Short Selling: Lies, Damned Lies, And Statistics

The Financial Times and the New York Times (coincidentally?) featured two articles yesterday, where both writers lament over the apparent loneliness/dearth of short sellers:

• Shorters Needed by Dan McCrum (Financial Times)- “Dedicated short sellers are a rare breed which has become even rarer in the last five years.”
• The Loneliness of the Short-Seller by Alexandra Stevenson (New York Times) – “Now, six years into a bull market run, with stocks in the United States smashing one record after another, these naysayers have all but lost their voice.” The title of this piece sounds more like a ballad about unrequited love then about financial markets.

While the primary assertions found in both articles are largely true (both authors did a fine job, despite poor data) – yes, dedicated short sellers...