Preparing for the Worst by Hedging Managing a Portfolio by Shorting

Does Shorting Make a Person a Good Analyst?

We think shorting makes us better analysts. Charlie Munger says you really understand a company when you can articulate the negative scenario better than the person on the other side of the trade. We also think that from a business standpoint, if you’ve done all the work and conclude the negative scenario is most likely to play out, it makes a lot of sense to be able to short.