A key takeaway for me from the book Dead Companies Walking that I reviewed last month was hedge fund manager Scott Fearon’s approach to short selling. I wrote about it in my review as follows,
The part of the book I found really fascinating was how he approaches short selling. He prefers to short stocks after they have already declined 50% from their highs. This approach helped him avoid shorting stocks during the height of the dot com bubble. I guess he really paid heed to the saying, “the market can remain irrational longer than you can stay solvent”.