money Morning's Capital Wave Strategist Shah Gilani.
Gilani is editor of the Short-Side Fortunes investment service, which seeks to make money off companies on their downside. These markets may make short selling difficult, but a skeptic can make a killing with precision timing.
"It's not about being right so much as it is about timing," Gilani said. "If you've got the guts, the capital to continue to add to losing positions, you can make a fortune."
So far this year short sellers have made the right moves on these five stocks…
Short Selling Success Stories of the Last Month
On the month, there are several examples of the short sellers getting it right. Below are five of the most heavily shorted, lowest-performing stocks in the S&P 1500 in the last month, according to BeSpoke Investment Group LLC.
GT Advanced Technologies Inc. (Nasdaq: GTAT) has a current short float of 36.2% and shares have been down 24.8% this past month. This diversified technology company put itself on the map last October on announcements that GTAT was going to enter into a $578 million deal to supply Apple Inc. (Nasdaq: AAPL) with sapphire material. AAPL uses sapphire as a protective cover for the cameras inside their smartphones, but some speculation has abounded since the GTAT-AAPL deal that the next generation iPhone 6 will employ a virtually unbreakable sapphire screen.