Don’t Short on Valuation Inordinate Issues with Short Positions

Shorting with Growing but Grossly Overvalued Companies

One challenge we’ve had in shorting is with growing but grossly overvalued companies, in which the market can delude itself for a long time. We gave up on our short of solar energy company First Solar [FSLR], for example, after analysts started doing things like setting a price target and then backing into the multiple at which they thought it should trade today.