European Hedge Fund Shorts Outperform Rising Stock Market

As European stocks have rocketed higher over the past four months an odd anomaly is occurring: key European short positions held by hedge funds are outperforming the longs.

2014 very different market environment for short sellers than 2013

After a “frustrating” 2013, when “bad stocks were lifted in a good market,” said Stanley Altshuller Co-Founder and Chief Research Officer at Novus, a research firm that monitors hedge fund short positions in Europe. The difference now is that “the market is behaving like a stock pickers market in contrast to 2013 which was a general melt-up. Now bad companies are under performing so managers are using...